Enhanced debt financing products
Last updated
Last updated
AmFi has not created any new debt financing products. When investors use our platform, they invest in the same debt notes (CCBs) or debentures, that they are used to. The difference is that these debt products are enhanced by our platform, especially in terms of transparency, safety, governance, and even liquidity.
Although a lot has happened in capital markets over the years, one of the problems still faced today is information asymmetry. Investors who want to know how their investments are performing have to rely on reports from the originators of the operation. Not only is this a slow model of information sharing (sometimes investors have to wait several months to know how their investment is performing), but it also provides room for manipulation of these reports, resulting in lack of transparency in the process.
All AmFi Pools are recorded on-chain, so every new investment, asset purchase, repayment etc. is traceable. This creates an inviolable, secure and transparent on-chain credit history, perfect for investors to analyze the performance of their investments and make better investment decisions.
Screen on our platform showing how pools are perfoming:
Furthermore, at the time a pool is created, dozens of parameters in the form of eligibility criteria and business rules (e.g., maximum concentration of operations per borrower and subordination rate) are set and converted into smart contracts. These smart contracts run automatically, so that each time an originator wants to make a new loan, the order must meet the defined parameters, otherwise the request is automatically rejected. The originator never "touches" the capital directly, but uses the AmFi platform to submit new loan requests, directing the funds. All other steps of the process, such as guarantee control and bank orchestration, are automatic. In this way, we can guarantee that the funds in each Pool are used according to the eligibility criteria for which the Pools were created, which means more governance and security for investors. The last point is liquidity: each investment is associated with a token, a kind of receipt that can be transferred and opens the possibility of selling on a secondary market. This increases liquidity throughout the operation, whereas investments in credit funds are generally very illiquid.
