When entering into a new commercial contract for the supply of materials related to an IP network buildout, a $10 billion construction services firm was expected by their customer, a global Fortune 100 company, to offer flexible payment terms giving this customer (obligor) the option to provide payment terms between 30 and 360 days.

The leading construction company needed a financing solution that would provide working capital financing flexible enough to cope with the timing uncertainty of invoice payments and yet accomplish balance sheet derecognition under U.S. accounting standards.

Prevailing U.S. accounting standards presume that the invoice payment date is fixed at the time of the invoice purchase in order to accomplish balance sheet derecognition.

Raistone innovated a unique solution enabling the obligor to freely choose the payment date even after the invoice is purchased and yet maintain the desired off balance sheet treatment, i.e. the Raistone facility does not count as debt on the construction company’s balance sheet.