Accounts Receivable Put Options

Summary information on A/R Put Options:

• Issued to cover large, publicly traded companies (or large private companies with audited financial statements)
  
• Issued to cover one company (not multiple companies)
  
• Issued by investment banks (not insurance companies), but are not sold through securities exchanges
  
• Provides protection on 100% of the invoice amount (no deductible or coinsurance)
  
• Only covers against the risks of Chapters 7 & 11 bankruptcy (does not cover for protracted default)
  
• Cannot be cancelled by the issuer
  
• Can provide protection on invoices with tenors up to 24 months
  
• Will normally be issued only on face amounts in excess of $500,000
  
• Compared to accounts receivable insurance
  

1. More expensive - 0.25% - 2% of the face amount per month
   
2. Often available when accounts receivable insurance is not
   
3. No deductible and no reduction for co-insurance
   
4. Non-cancellable (some insurance policies are issued as non-cancellable, but most give the insurer the right to cancel coverage on buyers with sufficient notice to the policyholder)
   

Following are just a few of the companies for which A/R Put Options were available, as of 4/10/2019.  A/R Put Options are available for companies in sectors, including retail, food & beverage, automobile, technology, metals & mining, industrial, energy, utilities, and telecom.

• AutoZone, Inc.
• Bed Bath & Beyond, Inc.
• Best Buy Co., Inc.
• Dillard's, Inc.
• The Gap, Inc.
• Gamestop Corp.
• GoPro, Inc.
• Guitar Center, Inc.
• Hudson's Bay Company
•  JC Penny Co., Inc.
• Kohl's Corp.
  
• L Brands, Inc.
  
• Macy's, Inc.
• The Neiman Marcus Group, LLC
• Nordstrom, Inc.
• Office Depot, Inc.
• Petco Animal Supplies, Inc.
• PetSmart, Inc.
• Rite Aid Corp.
• Toys "R" Usadio Shack
  
• Rite Aid
• Tesla
  
• ​Dean Foods
  
• Avis Budget Group
  

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