FGI > Business Outline > Structured Finance

Have you heard of the term “structured finance”?
Structured finance is attracting growing interest among companies eager to embrace new business challenges.
To date, structured finance arrangements in Japan have largely been confined to certain areas. Notable among these is the securitization of assets, especially real estate. Because of this many companies regard "structured finance" as unsuitable for their needs. However, "structured finance"is an essential tool that can be employed by all people who are considering growth strategies for their companies.

One of the main functions of structured finance is to create arrangements that broaden your company’s fund-raising possibilities.
Companies wishing to initiate new projects, expand business domains, or enter new fields often need to raise more funds than traditional bank loans can provide.
With structured finance, we create an arrangement that allows your company’s know-how and managerial assets to be directly evaluated by investors and others. This is completely separate from your company’s credit standing.

		A structured finance transaction is a package of several components for risk management. It is essential to coordinate the project participants, who need advice from legal, accounting and taxation perspectives.		Principal arrangement services 1.Risk analysis and due diligence 2.Risk and return analysis, and coordination among project participants 3.Establishment of basic structure 4.Specialized services, related to legal, accounting and taxation issues 5.Market research about capital markets and financial institutions 6.Investments and guarantees

		Fees for arrangement services are contingent fees. In principle, no contingent fee is charged if problems are encountered in arranging the scheme, and as a result the scheme falls through.

Many companies sell equipment that requires long inspection periods or handle projects with long time frames. Owing to the extended period from the start of a project to actual generation of revenue, this can have a detrimental effect on a company’s operations.

If you are in a business such as retailing with daily or periodic large sized cash flows, we can create a structure that enables you to isolate sales contracts/debts and credits or a specific project outside your company, for more efficient fund management.

If you wish to eliminate a specified risk from your company’s business, we can create a structure that enables you to isolate that risk and transfer it outside your company.
Risks thus isolated are passed to insurance companies and other overseas entities as “guarantees” or structures with similar characteristics.


		A key to stabilizing structured finance arrangements is our credit enhancement service which provides a capital risk solution structure wherein the financial risks inherent in securitization or structured finance transactions are underwritten by insurance companies in such forms as guarantees.

		Our consolidated subsidiaries, FinTech Capital Risk Solution, a joint venture with the largest insurance broker in Europe, provide top-level credit enhancement services in Japan.

We work as your partner to create the optimal structure for your needs. Adopting an impartial stance, we act as coordinator to put the relevant parties in place and set up your fund-raising scheme. In addition, we can offer a principal finance service for your project. This means we can provide bridge finance in cases where,because of time constraints or other factors, a final commitment cannot be obtained from the intended fund provider or investor. This enables you to close the deal on schedule.

Sometimes, lenders and others find it difficult to make a commitment for a number of reasons. For example, the production lots may be small at the start of the project, or the company’s track record using the scheme is short. In such cases, we can provide principal finance, injecting the necessary capital to get your project on track.

TOP