Company achieves new milestone with AAA-rated issuance and record execution

Tricolor, an AI-powered CDFI providing high quality, affordable used vehicles and financing to underserved Hispanics, today announced its seventh securitization, an issuance of $234 million of asset-backed bonds secured by a pool of its installment loans. JPMorgan Securities LLC acted as the sole lead book-running manager and Barclays acted as co-manager.

The Class A, Class B, Class C, Class D, Class E, and Class F bonds that were issued received ratings of AAA, AA-, A, BBB, BB, B, respectively, from Kroll Bond Rating Agency. The Class A, Class B, Class C, Class D, Class E, and Class F were placed with a diversified mix of twenty institutional investors in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended.

“We are extremely excited to have attracted an expanded set of institutional investors to support our growth having been oversubscribed by more than three times,” said Daniel Chu, founder and CEO of Tricolor Holdings. “Achieving a AAA rating is an important milestone for our company and a strong validation of our technology’s unique ability to provide access to affordable and responsible lending for a historically underserved community.”

“Socially responsible offerings are a key focus amongst capital markets investors. Tricolor’s proven ability as a successful lender to an underserved population is a key differentiator in the ABS market,” said George Wilkins, Managing Director, J.P. Morgan.

According to the FDIC National Survey of Unbanked and Underbanked Households, 31% of the US Hispanic population have no or limited access to mainstream credit, which can translate into scarce options in terms of accessing financing for a major purchase such as a motor vehicle.

Since its founding in 2007, Tricolor empowers its customers by providing access to affordable financing on high quality, certified vehicles in order to enhance the quality of their lives and ultimately help them to build a better future. Leveraging advanced AI technology, nearly fourteen years of proprietary customer insights, and over 22 million unique, non-traditional attributes, Tricolor has served over 85,000 customers and disbursed over $1.5 billion in affordable auto loans.

Tricolor issued its first securitization in July 2013.

This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

For more information about Tricolor and Ganas, please visit tricolorholdings.com, tricolor.com, and https://www.ganas.com/.

Dutch FinTech Facevalue introduces a unique accounts receivable finance solution for European SMEs that challenges traditional factoring. Facevalue offers complete flexibility to its clients to determine which receivables they want to sell and charge no fixed fees.  Most factoring solutions to SMEs require that the business sell all their outstanding accounts receivables to the Financier for a fixed period, usually two years that includes high fixed costs.

“The banking landscape has changed so much over the past decade that it has become a real challenge for most businesses to present their business case to lenders. There is often no one to receive their application, let alone understand the dynamics in their business and by the time the application is assessed, it is already dated. Facevalue has built a secure online platform that extracts invoice data, handle the mapping and conversion of data formats and lists all our clients’ outstanding accounts receivables in a ledger from where they can configure rules, or choose manually which receivables they would like to sell immediately and without recourse.” - Neels Bornman, Chief Executive of Facevalue.

Facevalue performs a pivotal role as a trusted market platform between businesses and investors. The company has developed the capability required to scale using advanced technology to address what is one of the biggest business finance opportunities in the world today. Accounts receivable finance is a vital tool for markets to recover. It is expected that the global transaction value will eclipse pre-pandemic levels and continue its meteoric rise and still it only accounts for an approximate 10% adoption.

Bornman: “The stop-start economic recovery as markets open and governments try and manage the impact of further Covid-19 infections makes it incredibly hard for businesses to predict inventory and liquidity. We believe that businesses’ top priority will remain the protection of their available liquid resources. Adopting a flexible finance solution as part of a recovery and growth plan should be part of every business’ strategy during these uncertain times.”

According to the industry body FCI, accounts receivable finance has grown at an annual compounded growth rate of 7% over the last twenty years from €600 billion at the turn of the millennium to €2.7 trillion today. The market declined 7% worldwide during the pandemic, but the Netherlands still managed to grow by 1.4%. Europe accounts for 68% of worldwide accounts receivable finance dominated by France, Germany, UK, Italy and Spain that account for 70% of the European market.
(Source: FCI Annual review 2021)

According to PWC’s recent working capital reports, there is more than €1.2 trillion excess working capital tied up in global balance sheets, which if addressed would lift overall return on invested capital to 8.8%. 14 out of 17 industry sectors analysed deteriorated in net working capital days over the last year. Industries that would benefit most from release of cash from revenue are Retail, Engineering & Construction, Healthcare, Technology and Automotive.
(Source: PWC Working Capital report 2021)

Europe is also one of the hardest hit regions by the pandemic where revenue declined by 23%, inventory days increased by 15% and working capital performance deteriorated by 8 days. While companies improved their ability to generate cash from operations, profit margins are at a four-year low and debt rose considerably as companies hoarded cash to weather the storm.

(Source: PWC Restructuring and Recovery report 2020)

“Our research of European cross-sector mid-market corporates show that even before the pandemic, revenue was up year on year but even then, companies struggled to convert revenue to cash. In addition, capital expenditure as a percentage of revenue has continued to decline, which implies that companies are managing cash by not making capital investments. During the pandemic, revenue declined and is now only starting to recover. We predict that capital expense will remain a low priority while cash flow management becomes the number one priority”, commented Neels Bornman.

Many businesses are reluctant to utilise receivable finance solutions as part of their financial planning due to the comparatively high fixed costs it attracts. By removing the rigid nature and fixed costs, Facevalue delivers a solution that should form part of every business’ strategic planning regardless of its size. There is a direct correlation with the increase of an enterprise’s value and the effective management of its working capital.

Selling a receivable to Facevalue is as easy as emailing the invoice straight from an accounting system to a dedicated email address we create for each client. The platform uses a combination of optical character recognition (OCR) and artificial intelligence (AI) to convert a PDF invoice to a Peppol compliant structured electronic invoice. New clients can immediately sell their top priority receivables while Facevalue perform a detailed credit assessment whereafter a facility of up to €5 million can be approved for SMEs across the European Economic Area and the United Kingdom.

• McGuire brings more than 30 years of international industry and government experience
• Previously served as Group Chief Information Security Officer (CISO) at Standard Chartered

SWIFT today announced the appointment of Cheri F. McGuire as Chief Technology Officer (CTO). McGuire, previously Group Chief Information Security Officer (CISO) at Standard Chartered PLC, has extensive technology and banking industry experience and will oversee the co-operative’s core infrastructure to ensure it remains strong, resilient and secure.

McGuire is an established thought leader and industry advisor on cyber risk management and resilience. During her time as CISO at Standard Chartered from 2016-2019 McGuire established a new global cyber risk management function across 60 countries and 85,000 employees. Before that she led cybersecurity policy and programmes at Microsoft and security vendor Symantec and was director of the National Cybersecurity Division and U.S. Computer Emergency Readiness Team (US-CERT) within the U.S. Department of Homeland Security.

McGuire begins in post today and will serve on SWIFT’s Executive Committee, reporting directly to CEO Javier Pérez-Tasso. She joins as SWIFT undertakes an ambitious transformation as part of its strategy to enable instant and frictionless transactions across its global network of more than 11,000 institutions and 4 billion accounts in 200 countries.

SWIFT CEO, Javier Pérez-Tasso, commented: “I was immediately impressed both by Cheri’s extensive knowledge in the cyber domain but also her experience and strategic understanding of technology transformation taking place within the financial services industry. I am confident in her leadership capabilities to drive our own technology platform transformation as we continue to execute on our strategy, while also ensuring high levels of trust within the community on operational excellence, business continuity and risk and control.”

Cheri McGuire, incoming SWIFT CTO, said: “I am excited to join SWIFT at such a pivotal time as it is re-tooling cross-border infrastructure and fundamentally transforming payments and securities. I look forward to working with Javier, the rest of the SWIFT team and SWIFT’s member institutions, as we help to drive the future of cross-border financial transaction management.”

Fintech Week London 2021 confirms the city’s status as one of the world’s most important fintech hubs

Recent research finds Bitcoin mining unrealistic and unfeasible to invest in for UK businesses. Businesses in the Manufacturing industry are the most likely to succeed, however, their success probability in Bitcoin mining is 52 in 17.59 trillion and if successful, the profit only comes to £4,799.89.

Bitcoin, Ethereum and Dogecoin have all seen an increase in Google search popularity over the last couple of months. With Bitcoin bouncing around a valuation just short of £30,000 per coin, it’s the most popular and expensive digital currency currently available. Investing in the cryptocurrency is a viable pathway to attempt to increase business profit margins but it puts capital at risk due to the volatility of Bitcoin price. Purely looking at profit, a more feasible option would be to go into Bitcoin mining.

Researching the 21 most common UK business industries, Utility Bidder revealed the top 12 industries that would have the highest success probability in mining Bitcoin, and which industry would earn the most profit. Looking at businesses annualised yearly energy usage, how much power one bitcoin rig requires and the cost of powering each rig, Utility Bidder worked out the success probability and estimated each sector’s annual profit, if successful. 

The report builds on recent research with focus on their yearly energy usage versus potential scale of returns across an array of sectors. A common outcome is that concentrating energy usage on existing business goals would likely bring a higher level of profit than Bitcoin mining and that unless industries vastly increased their annual energy usage the odds of generating a return are extremely slim.

Other interesting findings from the research include;

•The difficulty level gets harder to mine Bitcoin in the competitive market

•Bitcoin mining is unsustainable and is detrimental to the environment

•The vast use of electricity required to successfully run Bitcoin mining machinery necessitates huge additional power consumption to cool the rig equipment

Below you’ll find a breakdown of the top three industries with the highest success probability.

For more information about Bitcoin mining potentials for UK businesses and full list of industries please see Utility Bidder’s article: https://www.utilitybidder.co.uk/compare-business-energy/is-bitcoin-mining-practical-for-uk-business/

1. Manufacturing

• Annualised average energy usage: 1,372,608 kWh
• Annualised average energy cost: £164,713
• How many rigs you could power for a year: 52.2
• Success probability: 52 in 17.59 trillion
• Profit if successful: £4,799.89

2. Environmental

• Annualised average energy usage: 1,194,552 kWh
• Annualised average energy cost: £143,346
• How many rigs you could power for a year: 45.4
• Success probability: 45 in 17.59 trillion
• Profit if successful: £26,166.89

3. Education

• Annualised average energy usage: 1,039,980 kWh
• Annualised average energy cost: £124,798
• How many rigs you could power for a year: 39.57
• Success probability: 40 in 17.59 trillion
• Profit if successful: £44,714.89

Market share statistics from CMA9 banks indicate that Token is driving adoption of open banking payments in the UK

Leading open banking payments platform, Token, today releases market share statistics* showing it is driving open payments adoption in the UK.

In the three years since open banking became a regulatory requirement in the UK, API call volume has increased from 66.8 million in 2018 to 5.8 billion in 2020. Over 2.5 million UK consumers and businesses now use open banking-enabled products, which has caused the number of total payments to grow by over a thousand percent since 2018.

Token is driving that expansion with best-in-class, European bank connectivity, data, and compliance capabilities. As of 30 June 2021, the company has:

●     Initiated 22% of all successful payment transactions in the UK in June 2021

●     Captured 37% of all market growth in the UK for open payments year-to-date

●     Driven 58% of all market expansion in the UK in the second quarter of 2021

●     Quadrupled its market share for open payments from the CMA9 in the last 6 months

●     Achieved annualised payments value of €2.3bn

In addition to significant growth in the UK, Token has partnered with BNP Paribas to launch the first SEPA Instant immediate payments offering for merchants in Europe, BNP Paribas Instanea. Token was also named Hottest Fintech Startup 2021 at The Europas, and together with BNP Paribas was a finalist for the Best Open Banking Partnership (Commercial) at the 2021 Open Banking Expo Awards.

Todd Clyde, Token CEO, is confident about the future. “At Token, we’re proud to be on the cutting edge of open banking technology. Our recent success at capturing market share and expanding to new markets indicates a very healthy future for Token, and for open banking in the UK and across Europe. As open banking reaches a critical tipping point, Token will continue to be at the forefront of the instant digital payment revolution.”

Token expects similar acceleration in growth rates in Germany by the end of 2021. A number of its multinational Payment Service Provider (PSP) customers, such as BNP Paribas, are looking to expand their offering in Germany and Austria. Earlier this year, Token also established a new EU headquarters in Germany and was granted official authorisation by German Federal Financial Supervisory Authority BaFin. With this license, Token can provide payment initiation and account information services, and build on the success of its open banking platform, across Europe.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown: 

‘’The banking bounce back has continued with HSBC doubling first half pre-tax profits as economies come out of their defensive hiding places, and the spectre of bad debt recedes.

Pre-tax profit for the period rose to $10.8bn, compared to $4.32bn for the same time last year.

The dividend is back but it’s not the bread and butter of better loan margins behind the push up in profits.  Revenues are down 4% as the ultra-low interest rate environment still bites and the huge investment trading upswing during the first half last year subsided.

Instead the worse-case scenario of an increase in bad loans hasn’t materialised, so the bank has been confident enough to release over $700 million that had been set aside as a buffer. It is in stark contrast to a year ago when it clocked up $6.9 billion in impairment charges.

Given the frightening twists the global economy has had to deal with due to the emergence of new variants, the worry is that there could still be monsters lurking under the bed, so the bank is keen to stress it views the recovery as still in the early stages. If inflation lingers, central banks may be minded to push up rates more quickly but that still looks like it is quite far down the road.

As well as expanding its overall wealth business, the bank has been shifting to Asia to try and sniff out higher returns, moving capital investment and staff from Europe and the US. Although recovery in the region has so far been good news for HSBC’s profits, it has faced reputational headwinds over accusations it was too close to Chinese authorities which have cracked down on pro-democracy protestors in Hong Kong.  Worries are now rife that there could be a downturn in investment due to Beijing’s crackdown on tech and online educational firms in particular. So far the bank says it isn’t changing its forecasts of investment pouring in to seek out opportunities, but the days are still early, and there are some concerns it could upset its resilient recovery.’’