Credit Trading

Credit Trading is the restructuring of the balance sheets of corporate customers through the purchase of the customer's debt and monetary claims. The Bank deals in a wide range of types of debt not limited to monetary claims such as loans held by financial institutions (banks and non-banks), but also receivables held by corporations. In addition, we not view the credit trading business simply as the purchase of assets (i.e. acquisition of monetary claims), but as an opportunity to provide high added-value to the corporate and financial rehabilitation efforts of corporate customers (businesses and sole proprietors) that are facing a variety of challenges. For example, in an economic environment with high volatility where customers are not able to find viable solution to their challenges via traditional routes, and a drastic restructuring is required, SBI Shinsei Bank meets the needs of its customers through the provision of custom made schemes.

Investment Targets

  • Monetary claims (e.g. bank borrowing, non-bank financial institutions borrowing, borrowing by a subsidiary from its parent company, etc.)
  • Account receivables/long-term receivables/account receivables from construction contracts/etc.
  • Tenant security deposit refund claims (after vacating)
  • Right to indemnity after fulfillment of guarantee obligations

We maintain close relationships with financial institutions across Japan as well as wide-ranging business relationships with major industrial companies. We have a well established track record in the handling of credit trading transactions. We, which is staffed with personnel with a large amount of experience and cutting-edge knowledge in their fields, have taken over the credit trading business to offer our customers the most effective solutions available.

Examples of Solutions

  • Financial restructuring (re-scheduling, debt equity swaps (DES), partial debt forgiveness)
  • Spin off of unprofitable businesses and subsidiaries (utilizing M&A and corporate splits)
  • The smooth implementation of restructuring (soft landing)
  • Shortening of corporate rehabilitation proceedings (such as early collective disposal)
  • Fundraising support through asset sales
  • Removal of bonds associated with past business relationships
  • Restoration of normal transactions with banks (credit creation support)
  • Provision of loans based upon the value of real estate assets such as loans for real estate purchases, project finance, etc.
  • Provision of business funds to companies undergoing restructuring including debtor in possession (DIP) finance
  • Financing for business restructuring by listed companies

We perform a number of integrated functions, including the identification and evaluation of projects, negotiations with customers, preparation of contract documents, administrative operations for assigning debts, and post deal administration. Furthermore, we offer diversified solutions that meet the various needs of our customers such as corporate rehabilitation through the provision of comprehensive services such as loans and M&A made possible collaboration within the SBI Shinsei Bank Group.