News & Articles

CAT Financial Products and CAT Growth Launch Issuance Platform for SME Corporate Loans

Zurich, 11.12.2018: CAT Financial Products and CAT Growth are launching a platform that enables institutional investors access to securitized corporate loans from selected SMEs. While CAT Growth identifies and manages potential companies and enables direct investments with a focus on growth financing and succession planning, CAT Financial Products is responsible for the securitization of the corporate loans. An audit firm provides the valuation and an independent rating agency issues the ratings. The first project has a volume of up to CHF 30 million and will be completed in December 2018.

«Our platform gives institutional investors direct access to corporate loans, an asset class that is suitable for adding to the bond allocation and which is characterised by its low correlation to traditional markets," Giuliano Glocker, CEO of CAT Financial Products reports. CAT Growth mainly identifies companies in the DACH region (Germany, Austria and Switzerland) seeking growth capital. Martin Ziehbrunner, CEO CAT Growth: "The focus is on established and profitable companies from different industries, which are well positioned in the market and have innovative products and clear USPs". In addition, certain bonds are secured by real estate, blocks of shares in third-party companies or other assets. Alongside the unique setup, the strict criteria and the active management are intended to achieve added value for investors.
The Advisory Board of CAT Growth consists of experienced entrepreneurs from the industry, who have an international track record in a wide variety of medium-sized and large companies. This expertise will be incorporated into the selection, due diligence and accompanying processes, to ensure an optimal selection of high quality corporate loans. In addition, each company and the corresponding collateral are evaluated by an auditor and it is possible to have a rating from an independent and FINMA-approved rating company.

Securitization with Swiss ISIN and a digital marketplace provide liquidity
The loans are securitized via the issuing platform of CAT Financial Products. The investment products are categorized as structured products with reference entities in the form of private placements with a Swiss ISIN and a swiss paying agent. The transparent setup at low costs and the flexible structuring options enable an efficient securitization of corporate loans. The products are monitored and analysed via the online platform of CAT Financial Products'. An access for institutional investors is intended to provide a digital marketplace and thus liquidity in the daily secondary market. For a volume starting at one million Swiss Francs, corporate loans are launched via the platform. A special AMC (Actively Managed Certificate) will be launched for smaller transactions. This AMC invests directly in smaller loans and thus offers access to a diversified portfolio. It will be issued in CHF and is suitable for qualified investors. A special feature of the AMC is the possibility of coupon payments, financed by redemptions or coupons in the underlyings loans.

First project this year: 3-year maturity with 3% p.a. in CHF, secured by Swiss property
Giuliano Glocker: „After a year of development, we are looking forward to the launch of the new platform for corporate loans; the first project will be issued before Christmas. It is a 3-year credit linked note with a coupon of 3.00% per annum. The capital of up to CHF 30 million will be backed by a first-class Swiss property and the note can be repaid early; partial repayments are also possible. Further exciting projects will follow in January 2019, for example a succession solution for an IT SME will be financed by a company loan." Martin Ziehbrunner: „The cooperation of CAT Growth specialists in the field of entrepreneurship and the CAT Financial Products platform enables exciting investments in a niche area, where we see huge demand from institutional investors. We see the key to success in the selection of companies as well as in the risk management in close collaboration with external partners who evaluate and advise the companies. In addition, it is important to accompany the projects and companies during the term of the loans and to monitor their development". The platform is initially accessible for clients of CAT Financial Products and CAT Growth and will be rolled out nationally to qualified investors in 2019.

Complete integration of the processes without issuer risk of a bank The securitization and issuance platform is based on off-balance-sheet Special Purpose Vehicles (SPVs) and covers the entire process chain from consulting, structuring, securitization and daily valuation up to the booking into the customer's custody account. The transparent setup, the maximum security as well as the possibility to freely determine all involved parties offer the highest flexibility and cost-efficiency.

About CAT Financial Products AG
Since 2008, CATFP, based in Zurich and Bern with around 20 specialists, has become one of the most successful Swiss structured products broker - not at least thanks to constant investments in innovative technologies. The main areas are the certified best execution, fully automated life-cyclemanagement and investment solutions. As a result CATFP gives its customers access to more than 30 issuers and finds the right product at the best price out of thousands products. The excellent IT software is constantly being developed, available in white-label format and already in use at several Swiss private and cantonal banks as well as foreign institutions. In 2018, CATFP's offering was expanded to include its own issuing platform.

About CAT Growth AG
CAT Growth AG enables and manages direct investments in SME companies that are in succession planning or seeking growth financing. The team of experts focuses on private equity and private debt transactions in the area of established and successful SMEs in the DACH region. The companies are each managed by specialized investment teams consisting of proven experts and experienced entrepreneurs with many years of experience.