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 co-insurance)
- Only covers against the risks of Chapters 7 & 11 bankruptcy (does not cover for protracted default)
- It cannot be canceled 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
- More expensive - 0.25% - 2% of the face amount per month
- Often available when accounts receivable insurance is not
- No deductible and no reduction for co-insurance
- 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