Borrowing Base Agent

As Borrowing Base Agent, DRUM Advisory acts as a neutral intermediary between borrower and financier, ensuring that credit aligns with the value of eligible collateral throughtout the lifetime of the facility. 

We verify receivables and inventory data, adjust for risks like overdue accounts or obsolete stock, and confirm the accuracy of all the borrowing base certificates. 

With deep expertise in commodity operations and fraud prevention, our team audits submissions and validates the physical presence of pledged goods. 

DRUM Advisory pioneered this space by acting as agent in the world’s first non-bank borrowing base facility.

Role and Responsibilities

As the Borrowing Base Agent, DRUM Advisory:

Acts as a neutral intermediary between borrower and financier

Examines all Borrowing Base Certificates, Borrowing Base Reports, and supporting information

Ensures borrower’s calculations are accurate and confirms this to the finance parties

Monitors all transactions within the Borrowing Base to their completion, ensuring accuracy and completeness

How It's Done

DRUM Advisory has in collaboration with funds, traders, and law firms developed a robust operational framework for the Agent role:

Upon Recieving Each Borrowing Base Certificate, DRUM Advisory will:

  • Verify all formulas against the agreed template
  • Confirm all calculations are correct
  • Test the correctness of the borrower’s pricing quotes used to determine the relevant market values
  • Determine whether the data provided is sufficient to support the Borrowing Base and that it correlates with entries in the relevant Borrowing Base Certificate
  • Liaise with the borrower to seek clarification and further information

Throughout the Borrowing Base financing, DRUM Advisory will check:

  • Eligibility by testing each buyer, seller, receivable, and inventory item against approved criteria
  • Cash Collateral by checking bank statements to ascertain the correctness of the cash position stated in the Transaction Accounts
  • Market Value of Receivables and Inventory by confirming market value calculations are per the terms agreed in the Borrowing Base Agreement
  • Commodity Hedging Accounts by checking hedge arrangements and current hedging statements to confirm the balances
  • Sales Contracts by examining contracts used for the purchase of inventory, checking import letters of credit and cash cover provided by the borrower under import letter of credit

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