Euromoney Audit Training

A comprehensive, practical, skills-based approach to structured trade and commodity finance. On completion of the course you will gain:

• A comprehensive coverage of the structured approach to trade finance
• A focus on considerations relating to emerging market trade finance
• A view of risk and commercial priorities from the perspective of a borrower as well as that of a lender
• Highly practical exposure to structured commodity trade finance
• Understanding of importance of documents of title and underlying transportation arrangements
• Appreciation for role of Insurance products in risk mitigation
• A view of the application of exchange-traded instruments for price risk management
• Acquire a global view of Structured Trade Finance practices in the commodities space

Methodology

This course uses a mixture of presentations and many practical examples so you gain a comprehensive understanding of structured trade and commodity finance.

Course objectives

This course is designed to appeal to professionals interested in risk management and financing of physical flows of commodities. The course will be delivered at an intermediate level. Participants are expected to be knowledgeable about trade finance products, letters of credit and international trading practices. Coverage will tilt towards financing of emerging markets business. Case studies and real-life illustrations will be used frequently to emphasise learning points.

Who should attend?

Designed for all those who wish to learn how to analyse and structure trade and commodity finance in-depth. We highly recommend the following market professionals attend:

• Trade Finance and Treasury professionals
• Commercial and Merchant Bankers
• International Traders
• Risk Managers

Day 1

Emerging markets

Risks in international trade as they apply to emerging markets

• Political risk
• Performance and operational risks
• Credit and bank risks
• Price risk
• Illegality of contracts
• Document of title
• Case study

Financing trade in challenging markets

• Commodity trading – markets and players
• Evolution of the trader’s business model
• Structured trade finance and the value chain
• Risk analysis of a commodity finance transaction
• Case studies

Other considerations

• Implications of Basel Capital Accord
• Rationale for the ‘structured’ approach to trade finance
• Characteristics of good collateral

Day 2

Contracts, structures and documentation

Key documentation considerations

• Transport documents
• Documents representing goods
• Title, negotiability and endorsements
• Documents of Title
• Incoterms
• Charter-party contracts
• Obligations of shipper / charterer and vessel owner
• Loading and discharge of cargo
• Case study

Risk considerations for pre–finance

• Pre-export
• Application of Green Clause credits
• Risks relating to grower / producer finance
• Valuing producer risk
• Ownership of the commodity / asset
• Licenses, export quotas, foreign currency controls
• Case study

Risk considerations for pre-finance

• Pre-payment
• Application of Red Clause credits
• Limited recourse
• Absence of obligation to reimburse upon failure to deliver
• Difference between pre-financing and pre-payment
• Case study

Day 3

Structured trade finance applications in warehousing

Warehousing considerations

• What is an asset-backed structure?
• The business case for warehousing
• Problems with pledges over inventory stocks, physical dispossession
• Legal infrastructure required to support warehouse receipt finance
• Is a WH receipt a title document or only evidence of receipt?
• Case study

Financing issues with warehousing

• Warehouse receipts finance
• WRF structures
• Raising finance against warehouse receipts-backed securities
• Case study

Collateral management

• Collateral Management Agreement (CMA)
• Liability of collateral managers
• Negotiating CMA documents
• CMA components
• Review of a CM Agreement
• Mishaps in collateral management arrangements
• Case study
• Tolling finance
• Performance and country risks
• Causes leading to non-delivery by processor
• Security interests of financier
• Insurance solutions
• Case study
  

Day 4

Alternative financing structures and risk mitigation

Examples of Islamic finance structures for commodity flows

• Types of other financing structures
• Other financing structures
• Switch
• Clearing currencies and escrow account
• Receivables-backed finance
• Case study

Insurance issues

• Principles of marine insurance
• ICC A/B/C, contingency cover
• Security over insurances (assignment vs. loss payee)
• Why do banks need political risk insurance cover?
• Contract frustration
• Confiscation of assets
• Credit insurance
• Covering risk of default in payment by buyer
• Legal traps
• Breach of warranty
• Failure to act as if you were uninsured

Price risks

• Price risk management in commodity trade
• Price discovery exchange
• Traded versus OTC
• Link between cash and futures markets
• Understanding contracts to hedge
• Benefits / advantages for the customer and the bank
• Case study

Course summary and close

• Srinath Keshavan

  Srinath Keshavan is a Trade Finance practitioner with 30 years experience in the Asia-Pacific region. His experience encompasses both commercial and financial aspects of International Trade. He worked for many years in Bills, Banking Operations and Credit & Marketing Departments of an international bank in Hong Kong.
  
  Since 1991, Mr. Keshavan has been associated with commodity-trading firms in Singapore as Head of Trade Finance and Risk Management. His expertise relates to structuring financial arrangements for international trade transactions, raising credit lines and managing banking relationships.
  
  Mr. Keshavan heads a trade finance consultancy in Singapore. His seminars provide clarity over technical concepts and offer participants the opportunity to reinforce their own understanding of the subject through practical illustrations.

  Courses run by this instructor

  • Structured Trade and Commodity Finance - Paris
  • Structured Trade and Commodity Finance - Amsterdam

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

Emerging Market Risk Analysis - Paris

4-7 Jun 2012 (Paris, France)
19-22 Nov 2012 (Paris, France)

A 4-day expert emerging market risk analysis training course designed to equip delegates with the skills to analyse and mitigate country risk. Including techniques for the analysis of financial institutions in emerging markets.

Credit and Political Risk Insurance - Amsterdam

18-20 Sep 2012 (Amsterdam, Netherlands)

A 3-day intensive training course featuring the uses, benefits, and advantages of credit and political risk insurance. The course places great reliance on practical work including case studies, which will point out the importance of detail in the whole area of credit experience.

Structured Trade and Commodity Finance - Amsterdam

18-21 Jun 2012 (Amsterdam, Netherlands)

A 4-day, comprehensive and practical, skills-based approach to structured trade and commodity finance.

Structured Trade and Commodity Finance - Paris

15-18 Oct 2012 (Paris, France)

A 4-day, comprehensive and practical, skills-based approach to structured trade and commodity finance.

Commodity Trading - Amsterdam

9-13 Jul 2012 (Amsterdam, Netherlands)
12-16 Nov 2012 (Amsterdam, Netherlands)

The course is designed to provide participants with an introduction to commodity products, pricing, trading, market participants and fundamentals such as production and consumption.