Journey
- Concept
- Structuring
- Validation
- Scale
- Institutional capital
Context
The partner
Originator specializing in receivables financing for distributors of orthotics, prosthetics and special medical supplies (OPME, the Brazilian acronym) in the private healthcare sector.
The challenge: strengthening the operating structure
Concentration among assignors and obligors, combined with the level of provisions, brought the vehicle’s subordination close to the agreed minimum.
Key decisions
Monitor the portfolio’s credit metrics and improve receivables assignment, collections and provisioning
Detect deviations early and fix the root cause in the processes, not just the ratio
Model provisioning scenarios and the waterfall across quota classes
Measure the impact on each class before proposing a solution
Restructure the existing fund, under mandate, to expand senior funding
More capital, without interrupting origination
Structure
Flow
Capital structure
Protection mechanisms
- Contractual minimum subordination
- Portfolio credit metrics under monitoring
What Uruk did
Build
Support- Review of the portfolio and origination process
- Improvement of receivables assignment, collections and provisioning processes
- Design of the vehicle’s restructuring
Capital
Lead- Investment in a mezzanine quota to restore the contractual minimum subordination
- Work with the originator and the fund administrator on the restoration
Institutional traction
Lead- Mandate to restructure the fund and expand senior funding
- Structuring of senior quota terms, with the administrator and distributor
Horizon
Subordination restored above the minimum. Next step: carry out the fund restructuring mandate to increase the volume raised in senior quotas, at more competitive rates.