Structured Trade Finance
STRUCTURED TRADE FINANCE
WORKFLOW FOR TRADE FINANCE HOUSE
Receipt of Request from potential client
Deal Structuring
Receive written request for Structured Finance product from a customer.
Discuss the Business Proposal
Authenticate the request to ascertain that it is genuine.
Where applicable, check supporting documentation e.g. Audited accounts, Financial projections, proposed security, etc.
Determine suitability of the client to the proposed solution.
Assess all variables of the proposal e.g. Security, Transaction flow, and client’s ability to perform.
If viable, prepare Term Sheet, if not viable decline the proposal.
Trade Finance House draws up agreements on :-
Transaction Flows e.g. Enlisting of collateral managers and description of the collateral management process (where applicable).
Proposed Securities e.g. Commodity / Stock, Insurance, Credit Risk Insurance, etc.
Required Documentation to carry out transactions e.g. The Request, supporting documentation (i.e. Bills of Lading, Invoices, Promissory Notes, Bills of Exchange, Stock Report, etc.)
Outline tenors for liquidation of transactions e.g. 90days, 120days, 180 (for agricultural commodities, oil etc)
Provide indicative pricing for the transaction e.g. is it LIBOR -based, Base-Lending in LCY,
Specific to the instrument – e.g. Import Letter of Credit or Guarantees or Avalised Bills.
Identify Risks and mitigants. i.e. Performance Risk, Transactional Risk covering the liquidation, commodity pricing, procurement, etc.)
Agreement of Term Sheet
Discuss the contents of the Term Sheet between the stakeholders (BDM, Customer, CRM).
If Agreeable, proceed to issue the Final Term Sheet for execution, else decline the customer’s proposal.
NOTE:
Disagreements may arise due to: Client’s unwillingness to relinquish control of commodity, prohibitive cost of collateral management, unwillingness to provide additional security, issues around pricing – where none of the stakeholders is willing
WORKFLOW FOR TRADE FINANCE HOUSE
Receipt of Request from potential client
Deal Structuring
Receive written request for Structured Finance product from a customer.
Discuss the Business Proposal
Authenticate the request to ascertain that it is genuine.
Where applicable, check supporting documentation e.g. Audited accounts, Financial projections, proposed security, etc.
Determine suitability of the client to the proposed solution.
Assess all variables of the proposal e.g. Security, Transaction flow, and client’s ability to perform.
If viable, prepare Term Sheet, if not viable decline the proposal.
Trade Finance House draws up agreements on :-
Transaction Flows e.g. Enlisting of collateral managers and description of the collateral management process (where applicable).
Proposed Securities e.g. Commodity / Stock, Insurance, Credit Risk Insurance, etc.
Required Documentation to carry out transactions e.g. The Request, supporting documentation (i.e. Bills of Lading, Invoices, Promissory Notes, Bills of Exchange, Stock Report, etc.)
Outline tenors for liquidation of transactions e.g. 90days, 120days, 180 (for agricultural commodities, oil etc)
Provide indicative pricing for the transaction e.g. is it LIBOR -based, Base-Lending in LCY,
Specific to the instrument – e.g. Import Letter of Credit or Guarantees or Avalised Bills.
Identify Risks and mitigants. i.e. Performance Risk, Transactional Risk covering the liquidation, commodity pricing, procurement, etc.)
Agreement of Term Sheet
Discuss the contents of the Term Sheet between the stakeholders (BDM, Customer, CRM).
If Agreeable, proceed to issue the Final Term Sheet for execution, else decline the customer’s proposal.
NOTE:
Disagreements may arise due to: Client’s unwillingness to relinquish control of commodity, prohibitive cost of collateral management, unwillingness to provide additional security, issues around pricing – where none of the stakeholders is willing