How Greensill Capital (UK) financed supply chains and receivables

analysisGreensill Capital (UK) Limited (GCUK) financed trade receivables, the amounts that buyers owe for goods and services. In [2026] EWHC 639 (Ch), a judgment of 18 March 2026, the High Court described its business as extending credit at a discount to customers in return for the assignment of receivables owed by the customers' debtors (accounts receivable financing), and extending discounted credit under supply chain financing, that is, advances that let a customer pay unpaid invoices from its own suppliers. The Commercial Court in [2024] EWHC 3068 (Comm) likewise described GCUK's business as including supply chain financing of a customer's payables and accounts receivable financing in which GCUK purchased receivables. According to the joint administrators' statement of proposals, GCUK was the group's main trading entity: it arranged supply chain finance and other working capital financing, used bespoke IT platforms to buy working capital and supply chain receivables, and sold the receivables, or notes backed by them, generally within 24 hours to financial institutions, specialist funds and Greensill Bank AG. In direct assignments the receivables were sold outright; for note issues they were transferred to insolvency-remote special purpose vehicles, companies set up so that they are not affected by the insolvency of the originator, which issued notes secured on them. GCUK also offered accounts receivable financing, instalment payment agreements and purchases of portfolios of supplier irrevocable payment undertakings. ^{1 2 3}

analysisThe administrators' proposals, whose diagram the Treasury Committee reproduced in its report of 20 July 2021, set out the cycle of a transaction. A supplier invoiced its customer, the obligor (the party that owes the payment); GCUK agreed to pay the invoice to the supplier at a discount to its face value; receivables of buyers below investment grade were sold with the benefit of insurance; the assets were sold to investors by direct assignment or as notes backed by the receivables; and GCUK paid the supplier out of the sale proceeds. At maturity the obligor paid GCUK the face value and GCUK repaid the investors, the difference between the discounted price and the face value being profit shared between GCUK and the investor. Ten software items developed for or on behalf of GCUK are listed in a revised intellectual property assignment agreement filed on 22 October 2021 in the US bankruptcy case of Greensill Capital Inc. under Chapter 11 of the Bankruptcy Code (21-10561 (MEW), Southern District of New York), under which Greensill Capital Inc. was to assign them to GCUK: the Accounts Receivable Module, the Greensill Payments Engine, the New Core System that packaged assets into investor offers and placed them, the Greensill Trading Module for offer and acceptance, a Client File Converter, an Allocation Tool, a Decision Engine, Shared Services, Verdi and Greensill Finance SAP. The Decision Engine, a Python script, recommended which obligors' assets could be sold to which investor, for example Airbus assets to Greensill Bank or Credit Suisse, using current exposure and headroom under insurance, investor and concentration limits. ^{3 4 5}

analysisThe High Court in [2026] EWHC 639 (Ch) described GCUK as funded partly by advances from Greensill Bank AG, a German company that was another subsidiary of Greensill Capital Pty Limited, and partly by securitisation: the receivables and their related rights were assigned to a Luxembourg note-issuing securitisation vehicle, and the notes were bought by third-party investors, many of whom invested through Credit Suisse Virtuoso SICAV-SIF and its sub-fund managed by Credit Suisse Asset Management (Switzerland) AG. The Treasury Committee's report 'Lessons from Greensill Capital', published on 20 July 2021, records that the Bank of England described Greensill's funding model as 'complex' and as having 'non-standard features'. According to the report, Greensill, unlike most other UK providers, funded its operations mainly from outside investors: it issued secured commercial paper through a special purpose vehicle registered in Luxembourg, packaging invoices into notes bought by its investors, for example a fund managed by Credit Suisse, while others were bought by Greensill Bank, and its reliance on investor funding made it vulnerable to a contraction in that funding. Those descriptions and the assessment of vulnerability are the Bank of England's characterisations in written evidence as reported by the Committee, not findings of a court, and they concern Greensill as a group rather than GCUK alone. The report also quotes a paper Greensill shared with the Bank of England, in which Greensill described itself as the first to take a traditionally bank-only product and open it up to the capital markets. ^{1 2}

analysisTo issue securitised notes, GCUK entered into agreements with Hoffman S.à r.l., a Luxembourg private limited company, as note issuer: the company that issued notes to investors and to which GCUK assigned the underlying payment rights. According to the High Court in [2025] EWHC 2631 (Ch), GCUK, Hoffman and Citibank N.A., London Branch, as note trustee (the party holding the noteholders' rights on their behalf), signed a Master Assignment Agreement on 21 December 2017, an umbrella agreement setting the terms on which GCUK could sell and assign to Hoffman its rights in Payment Obligations and related Additional Rights, while Hoffman, as issuer, was party with Citibank to a Master Trust Deed originally dated 13 October 2017 and supplemented on 21 December 2017, which governed the issue of notes under the Hoffman Note Programme. The same judgment describes one programme made under these documents. In the Fairymead multi-obligor programme that financed the Katerra group, GCUK originated the notes to fund the obligations under the Participation Agreement and the Receivables Purchase Agreement; Greensill Limited granted GCUK security for its obligations by a Security Agreement dated 19 December 2019, and on the same day GCUK notified Hoffman of a 'PBB Product Schedule' made under the Master Assignment Agreement, whose product code PBB was used in Offer Files from at least 14 September 2020 and in each relevant Offer File for the Fairymead Notes. GLAS Trust Corporation Limited, a professional trustee company, was appointed note trustee for the Fairymead Notes on 28 February 2023, replacing Citibank, which had acted as note trustee since the first issue of those notes in December 2019; GLAS was the second claimant in that case. ³

analysisThe Financial Conduct Authority's letter of 4 May 2021 to the Treasury Committee described two fund ranges. Credit Suisse Asset Management operated four supply chain finance sub-funds through fund vehicles in Luxembourg and Liechtenstein, which were qualified-investor alternative investment funds not open to retail investors and were supervised, with their management companies, by the Luxembourg CSSF and the Liechtenstein FMA; portfolio management for all of them was performed by Credit Suisse Asset Management (Switzerland) AG under FINMA supervision, and the FCA-regulated CSAM Limited and Credit Suisse UK Limited marketed and distributed them to UK investors. Until mid-2018 the Swiss GAM AG Group operated sub-funds of its Absolute Return Bond Fund range, Luxembourg alternative investment funds supervised by the CSSF with portfolio management by the FCA-authorised GAM Investment Management Limited, which invested among other things in Greensill supply chain finance assets and included sub-funds named 'GAM Greensill Supply Chain Finance Funds'; on 2 March 2021 GAM announced the liquidation of the last remaining GAM Greensill Supply Chain Finance Fund, which then held $842m in assets. ⁴

analysisAccording to the same letter, the notes were placed by a GCUK subsidiary. Greensill Capital Securities Limited (GCSL), part of the GCUK group, arranged and distributed Greensill's loan notes to institutional investors, while the structuring of the notes and the provision of supply chain finance were carried out by GCUK. From 10 August 2017 GCSL was an appointed representative (a firm acting under the responsibility of an authorised principal) of the FCA-authorised Mirabella Advisers LLP, until Mirabella terminated that status on 5 March 2021; the FCA noted that originating a supply chain finance instrument is not a regulated activity. On 15 December 2025 the FCA announced that it had closed the investigation, opened on 4 May 2021, into Mirabella's oversight of GCSL as its appointed representative, having identified no breaches by Mirabella requiring further action. GCSL was not among the firms the FCA supervised under the Money Laundering Regulations, but GCUK, as an Annex 1 firm under those regulations, was required to ensure that its subsidiary applied the relevant anti-money-laundering policies, controls and procedures to the extent that it did business subject to the regulations. The FCA also stated that certain Greensill securities, whose structuring was carried out by GCUK, were classed as 'officially listed' because they were listed on multilateral trading facilities in the European Economic Area, which allowed them to be distributed to UK investors without being subject to the UK listing regime and its FCA scrutiny; it added that such venues might not have sought recognition as Recognised Overseas Investment Exchanges and cited the case as an example of regulatory arbitrage. ^{4 5}

analysisAlthough most originated assets left GCUK's balance sheet, GCUK kept part of the risk. In the strategic report for 2019 it stated that it originated assets mainly for distribution to third parties or other group companies, that default risk on certain of them was mitigated by credit insurance on which the company took a first loss, meaning that the first part of a loss fell on GCUK rather than on the insurer, and that it was therefore indirectly exposed to default risk on the originated assets although they were mostly not held on its balance sheet. Among its key risks it also listed concentration on certain customers, key employees and suppliers after significant revenue growth over the previous two years. Note 28 to the 2019 accounts states that GCUK used bankruptcy-remote structured entities, which it sponsored but did not consolidate, to distribute assets to investors: financial assets with a carrying amount of $38.4bn (2018: $28.0bn) were transferred to them during 2019 at a total discount of $495m (2018: $290m), and GCUK covered their administrative expenses of $4,084,000 (2018: $4,965,000). GCUK derecognised the transferred assets (removed them from its balance sheet) but sometimes kept a small interest through first losses under insurance policies, credit default swaps or loss-absorption mechanisms required by the end investors, and kept similar first losses on assets transferred directly to Greensill Bank AG. The note put the maximum exposure to loss from the first losses under the insurance policies at $1,036m (2018: $428m) and the expected credit losses on that exposure at $59.3m (2018: $16.6m). ¹

analysisIn [2024] EWHC 3068 (Comm), a judgment of 3 December 2024, the Commercial Court described Greensill's trade credit insurance, which protects against buyers failing to pay, as a parallel policy structure: for each insured risk a 'master' policy named GCUK as insured and a 'parallel' policy named Greensill Bank AG. GCUK acted as servicer for the bank, originating the financings, arranging and paying for the cover and making disclosures and representations to insurers; it paid the substantive premium, the bank's policy requiring only a nominal $1, and was responsible for paying back to the insurer a sum equal to any deductible on a claim, the bank's policy having no deductible. The service level agreements between GCUK and Greensill Bank AG, quoted in the same judgment, described their working relationship as a long-term business partnership concerned mainly with the bank's refinancing of the supply chain finance business that GCUK acquired with commercial customers, with GCUK providing 'trust holdings' to the bank, and stated an 'at-arms-length principle' under which the two could operate as separate businesses that 'are not a group of companies'. ²

analysisFrom 2014 Marsh Ltd provided insurance broking and other services to GCUK and Greensill Bank AG under a series of Letters of Engagement addressed to GCUK and signed by a GCUK officer, and most of Marsh's communications and instructions on both the master and the parallel policies were with GCUK, according to the Commercial Court in [2024] EWHC 3068 (Comm); the incorporated Terms of Engagement capped Marsh's liability for broking services at £7.5 million, later raised to £10 million, and gave the English courts exclusive jurisdiction over disputes. An 'insurance disclosure pack' that GCUK gave Marsh in September 2020, quoted in the same judgment, described GCUK as predominantly the originator of the assets to be insured and the party holding the relationship with Marsh and the insurers, and described Greensill Bank AG, together with other parties taking the benefit of the bank's insurances as loss payees, as an investor provided with the insurance that GCUK arranged through Marsh. For the Credit Suisse funds, Credit Suisse Asset Management's investor Q&A of 15 December 2022 states that insurance for the notes was generally bought as described in the fund documents, with the fund named as loss payee (the party to whom claims are paid) on policies under which Greensill entities such as Greensill Bank AG were the insured. The insurance was meant to cover both purchases of existing receivables and suppliers' undertakings relating to future services or deliveries, and claims had to be submitted by the policyholder, Greensill Bank. At 26 February 2021 insurance had been bought for all obligors and note programmes of the Credit Suisse (Lux) Supply Chain Finance Fund, for more than one-third of the notes of the Credit Suisse Nova (Lux) Supply Chain Finance High Income Fund and, in the two investment grade funds, for obligors rated A- or lower. ^{2 3}

analysisFigures that Lex Greensill gave the Treasury Committee, reproduced in its report of 20 July 2021, put Greensill's total asset flow at $27,263m in 2018, $143,039m in 2019 and $142,937m in 2020, of which future receivables were $470m (2%), $10,615m (7%) and $15,401m (11%). Greensill Bank bought 6%, 7% and 11% of the total flow in those years, but 0% of the future receivables in 2018 and 73% in both 2019 and 2020; the Committee noted that as future receivables grew, Greensill switched from selling them mainly to other investors to selling them mainly to Greensill Bank. The figures were supplied by Lex Greensill, cover Greensill as a whole rather than GCUK alone, and are not independently checked in the record; the copy of Lex Greensill's written evidence shows 87% instead of the report's 89% for the 2020 share of the total flow sold to other investors, the report's figure being consistent with the 11% sold to Greensill Bank. In that written evidence, dated 22 June 2021, Lex Greensill said that the term 'prospective receivables', which Sanjeev Gupta had used in a letter of 7 April 2021 for Greensill's arrangements with its clients, including some GFG Alliance companies, was unknown to Greensill Capital and appeared in no client or investor documentation, and that Greensill Capital offered 'future receivables' programmes whose nature was fully disclosed to investors. That account was not tested in any proceedings in the record. The Committee reported that Mr Greensill declined to explain precisely what 'future receivables' were or how they differed from Mr Gupta's description, said it was 'left in some doubt' about how they operated, and considered that prospective receivables as Mr Gupta described them would appear to be a significantly riskier form of lending than traditional supply chain finance. ^{1 2}

analysisGreensill companies also took roles in financing programmes run by others. By a Fourth Omnibus Amendment dated 2 January 2018, filed as Exhibit 10.31 with the US Securities and Exchange Commission, Greensill Capital Inc. assigned to its affiliate GCUK its role as Purchaser Agent under the Amended and Restated Receivables Purchase Agreement of 22 November 2016, a receivables programme in which Wise Alloys Funding II LLC sold receivables, serviced by Wise Alloys LLC, to Hitachi Capital America Corp. and Intesa Sanpaolo S.p.A., New York Branch, with Constellium Holdco II B.V. as parent. The amendment raised the Facility Amount under the related Receivables Sale Agreement from USD 325,000,000 to USD 375,000,000 and Intesa's commitment from $125,000,000 to $175,000,000, extended the purchase termination date from 24 January 2018 to 24 January 2020, and was signed for both Greensill companies by Jonathan Lane as General Counsel. The Treasury Committee's report of 20 July 2021 states that Greensill provided the financing for the Pharmacy Early Payment Scheme, which let pharmacies receive funding earlier than under the standard government payment schedule. The Chancellor's evidence quoted in the report says the scheme was introduced by the Department of Health and Social Care in 2013 and delivered by Citibank, and that in 2018 Taulia replaced Citibank as provider under a contract with the NHS Business Services Authority made through a Crown Commercial Service framework and contracted Greensill to provide the financing, HM Treasury having no record of involvement in that process. ^{1 2}