Kroll Bond Rating Agency Europe Limited (KBRA) assigns preliminary ratings to six tranches of notes (the "Notes") issued by Gedesco Trade Receivables 2020-1 Designated Activity Company (“Gedesco 2020-1”).
Gedesco Services Spain S.A.U. (“Gedesco”, the “Servicer” or the “Company”) is a specialised non-bank financial institution that offers factoring and promissory note lending services. Established in 2001, Gedesco now offers products through several different subsidiaries and related companies, Toro Finance S.L.U., Gedesco Factoring S.L.U. and Pagaralia S.L.U. (together referred as the “Sellers” and individually as a “Seller”). Each Seller adheres to its own underwriting policies, products, and target market strategies. As of 31 July 2019, the preliminary portfolio has an outstanding balance of €357.7 million, which consisted of 9,302 contracts and 1,634 unique debtors.
The Notes will be secured by a revolving pool of receivables consisting of (i) direct lending, (ii) promissory notes, and (iii) factoring receivables. The transaction features a revolving period (the “Revolving Period”), which will end on the earlier of (i) the payment date occurring in the month that is 36 months after the initial closing date, and (ii) the date on which an Amortisation Trigger Event occurs. During the Revolving Period, the transaction will only pay interest and use proceeds from the repayment of receivables to purchase additional eligible collateral so long as all conditions set forth in the transaction documents are met. Following the end of the Revolving Period, all remaining funds after payment of servicer advances, fees and interest will pay down the rated Notes sequentially.
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