Credit Enhancement Insurance assists Bank and Non-Bank finance providers in mitigating or transferring their credit risk by covering financial loss under loan agreements or managed capital allocation.
It offers proven and profit-enhancing alternatives to traditional cash syndication and sub-participation, underpinned by favourable regulatory implications.
Assetinsure has participated in risk facilities totalling US$6.0 billion globally, accommodating over 35 industries across a vast array of facility types.
With credit enhancement, Lenders could benefit from increased regulatory and capital flexibility, and have access to higher collateral leverage, a longer loan term, lower amortisation profiles and/or improved risk pricing.
Credit enhancement insurance policies are issued by HDI Global Specialty SE Australia, a wholly owned subsidiary of A+ S&P rated HDI Global Specialty SE.
We are a team of highly qualified banking professionals each with over 25 years’ experience in wholesale banking, commercial lending and loan syndication.
Credit Enhancement FAQs
Credit Enhancement Insurance Policies (CEIPs) - how can they help?
- When borrower exposure limits are reached
- When collateral type and asset class credit approval restrictions exist
- When risk sharing is required outside of traditional bank sell down routes
How are CEIPs structured?
CEIP coverage can be structured on the basis of either;
- First loss protection; or
- Proportional (i.e. pari passu) participation.
What can a CEIP provide?
- Tangible liquid security (HDI Global Specialty A+ S&P rated);
- Cost effective risk management to the benefit of lenders and their borrowers;
- No loss of control where a First Loss position is taken (full subordination to the Lender).
What types of customers do CEIPS support?
- Single large commercial real estate investments, structured corporate finance, leveraged finance, commercial equipment lease finance or asset backed loan facilities;
- Infrastructure or project finance type facilities where risk sharing is required;
- Defined risk positions in corporate trade accounts receivable warehouse loan and securitisation funding structures;
- Defined risk positions in other pooled commercial mortgage or equipment loan / lease warehouse and securitisation funding structures.
What is the benefit of a CEIP?
Specific benefits provided to the parties are:
- Managed Risk – Borrower achieves an attractive “term”
- Credit Relief
- Cost effective
- Client retention
- Undisclosed – bilateral transaction direct with the Bank
- Recovery Enhancement