Account Receivables Purchases Scheme ("ARPS")
What is ARPS?
ARPS is a type of working capital financing, whereby MUFG Bank purchase trade receivables at a discount from our customer (the "Seller"), on a non recourse basis in a manner of legal true-sale. The receivables are owed by pre-agreed obligors which are customers of MUFG.
Key Benefits of ARPS
- Diversification of funding sources (e.g. financing based on receivables instead of corporate borrowing)
- Accelerated monetization of assets and improved cash conversion cycle
- Payment risk mitigation (i.e. MUFG will not have recourse to the Seller for obligor's default risk)
- Potential off-balance sheet treatment*
* Note: MUFG Bank does not provide accounting advise. The Seller needs to consult with its own accountants and/or auditors for accounting treatment of each transaction.
Opportunities
ARPS will be suitable for customers who have a relatively concentrated portfolio of trade receivables, with concentration against specific obligors. If the portfolio is diversified, MUFG Bank can offer alternative solutions such as securitization.
MUFG Bank's Strength
MUFG Bank has been very active in providing receivables financing to our key relationship customers for decades, which is demonstrated by our track records. MUFG Bank has a global franchise in the US, EMEA and APAC including Japan. We have extensive experience in executing ARPS transactions in all major jurisdictions.