FSDH -

The Corporate Group attends to the needs of corporate clients that need funds to finance their business operations as well as provide financial advisory services. Through the corporate group, FSDH is able to provide a market for commercial bills (Commercial Papers and Bankers Acceptances) issued by companies. However, in most cases, FSDH would buy the commercial bills issued by the company thereby providing funds immediately. The bills are subsequently sold to other investors, particularly through our investors group.

The corporate group provides the following products:
Commercial Bills Outright Purchase and Sale:

FSDH buys Commercial Bills directly from the issuers or through reputable institutions acting as issuing houses. When such bills are sold to investors on an outright basis, the investor has recourse to the issuers for the amount due on the investment on maturity.

Commercial Bills Buy-Back:

The sale of Commercial Bills by FSDH to an investor with a buy-back clause implies that, FSDH is committed to repurchase the Commercial Bill from the investor before its maturity.

Here, the yield on the investment is higher than that on Treasury Bills and the investor has two layers of recourse. The first recourse is to FSDH, implicit in the buy-back commitment. The second layer of recourse is to the issuer, that is, in the event that FSDH does not fulfil its obligation. If the instrument is a Banker’s Acceptance however, there is a third level of comfort through the bank that added its acceptance to the instrument. There has however not been any need to go beyond the initial level of recourse to FSDH.

Commercial Bills Sell-Back:

In this case, FSDH purchases Commercial Bills from an agent with a sell-back clause usually stating that FSDH would sell the bill back to the seller before its maturity. The parties agree to a maturity date, usually not the actual maturity of the bill, for this transaction.

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