International Trade Finance

A 4-day course, covering all aspects of international trade and commodity finance from a practical viewpoint. Heavy emphasis is placed upon risk assessment and problem solving techniques, through a clear understanding of a customer’s trade cycle. Whilst each of the banking products is dealt with in detail, great attention is paid to the effective and appropriate use of these mechanisms in meeting the customer’s needs, with a view to generating remunerative and controllable business for the bank. The course is highly interactive and centers around the use of a variety of case studies, mostly based upon live files. This programme is suitable for corporate relationship managers, staff within Credit/Risk Management functions, relationship managers within Financial Institutions Dept, and senior Operations personnel. By the end of this 4 day course participants should be able to: Use trade finance 'jargon' with some comfort Understand the mechanics of the most commonly used instruments Identify the key areas of risk for the bank Provide meaningful solutions for trade related issues Set up structured facilities that provide monitoring and control capabilities Who Should Attend? Trade Financiers Project Financiers Finance Directors Corporate relationship managers Staff within Credit/Risk Management functions Relationship managers within Financial Institutions Dept Senior Operations personnel Auditors
DAY 1 Critical Issues in Trade Finance Today Trade Finance – an alternative to balance sheet lending The impact of Incoterms in the trading environment Interactive Case Study: Trade related contracts Understanding and Using Bills Of Exchange / Promissory Notes Bill discounting – accelerating the cashflow – the value of avalised bills International trade documentation – focus on documents of title Payment terms – appreciating the customer’s risk awareness Mapping out the risk ladder Documentary Collections – Understanding the Mechanics The role and application of URC 522 Effective use of collections for short term finance Case Study: Risk and control features in documentary collections DAY 2 Documentary Credits Basic operations and risk appreciation Irrevocable, unconfirmed and confirmed credits Sight, term, negotiation and deferred payment credits The role and application of UCP 600 Case Study: Risk assessment in a documentary credit facility Discounting and advancing funds Silent confirmations Syndicated credits Revolving credits Controlling Credit Exposure in Documentary Credits Formulating a limit Case Study: The effective use of time lines Back-to-Back and Transferable Credits Back to back credits – risk and control features Transferable LCs – the impact of UCP 600 Case Study: Structuring a solution for a middle man DAY 3 Supporting Export Contracts – The Use of Bonds, Guarantees and Standby Credits Bid, performance advance payment and retention bonds Legal jurisdiction and expiry date issues Opportunity spotting The use of ISP 98 Case Study: Interactive interviews with an exporter The Forfaiting Market Styles and structures Discounting mechanisms The secondary bill market The value of without recourse financing The new ICC regulations Factoring and Invoice Discounting Financing open account transactions The role of factoring companies Invoice discounting versus full service factoring Short Term Credit Insurance Assessing the extent of cover Risk appreciation Financing with credit insurance support Adherence to policy terms and conditions Case Study: Short term credit examples DAY 4 Commodity Finance Overview Assessing the value of collateral and receivables Looking beyond the balance sheet Available documentation – taking and retaining title Pre-Export Finance Risks relating to grower/producer finance Assessing the country risk Understanding the trade flows The use of red and green clause credits Case Study: Evaluation of a pre-export finance proposition Financing the Commodity Trader Appreciating supply and delivery routes Assessing the quality of the trade Control in a warehousing environment Tolling transactions The use of Letters of Indemnity The role of Collateral Managers Case Study: Interactive assessment of a commodity trader’s financing needs Countertrade Techniques Understanding structural differences The effective use of escrow accounts The potential role for the banker Assessing the viability of a transaction Case Study: Structuring a counterpurchase deal Summary of course