Advanced Trade Finance

International Trade has always been the engine for global economic growth and is playing an ever important role, as new powerful economies emerge, shifting the balance of trade influence from the traditional wealth creators to new regions and economies.

This advanced course will provide delegates who are already familiar with or are working in a trade finance environment, with an insight into the more complex trade finance techniques that are becoming more common.

Much of complex International Trade is either misunderstood or undervalued mainly because the terminology and practices seem difficult and confusing to master. This course will completely de-bunk this misconception and will leave delegates with a clear and working knowledge of how trade is undertaken at its most complex level.

It will show what actually happens and just how profitable this section of a bank’s business can be. It will also suggest methods of handling problems when things go wrong.

At the end, all delegates will have a clear and full understanding of exactly how complex trade takes place across the globe at an advanced level.

A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.

Course Content:

Day One:

The Market
 Historical evolution and current developments in the market place
 Trade Finance versus ‘balance sheet lending’
 Understanding and controlling the cash flow
 Typical users of Trade Finance products and services

Risk – The Critical Issues
 Understanding, identifying and managing risk
 Sovereign, Political / Country risk
 Institutional risk / Bank risk
 Corporate and other critical risks
 Importer and Exporter’s risk
 Risk mitigation, management and transfer

Review of Key Products
 How does the customer analyse his risk?
 Which products does he use and why?
 Cash in Advance
 Open Account
 Collections – Outward & Inward / Clean & Documentary
 Letters of Credit (covered below)
 Risks and opportunities
 Control possibilities

Supply Chain Management & Finance
 The origins of SCM
 Understanding the issues in SCM – “the tug of war” between supplier & buyer
 Identifying Market Opportunities
 Bringing about a “balance” between parties for effective processing
 Understanding about movement of ‘information’ ,’goods’ and ‘cash’
 Supply Chain Finance – not just a new opportunity but an essential element for sustainable business
 Review the risk aspects of SCF



Letters of Credit (L/Cs) - Advanced Mechanisms

The mechanics and use of:
 Back to Back L/C structures
 Transferable L/Cs
 Revolving L/Cs

Pre-Export Finance
 The effective use of red and green clause letters of credit
 Looking at the big picture
 Understanding the purpose of borrowing
 Country risk issues
 The reality of title and control

Controlling Credit Exposure – Formulating a Limit
 Understanding and explaining the trade cycle
 The use of time lines
 Assessing and appreciating funding gaps

Structured Trade Finance Situations (apart from Case Studies)
 Analysis of 2-3 examples based on above situations

Day Two:

Structuring Finance for the Trader

Facility Management:
 Analysing the trade flows
 Assessing facility size and structure
 Specific lending with identifiable maturity dates
 Appreciating and controlling sources of repayment

Effective Use of Collections for Short-Term Finance
 Using collections as financing opportunities
 Identifying and mitigating risks
 Maintaining control

Supporting the Trader
 Using the goods as collateral
 Assessing the value of goods
 The value of pledges and trust receipts
 The need for structured lending

Warehousing of Goods
 Warehouse location
 Management assessment
 Legal frameworks
 Obtaining and retaining title and control
 Risks and responsibilities of Collateral Managers
 Cost versus control

International Demand and Contract Guarantees / Bonds
 Scope and Application – an introduction
 Different types - Bid, Performance, Advance payment and Retention bonds
 Rules governing guarantees and bonds
 Legal jurisdiction and expiry date issues
 Opportunity spotting
 Standby L/C’s (SBLCs)

Receivables Financing
 Mechanics of Securitisation
 Mechanics of Factoring and Invoice Discounting
 Forfaiting – an important adjunct to the TF mechanism
 Role of Credit Insurance
 Nightmare scenarios


The Commodity Sector and its Players
 History and origins of the commodity industry
 Understanding the nature of ’commodities’
 Analysing the players – growers / producers; traders and end-users
 Financing of commodities
 Looking beyond the balance sheet
 Available documentation – taking and retaining title
 Commodity futures, options and derivatives
 Hedging – a critical process in commodity finance
 Role and function of the exchanges

Countertrade
 Overview – when to use
 Pitfalls and complications
 Possible structures and Time management

Syndications
 When to syndicate
 Lead or participant role
 Impact of quasi governmental agencies
 Risk/reward analysis

Structured Trade Finance Situations (apart from Case Studies)
 Analysis of 2-3 examples based on above situations

Course Conclusion and Review / Feedback

Delivery:	Classroom
Regions:	London
Category:	Advanced Corporate Finance