Armstrong World Industries has established a $100 million receivables securitization program.

Armstrong World Industries (Armstrong) has established a $100 million receivables securitization program. As part of the program, Armstrong, along with subsidiary Armstrong Hardwood Flooring Co., will sell their U.S. receivables to Armstrong Receivables Company LLC ("ARCL"), a Delaware-based special purpose entity. ARCL will in turn initially finance the receivables through Credit Agricole Corporate and Investment Bank, with a maximum commitment of $100 million.

In addition to the financing of receivables, Credit Agricole may also issue letters of credit at the request of ARCL. The purchase and letter of credit commitments under the program expire in December 2013, subject to possible extensions.

According to financial website www.securitization.net, the securitization of receivables is a financial instrument designed to raise capital. It involves selling receivables to a special purpose vehicle in return for cash; the special purpose vehicle finances the purchase by turning the receivables into securities which are issued on the market.