BNP Paribas’s commodity loan securitisation first explained

Author: Danielle Myles | Published: 5 Sep 2013
  • BNP Paribas has originated and arranged Lighthouse Trade Finance Issuer 1 – the first securitisation to be backed by commodity trade loans;
  • Commodity finance securitisations to-date have involved credit receivables and been issued through commercial paper conduits;
  • As Lighthouse’s loans vary greatly in size, they are sold to a master platform which issues the notes through underlying issuer vehicles. This ensures that the portfolios were backed by diversified assets;
  • Other banks are looking at replicating the platform. But those with a smaller loan portfolio than BNP Paribas might have to consider alternative structures, as they may not be able to achieve an AAA rating. 

BNP Paribas has used a master trust structure to complete the first securitisation backed by commodity trade loans.

The $132 million deal known...