🏦 Payor Risk (Risco Sacado)

Here’s a comprehensive description of the operation involving Payor ("Sacado") risk within BRX Finance’s trade finance structure, based on the provided file:

Key Components and Actors:

• Investidor (Investor):
  Provides the capital necessary for the operation by purchasing tokenized assets (e.g., commercial notes).
• Sacado (Payor):
  The entity responsible for settling the obligations related to the trade finance operation. In this context, they are the buyers of goods or services and are obligated to make payments.
• Conta Dedicada (Dedicated Account):
  A specific bank account used to manage the funds related to the operation, ensuring proper allocation and tracking of the capital.
• Agente de Coleta (Collection Agent):
  Manages the collection of payments from the Sacado to ensure that the investor receives returns. This agent plays a crucial role in mitigating payment risk.
• Nota Comercial (Commercial Note):
  A financial instrument representing the obligation that is collateralized and tokenized in this operation, providing a way to convert the receivables into a tradeable asset.
• Smart Contract:
  Manages the issuance, distribution, and enforcement of the tokenized commercial note. It also ensures that the operational and financial terms are automated and carried out according to predefined rules.
• Contrato de Cessão (Assignment Contract):
  A legal agreement that formalizes the transfer of rights over the receivables from the supplier to the securitization structure. This secures the transaction for the investor.
• Colateralização (Collateralization):
  The commercial note is collateralized, ensuring that the operation has backing and is secured against default.

Process Workflow:

• Credit Analysis:
  Before engaging in any financing operation, a credit analysis is conducted to assess the risk associated with the Sacado (Payor). This step is crucial in determining the terms of the financing and ensuring that the payment obligations are likely to be met.
• Request for Financing:
  The supplier (e.g., a seller of goods or services) initiates the process by requesting an advance on the payments expected from the Sacado. This request is typically made when the supplier needs liquidity before the Payor settles their invoice.
• Issuance of Commercial Notes:
  After the credit analysis, commercial notes are issued by the securitization structure. These notes represent the receivables that the supplier is entitled to receive from the Sacado. The commercial notes are collateralized and then tokenized, transforming them into digital assets. This process provides transparency and facilitates the trade of these receivables in the secondary market, if necessary.
• Smart Contract Execution:
  The tokenization and management of the commercial notes are handled by a smart contract, which ensures that all predefined conditions are met. The smart contract also manages the flow of funds, distributing the advanced payment to the supplier and awaiting the eventual payment from the Sacado.
• Advanced Payment:
  The supplier receives the funds based on the commercial note. This provides immediate liquidity to the supplier while transferring the collection risk to the investor and securitization structure. The payment made to the supplier is typically a percentage of the total amount due from the Payor, with the remaining amount being held in reserve until the Sacado fulfills their payment obligation.
• Collection and Settlement:
  The Collection Agent is responsible for ensuring that the Payor (Sacado) fulfills their payment obligation. Payments are usually made via a boleto (a common Brazilian payment method), which is tracked by the Collection Agent. Once the Payor makes the payment, the funds are directed into the Dedicated Account, which is used to manage the capital flow.
• Final Distribution to Investors:
  After the Sacado makes the payment, the smart contract executes the distribution of the principal and any interest or fees to the investors who initially purchased the commercial notes. This step closes the transaction, and the investors receive their returns based on the successful fulfillment of the Payor's obligation.

Risk Mitigation

• Credit Analysis:
  The creditworthiness of the Payor (Sacado) is carefully analyzed before the transaction proceeds. This helps to mitigate the risk of default.
• Collateralization:
  The commercial notes are collateralized, providing security to the investors in case the Payor defaults on the payment.
• Collection Agent:
  By using a dedicated collection agent, the operation ensures a higher likelihood of timely payment, reducing the risk of delayed or missed payments.

Summary

This operation is a structured trade finance solution that uses securitization and tokenization to manage and mitigate the risks associated with Payor (Sacado) payment obligations. The process is designed to provide liquidity to suppliers while securing the receivables through a combination of legal contracts, smart contracts, and collateralization. The system ensures that investors can participate in a secured, transparent manner while the credit analysis and collection agent help manage the risks related to the Payor's ability to fulfill their financial obligations.