Deutsche Bank AG developed Protection on
Accounts Receivable (PAR) to address Supplier concerns about customer credit with respect to outstanding receivable payments.

PAR is a simple contract where Deutsche Bank AG agrees to buy specified receivables at face value if the obligor files for bankruptcy.

Accounts Receivable Puts allows a Vendor to protect specifically against customers’ credit collapse, without affecting ongoing commercial relationships or regular payment processes. It also protects against the credit risk of a specific customer with potential credit or concentration issues.

The vendor pays a specified premium for credit protection on a designated amount of that obligor’s receivables during the contract term. Accounts receivable puts can be coordinated with other forms of receivables management, such as factoring or portfolio-based credit insurance. PAR documentation is straightforward, based on standardized credit market terms. Coverage available for public and liquid private companies.