Unlocking New Possibilities: Tokenizing Existing Credit Facilities on the Credix Platform

As a leading private credit portal connecting institutional investors with credit opportunities in Latin America, we at Credix are excited to announce our latest protocol upgrade, which now allows for the tokenization of existing credit facilities.

Previously, we were only able to bring new credit facilities on-chain, with the funding for these facilities happening on-chain as well. However, with the latest platform upgrade, funds like Addem Capital can now tokenize their existing credit deals, increasing the scalability of their business and tapping into a wider pool of potential investors.

Here is how it works

An asset originator or FinTech with an existing facility with Addem Capital, for example, can build up a track record of timely repayments. Our risk and structuring team takes up this historical payment data in the due diligence process to ensure the quality of deals brought to the platform.

A new structure for the deal is then created, which often involves a senior/junior tranche setup. Tokens are then issued to Addem Capital for both the senior and junior tranches, with no funds being moved in the process. From this point on, all repayments happen on the Credix platform, increasing the deal specific token value.

Here is what it enables

For fund managers like Addem Capital, the restructuring of deals from uni-tranche to senior/junior tranches allows them to sell part of their senior exposure to the liquidity pool or other investors on the Credix portal, freeing up capital to invest in other credit deals. They can keep the junior exposure, which serves as protection for the senior investor and offers them a higher yield than before.

The tokenization process also provides increased transparency, as investors can now track their investments in real time and have a clear view of the performance of the underlying credit facility. Additionally, this later on will (technically) allow for the tokenized credit facilities to be traded on secondary markets, providing increased liquidity for investors and allowing them to easily exit their positions.

This new upgrade provides tremendous efficiency gains and increased scalability for credit funds.

Stay tuned for more product updates and releases!