Not All Customers Are Equal:
Manage Exposure with Targeted Risk Management

Some customers offer more exposure than others. AR credit put options extend your flexibility when facing targeted risks.

An AR put option is a contractual obligation between a vendor and the put seller. If a vendor’s customer files for bankruptcy, the vendor has the option to assign (“put”) the qualifying receivables to the put seller at face value. The put seller has a senior obligation to buy the qualifying receivables at face value.

AR credit puts are not exchange-traded puts. They are offered by a select set of global financial service firms. Professionals use them to effectively protect select, high-risk, or concentrated exposures and to expand credit limits because they provide:

  • Non-cancelable protection
  • Flexible tenors from six months to five years
  • Up to 100 percent protection with no coinsurance or deductibles
  • No change to payment process or notice to customer
  • No reporting requirements
  • Less conditional documentation than other forms of protection

FGI Risk can help you determine whether AR credit put options are right for you.

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