Coface is one of the leading credit insurers worldwide, employs around 4,250 staff in 100 countries and achieved a turnover of Euro 1.5 billion in 2019. The group supports around 50,000 clients in establishing and developing business. The products and services protect companies in national and international business from bad debt losses and are building blocks in credit management. Coface offers credit insurance, factoring, credit information and debt collection, worldwide for companies of all sizes and sectors.
Credit enhancement for securitisations
For banks and their financing vehicles, special insurance policies "Asset Backed Securitisation - Credit Enhancement Contracts" (ABS CE-Police) are issued to protect securitised portfolios.
The credit enhancement of Coface is a credit insurance which secures the entire structure and its various risks. In addition to the political risks it covers the insolvency and non-payment of purchased and financed receivables within the framework of an ABS transaction. The underlying payment histories of the debtors are used to analyse and assess the debtor structures. This also gives banks a better insight into the risk portfolio and simplifies the due diligence process. In addition, debtor concentrations are covered, because if a single risk accounts for more than two percent of the total portfolio, the concentration risk is hardly manageable and acceptable for banks.
Banks use credit enhancement as an additional security to raise a portfolio to a better rating. In the event of non-payment or delayed payments, Coface undertakes to pay the defaulted amounts to the investors and to act as a guarantor in the ABS transaction.