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Bankers attempting to close massive buyout financings – Industry roundup: 19 August

Increasing blockchain adoption in supply chains via OrionOne and VeChain alliance

VeChain, a global enterprise blockchain provider, and OrionOne Inc., a global supply chain technology solutions provider and developer of a SaaS platform, announced the integration of their technologies to speed up blockchain adoption among logistics companies. The integration aims to enable companies to seamlessly and rapidly begin utilizing blockchain in their business without the need for costly investments in network infrastructure or monitoring of cryptocurrencies.

Decentralization is a key feature of public blockchains and acts as a trust mechanism, enhancing the reliability of data when managing various stakeholder groups. Blockchain reportedly improves supply chains and lowers logistics costs in a variety of ways, including record keeping, compliance and dispute resolution.

Supply chain management is expected to be a US $42 billion-per-year industry by 2027, but it comes with several obstacles. These challenges, however, may present a unique opportunity for innovation through the use of emerging technologies and the digitization of supply chains.

The logistics software from OrionOne is said to offer a complete picture of a product's path to market, assisting businesses in organizing and managing people, resources and items throughout the entire supply chain, including transactions and supplier relationships. "A key barrier to wide blockchain adoption is the application layer that connects infrastructure to specific business problems," stated Jason Rockwood, General Manager, VeChain US Inc. According to reports, OrionOne streamlines the data collection process and makes the value of blockchain tangible and easy to deploy, saving corporate clients time and capital while keeping them up to date on the latest supply chain technology innovations.

Enhanced trade finance transactions: CHIMEI and Bolero partnership

Bolero International, a WiseTech Global company and provider of cloud-based trade finance digitisation solutions (established by SWIFT in 1998), has partnered with CHIMEI Corporation, a Taiwan-based performance materials company that designs and manufactures advanced polymer materials, synthetic rubbers, and specialty chemicals.

The transaction reportedly involved a shipment under LC terms from CHIMEI in Taiwan to Kin San Chemical in Hong Kong over a two-day period. Wan Hai Lines provided the Bolero eBL (electronic Bill of Lading) as part of the electronic presentation of documents, which included CTBC Bank in Taiwan and Bank of China in Hong Kong. Bolero's Galileo platform was said to improve the efficiency and security of this electronic document exchange, expediting a process that previously took weeks as parties exchanged physical documentation across multiple countries. The companies in this case reported that the entire end-to-end transfer of secure electronic documents took only three days.

Bolero's Galileo Multi-Bank for Corporates platform offers improved features and capabilities with the ability to easily integrate with banks and other third-party systems, as well as end-to-end accessibility to corporate clients and banks. Through this system, CHIMEI is reportedly able to manage their ePresentations from a single platform.

With increased demand for digitisation of trade finance operations, Bolero is gaining traction among Taiwanese corporates and banks that are eager to digitalise their manual paper-based processes. For paperless trade solutions, Bolero claims to have the world's largest financial institutions directly connected to its 24/7 global network, enabling immediate settlement between parties and real-time document exchange with 100% accuracy, a comprehensive audit trail, and proof of delivery.

According to Andrew Raymond, CEO, Bolero, the region's shift toward digital trade has accelerated in the last year, driven by the desire to keep supply chains open during periods of uncertainty. David Wang, VP and Operation Division Head, CHIMEI, further commented that using a paperless trade solution helps contribute to ESG practices while providing customers with secure, expedited transactions.

Citrix bankers to propose a new structure for US $15 billion in buyout debt

Bankers, including Credit Suisse Group AG, Bank of America, Goldman Sachs Group Inc., for Citrix Systems Inc. are reportedly attempting to close one of the largest buyout financings of the last decade off their books. They are offering investors a revised US $15 billion deal to help avoid potential losses as the credit market begins to ramp up, according to reports.

Reports indicate that the banks are currently assessing interest in a new potential $500 million-equivalent leveraged loan denominated in euros as they hold pre-marketing discussions with investors this week. According to a January filing, the expected secured bond portion of the financing is said to be $3 billion, down from the original debt commitments of $4 billion. The group of banks are seeking to capitalize on the recent credit rally, which has created an opportunity to offload the debt. The deal's formal launch is expected after the US Labor Day holiday on 5 September, subject to change.

According to Bloomberg reports, Credit Suisse Group AG leads the secured bond, while Goldman Sachs Group leads the unsecured bond, and Bank of America leads the loan component. However, reports indicate that the banks have revised other aspects of the transaction to make it easier to sell.

In January 2022, the group allegedly promised to provide financing to help support the software company's buyout by private equity firms Vista Equity Partners and Elliott Investment Management. The initial plan was to sell the debt using the high-yield bond and leveraged loan markets, but this was complicated by a worsening of credit conditions in the months that followed.

UBS moves towards AI by investing in BigPanda, a tech unicorn

UBS Group AG, a Switzerland-based multinational investment bank and financial services company, is investing in BigPanda, an artificial intelligence IT operations (AIOps) platform, through UBS Next, the firm's strategic venture and innovation unit.

BigPanda's platform seeks to automate incident management processes by leveraging machine learning to predict, detect and respond to incidents within complex IT systems. The platform reportedly assists businesses in lowering costs, improving service availability, increasing transparency and improving the speed of IT operations.

UBS Next, through its US $200 million portfolio, reportedly invests in and partners with early-stage fintech and tech start-ups, as well as in innovation projects that turn ideas into viable businesses. Specifically, the unit is researching innovative and effective ways to engage clients and deliver solution-oriented services using cutting-edge technology.

Eurex broadens its FX Futures offering to include currencies from emerging markets

Eurex, the largest European-based international exchange, which trades mainly European-based derivatives, is expected to begin trading new FX Futures contracts that cover the Brazilian real (BRL), Mexican peso (MXN), and South African rand (ZAR) on 10 October 2022. Eurex's stance as Europe's top FX liquidity hub will reportedly be strengthened by the introduction of the three most actively traded currencies outside of the G10.

Reports indicate that there will be a total of five new contracts listed, covering the currency pairs BRL/USD, MXN/USD, MXN/EUR, ZAR/USD, and ZAR/EUR. Additionally, a liquidity plan is in place to ensure rigid pricing and competitive liquidity. When new contracts expire, they will be paid in cash in either US dollars or euros. As a result, clearing members are not required to set up new cash accounts in these emerging market currencies and can continue to use their current infrastructure, according to reports.

Eurex’s FX product offering now includes FX Futures on 25 currency pairs. The entire portfolio is taken into account when calculating margins, resulting in greater efficiencies in collateral to be deposited.

Ripple collaborates with Brazilian-based Travelex Bank to introduce crypto-enabled enterprise payments

Blockchain and crypto provider, Ripple, launched RippleNet’s On-Demand Liquidity (ODL) in Brazil with Travelex Bank, the first Latin American bank to use ODL. Travelex is also the first bank in Brazil to operate solely in foreign exchange, registered and authorized by the central bank of Brazil.

Ripple's ODL solution, which utilizes XRP, a digital asset for payments, reportedly will enable customers to transfer funds across borders instantaneously with reduced settlement costs and without the need to hold pre-funded capital in the destination market. Additionally, customers will have easy access to liquidity, enabling them to better grow and scale their business.

According to reports, Brazil has advanced cryptocurrency legislation to establish a framework that protects consumers while also encouraging innovation. At the same time, as consumer interest and institutional investment continue to rise, crypto adoption in Latin America is also rapidly increasing. Brazil reportedly receives over US $780 billion in payments each year, making it a lucrative market for Ripple and its clients to leverage from cost-effective and accelerated cross-border payments due to the capabilities of cryptocurrency.

Travelex Bank intends to make international funds more accessible to customers through a variety of services such as remittance and international payments, ATMs and multicurrency prepaid cards. Additionally, Travelex is expected to support payments between Mexico and Brazil initially, with potential plans for additional use cases, such as internal treasury and high volume small and medium-sized enterprises (SME) payments.

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