AIG Europe (UK) has established AIG Trade Finance, a new venture that will facilitate access to the capital markets to securitise trade credit accounts receivable.


To achieve this, AIG Trade Finance will align trade credit insurance directly with trade finance. The company’s new capabilities include comprehensive due diligence, a new technology information and control system, new capital markets-friendly documentation and the strength of the AIG companies, claims the firm. This capability is designed to benefit both banks and corporate clients by making access to funds both cheaper and easier.


Commenting on the newly formed company, Neil Ross, senior vice-president, Trade Credit, AIG Europe (UK) says: “Until now trade receivables have been a difficult asset class for banks to lend against, primarily because their value changes every day as bills are paid and invoices issued. In addition, banks need to respond to the new regulatory requirements imposed by the introduction of Basel II. AIG Trade Finance offers a compelling solution.


“By using the latest technology to track the value of the receivables, we are able to simplify this. AIG Trade Finance can assist with the structuring, and its documentation, systems and operating procedures can remove much of the complexity associated with securitisation structures. The intended result is that more corporate clients will be able to access funds from the capital markets at commercially attractive prices.


“The financing of the receivables is directly supported by credit insurance from AIG Europe (UK) Limited, an appointed representative of New Hampshire Insurance Company.”


New Hampshire Insurance has a financial strength rating of AA+ from Standard and Poor’s and Fitch Ratings, Aa2 from Moody’s Investors Service, and ‘A+ “from AM Best Company.


The board of directors for AIG Trade Finance will consist of Dan Glaser, managing director, AIG Europe (UK) and John Salinger, president, AIG Global Trade & Political Risk Insurance.


Ross, recently appointed chairman of the company, has also announced that David Bonsall and Alastair Malcolm have been appointed to the board. “David and Alastair are recognised figures in the legal, banking and trade credit insurance industries and have now brought their years of experience to AIG Trade Finance,” he said.


Bonsall has been a leader in the field of securitisation for over 20 years. As a lawyer he was extensively involved in the development of the securitisation market in the UK and Europe from 1984 and he was the lead capital markets and securitisation partner at Freshfields (now Freshfields Bruckhaus Deringer) until late 1993.


He then joined UBS where he was responsible for their European and later their global asset-backed business. In over four years of his leadership, the UBS teams arranged or participated in well over 75 transactions, many of which were innovative, securitising new asset classes and dealing with many multi-jurisdictional issues.


After the merger between UBS and Swiss Bank Corporation at the end of 1997, he took over 20 of his team to Canadian International Bank of Commerce (CIBC) to establish a new international securitisation business. This was a highly successful operation from the beginning, again dealing with many new asset classes and structures.


Malcolm has worked in the London insurance market for more than 20 years after qualifying as a chartered accountant with Coopers & Lybrand. He specialised in credit insurance and formed PanFinancial Insurance to launch excess of loss credit cover.


More recently, he has pioneered the use of online credit limits from status agencies to improve dramatically the cost base of traditional credit insurance. This was developed in AMA Underwriting Agencies, where he was chief executive from its foundation.