Course dates
Course Overview
'Structured Trade and Commodity Finance' is designed for professionals interested in risk management and financing of physical flows of commodities. The course is intermediate level.
You should 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.
Summary of course content
- 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
Methodology
Use of a mixture of presentations and many practical examples so you can gain a comprehensive understanding of structured trade and commodity finance
- Practical approach to teaching by using case studies and real life illustrations to emphasise the key
learning points
- You will have the opportunity to apply the skills acquired during the programme in practical sessions and group exercises
Who Should Attend?
Designed for all those who wish to learn how to analyse and structure trade and commodity finance indepth.
We highly recommend the following market professionals attend:
- Trade Finance & Treasury professionals
- Commercial and Merchant Bankers
- International Traders
- Risk Managers
Supporting publication
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
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 study
Case study
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 post-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 finance
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 receiptsbacked securities
Case study
Collateral management
- Collateral Management Agreement (CMA)
- Liability of collateral managers
- Negotiating CMA documents
- CMA components
- 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
Day 4: Alternative financing
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
- 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 vs. 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
InterContinental Grand Stanford Hotel, Hong Kong, Hong Kong
This programme takes place on a non-residential basis at the InterContinental Grand Stanford Hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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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
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.
Course dates