IBA-Venice-22-Chains-go-with-incentive.pptx

IBA Venice

1. ‘Chains’ go with ‘incentive’: new trends in supply chain asset-based lending solutions Session Co-Chairs Gregorio Consoli Giuseppe Schiavello Speakers Margaret Boswell Martin Ebner Andrea Feliciani Arianna Volpato

2. Co-Chairs Giuseppe Schiavello Gregorio Consoli

3. Panelists

4. Margaret Boswell Margaret Boswell has been a partner in the Banking & Finance/Project Finance practice group of Gide's London office since 2004. She has substantial experience in international finance, including general banking law and capital markets, as well as structured finance generally and securitisation in particular. She has specific expertise in project-based finance having worked on many cross-border transactions including multi-jurisdictional secured financings for corporations and development banks, especially in emerging market jurisdictions.

5. Martin Ebner Martin Ebner is a partner at Schoenherr in Vienna and member of the firm's banking, finance and capital markets practice group. Martin frequently advises financial institutions on some of their key legal challenges (e.g. in relation to IBOR-transition, financial sanctions or ad-hoc / crisis situations). In the transactional area, he represents arrangers and lenders active in the region as well as borrowers and issuers in transactional work in Austria/CEE. He has a proven track record in respect to many different types of complex debt structures, where he advises lenders, investors/sponsors and borrowers alike. Martin specialises in finance (incl. corporate finance), limited-recourse (project and acquisition) finance, leverage finance, transactions in banking exposures and special situations investments, derivatives and structured finance (incl. receivables and asset-based finance) as well as debt restructurings and re-financings.

6. Andrea Feliciani Andrea has 20+ year experience in structuring and executing asset backed transactions in different capacities and jurisdiction. Andrea joined Banca CF+ (formerly Credito Fondiario ) in 2018; before that he was heading the ABS team in London for CA-CIB after having worked for Lehman Brothers for several years. Andrea started his career in Clifford Chance specializing in ABS and structured finance transactions. Andrea holds a JD from La Sapienza University in Rome and an LLM from Fordham University (NYC) and was admitted to the NY BAR in 2004.

7. Arianna Volpato Head of Master Servicer & Operations Zenith Service Arianna started her experience in April 2019 as part of the Structuring Team of Finanziaria Internazionale . She acted as arranger for Italian Covered Bond Programmes and Securitisation of performing and non performing assets with different type of collateral, e.g.: Residential Loans, Leasing Receivables, SMEs Loans and Auto Loans. She joined Zenith Service in September 2017. Arianna is in charge of the Master Servicer and Operations Area since October 2018. She graduated in Economics in the University of Venice – Ca’ Foscari.

8. Andrea Feliciani

9. SMEs contribute for the 53% of the EU GDP Covid-19 Financing Gap Energy and Raw Materials Payment Terms Key issues affecting SMEs Covid-19 affected EU-27 SMEs disrupting global supply chain and is continuing SMEs in Europe lack an estimated 400bn of bank-financing . SMEs dependency on banks remains high in the Eurozone with 70% of external financing being reliant on banks vs 40% in the US Supply chain disruptions and recent conflicts and tensions have increase raw material and energy costs The SMEs have registered a greater increase in payment delays compared to larger ones (+30 days). It has been showed an inversely proportional rate between dimension and increase also amongs t SMEs Can Supply Chain Finance (SCF) help the SMEs ? Enterprises by GDP Contribution Enterprises by # Employment SMEs employee more than 82 mln of workers 22.5Mln EU-27 Companies Why Supply Chain Finance ?

10. Supply Chain Finance Key Objectives Facilitate Access to Financing Reduce cost of Funding Reduce Financing Needs Profiling the Chain Seasonality Jurisdictions Chain Flow 1 2 …can provide a framework for the profiling of the value chain , including a wide range of aspects from logistics and operations management, and offer a suited solution based on the specific SME’s needs. Evaluating not only the single SME but the entire chain in which it operates. It gives the possibility to better evaluate the business, the channels of provisioning, weaknesses and strengths Analysis 3 Type of Industry Financial Analysis Customer Financial Analysis Supplier

11. SCF Markets Size Supply Chain Finance Solutions Focus on Trade Receivables Focus on Debt Receivables Focus on Inventories Technological Impact Only the 24-27% * of the market served in Europe * Estimates for the 2021 Source: Report from Osservatorio Supply Chain Finance – Politecnico di Milano Challenges and Opportunities DEEP TIER FINANCING BLOCKCHAIN €7 Tn €5 Tn €4 Tn

12. Margaret Boswell

13. SUPPLY CHAIN FINANCE STRUCTURES Factoring Supplier Bank Customer 1. Goods & Invoice £100 due 90 days 2. Invoice 3. Purchase of Invoice @ £90 day 2 4. Payment of £100 day 90

14. SUPPLY CHAIN FINANCE STRUCTURES Supply Chain Financing Customer Bank Supplier 1. Goods & Invoice £90 due now or £100 in 90 days 2. Invoice 4. Payment of £100 day 90 3. Payment of £90 day 1

15. ISSUES IN STRUCTURING SUPPLY CHAIN FINANCE Accounting sales of assets (receivables) @ Supplier vs. financial indebtedness @ Buyer Tax VAT on services by Bank (to …) documentary taxes ( eg stamp duties) consolidation (impact on the group) Legal and Regulatory

16. LEGAL AND REGULATORY ISSUES IN STRUCTURING Is the receivable capable of being transferred, and if so, how? Treatment on Insolvency / true sale Data Protection Consumer Protection Financial Regulation AML and KYC checks Sanctions Supply Chain Due Diligence

17. Annalisa Volpato

18. THE MASTER SERVICER The Servicing issues How to choose the sub servicer? The Difference between Collection and Recovery Who can be the subject in charge of the recovery process? Servicer’s Challenges Frequency of Transfer Tailor Made Solutions depending from the Seller’s needs

19. Questions from the floor