Greensill securitised the supply chain cash-advance loans it made to its clients, with funds managed by Credit Suisse and GAM Holding AG investing in the notes. But the two Switzerland-based investment banks shut the funds down after Greensill lost its coverage from a credit insurer.
As part of its insolvency filing, the cocompany confirmed that the loss of the USD 4.6 billion contract with Australian insurer BCC triggered its collapse.
More than 50% of the investors in the Credit Suisse funds were based in the US, including blue-chip companies and government agencies. As a supply-chain lender, Greensill pays its clients’ suppliers early, but at a discount, making its profit when the client pays off the full amount. It also lends money to clients, secured on invoices the clients themselves are owed.
Greensill’s staff grew to more than 1,000 employees in 2020 from 600 in 2019. It has also acquired a string of fintech businesses in the past 18 months.
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