Course Details
Course Outline
5 days course
What is Trade Finance?
- Benefits of trade finance to businesses and banks
- Introduction to the trade cycle
- Collections and international documentation
- Payment, acceptance and negotiation modes of funding
- A closer look at negotiation under new ICC 600 rules
- Deferred payment letters of credit
- Confirmations silent/straight and soft
- Red clause L/Cs their mechanics and risks
- The utilisation of non-operative clauses as a risk mitigation technique
- Deferred payment L/Cs in oil trading
- High risk countries and the red clause transferable bulk L/C
International Demand and Contract Guarantees / Bonds
- Scope and Application – an introduction (suretyship v. demand guarantee)
- Indemnities versus guarantees
- Different types - Bid, Performance, Advance payment, Warranty and Retention bonds
- Rules governing guarantees and bonds
- Legal jurisdiction and expiry date issues
- Value of using URDG 758 – ICC Rules for demand guarantees
The Essential Differences Between Guarantees and Standby L/Cs
- Guarantees in trade finance
- Case studies and examples of performance bonds, bid bonds, retention money guarantees and advanced payment guarantees
- The mechanics of standby contemporary issues
- Case study: Defining the products by example
- THE HYBRID: A practical case study reviewing the risks inherent in the conditional guarantee and standby being utilised as payment
- mechanisms
Forfaiting and Factoring
- Single receivable forfaiting market
- Mechanics of forfaiting
- The political risk reality of forfaiting
- Forfaiting deferred payment L/Cs
- Contemporary models
- Forfaiting and factoring compared
- Forfaiting interest calculations
- Jumbo L/C risk sharing, sales and distribution
- Structured single export
Import / Export Documentary Collections
- Principal parties – roles and responsibilities
- Benefits to importers and exporters of Documentary Collections
- Relationship between principal and bank(s)
- Role of banks (incl. correspondent banks/agency arrangements)
- Legal and practical issues re the duties of the banks involved in handling collections
- Conditions for release of documents
- Procedures for Protest of Bill of Exchange (B/E) and underlying risks
- Complexities of the ICC Uniform Rules for Collection (URC 522)
Structured Pre-export Finance
- The fundamental principles of "tolling" finance deals
- Case studies in securitisation and pre-export finance structures
- Timing and an introduction to option financing
