Programme Outline
- What is Structured Trade Finance (STF)
- Commodity
- Europeans traders
- Traders are usually thinly capitalised and highly geared
- Transactions have high value, high risk
- Bank financing commodity traders
- Weak balance sheet translate to high financing risk
- High value of goods suited as security
- End to end nature of transaction makes sense for self –liquating financing
- Ring fenced transaction with control and management of the goods, documents and cash flows.
- Banking Credit Facilities
- Traditional financing model
- Clean – financials track records business entity (at least 3 years) and manage credit facilities with financials conditions like gearing ratios and management accounts.
- Secured – on the basis of securitized assets i.e. cash, properties and/or shares pledge/mortgage on credit facilities basis
- Hybrid of clean and secured financing facilities
- Structured Trade Finance model
- Combined trade financing products – tailored bundle of import and export financing e.g. import loans and export LC (Letter of Credit) financing
- Control, securitize and manage transactions under financing – pay suppliers directly and export LC must be approved.
- Enabling self-liquidation – ensure sales proceeds be collected by the bank to repay the import financing.
- STF (Business Entity perspective)
- Risks mitigation - If Balance Sheet is weak and gearing is high, STF financing for bank to securitise and manage transactions as mitigation of risks.
- Bank requirements for STF financing Bank
- End to end information of the transactions – buyers, sellers, goods transported modes, insurance, quality assurance, shipping documents.
- Financing only pre-sold transactions
- Approved list of buyers/sellers, logistic operations, insurers, counterparty banks, countries of operation, Letter of Credit (LC)
- Control cash flow of the transactions – individual transactions or in bulk
- Various securitisation – cash margin, assignment of debtors, Standby LC
- Higher interest spread for higher risks and more fees for more handling.
- Do more business despite the weaker financials
- Types of STF - pre sold basis
- Export Documentary Credit / LC with/without financing with
- Import LC – Back to Back; transferable; loan packing credit (full or partial)
- Import Loans (pre and/or post shipment) to pay sellers
- Export Documentary Collection with financing
- Import Loan (pre and/or post shipment) to pay sellers
- Accounts Receivable Financing on bulk basis with
- Import loans (pre and/or post shipment) to pay sellers
- Collateral Management Agreement (CMA)
- Goods in custody of approved collateral manager
Training Methodology
Classroom lectures with interactive discussions about working principles and case studies
Closing Date for Registration
1 week before programme or until full enrolment.
Intended For
Middle management who manages trade transactions, operations, and financing.
Schedule & Fees
Testimonial
Funding
No funding Available!
Programme Facilitator(s)
Programme Outline
- What is Structured Trade Finance (STF)
- Commodity
- Europeans traders
- Traders are usually thinly capitalised and highly geared
- Transactions have high value, high risk
- Bank financing commodity traders
- Weak balance sheet translate to high financing risk
- High value of goods suited as security
- End to end nature of transaction makes sense for self –liquating financing
- Ring fenced transaction with control and management of the goods, documents and cash flows.
- Banking Credit Facilities
- Traditional financing model
- Clean – financials track records business entity (at least 3 years) and manage credit facilities with financials conditions like gearing ratios and management accounts.
- Secured – on the basis of securitized assets i.e. cash, properties and/or shares pledge/mortgage on credit facilities basis
- Hybrid of clean and secured financing facilities
- Structured Trade Finance model
- Combined trade financing products – tailored bundle of import and export financing e.g. import loans and export LC (Letter of Credit) financing
- Control, securitize and manage transactions under financing – pay suppliers directly and export LC must be approved.
- Enabling self-liquidation – ensure sales proceeds be collected by the bank to repay the import financing.
- STF (Business Entity perspective)
- Risks mitigation - If Balance Sheet is weak and gearing is high, STF financing for bank to securitise and manage transactions as mitigation of risks.
- Bank requirements for STF financing Bank
- End to end information of the transactions – buyers, sellers, goods transported modes, insurance, quality assurance, shipping documents.
- Financing only pre-sold transactions
- Approved list of buyers/sellers, logistic operations, insurers, counterparty banks, countries of operation, Letter of Credit (LC)
- Control cash flow of the transactions – individual transactions or in bulk
- Various securitisation – cash margin, assignment of debtors, Standby LC
- Higher interest spread for higher risks and more fees for more handling.
- Do more business despite the weaker financials
- Types of STF - pre sold basis
- Export Documentary Credit / LC with/without financing with
- Import LC – Back to Back; transferable; loan packing credit (full or partial)
- Import Loans (pre and/or post shipment) to pay sellers
- Export Documentary Collection with financing
- Import Loan (pre and/or post shipment) to pay sellers
- Accounts Receivable Financing on bulk basis with
- Import loans (pre and/or post shipment) to pay sellers
- Collateral Management Agreement (CMA)
- Goods in custody of approved collateral manager
Training Methodology
Classroom lectures with interactive discussions about working principles and case studies
Closing Date for Registration
1 week before programme or until full enrolment.
Intended For
Middle management who manages trade transactions, operations, and financing.
Programme Facilitator(s)
