Specialist fixed income investment firm FIIG has found a way to apply 'securitisation type' obligations on well performing companies without the complex structures.

One thing that most of FIIG's bond market investors  - high net worth individuals and self managed super fund owners - have in common is that they've been able to refinance some expensive bank debt with longer dated and cheaper money, raised via the unrated corporate bond market - with FIIGs debt origination team being one of its main proponents.

This old school approach has opened the way for investors to buy into the higher yielding end of the lending sector at very attractive returns.

So, along with 'fintech' the one-word phrase 'disintermediation' will again edge back into the vernacular, as the banks' central role sitting between depositors and borrowers is eroded.

Tony Perkins, head of credit structuring at FIIG, is an ex-UBS banker with mortgage-backed security market experience. He says this approach is reflected in how FIIG goes about its debt capital markets franchise. However, instead of mortgages his clients are generating receivables from trade receivables, catering equipment leases and consumer loans, for example.

"It's not securitisation in the strictest sense - that is, it's not funding through the use of [off-balance sheet] special purpose vehicles," said Perkins.

He said the way that these deals are structured means the borrower - that is the FIIG DCM client - commits some of its trade receivables or future income flows from its balance sheet to provide further protection to investors - a move that is well received by insto investors.

Perkins pointed, by way of example, to invoice discounter CML, which raised A$25 million this year from the sale of notes to FIIG's well-heeled client base. These were secured against trade receivables. Smaller companies tend to get penalised on ratings, yet CML's trade receivables are insured by a trade credit insurer with a double A- rating.

This is a good example of how mid-sized firms will find alternative ways to borrow if the banking sector is unable or unwilling to support them to the level that they are looking for.

CML's chief executive officer Daniel Riley said the fee structure on the bonds that were structured and distributed by FIIG recently was better than his firm had been able to achieve previously through their various bank facilities, and the slow speed of bank credit research was damaging to their much more nimble approval process.

In simple terms, the rate paid by CML's latest bond issue is a floating 5.4 per cent over the bank bill swap rate. At current rates, this equates to about a 7.5 per cent headline rate and maybe eight per cent per annum when amortised fees and other costs are taken into account.

However, CML found it very hard to secure its initial funding, beginning with a back to back invoice facility with Bank of Queensland.

"That meant that every invoice that we purchased from our finance clients had to be