Euromoney Audit Training

In this 4 day course you will learn:

• Rationale underpinning commodity supply chains
• The competitive advantage traders seek
• Risks emanating from international trade contracts
• Documents of title
• Regulatory developments affecting Trade Finance
• Pre-Export & Prepayment Finance
• Warehouse receipts finance and collateral management arrangements
• Securitization of trade finance assets
• Insurance
• Price & market risk management
  

 

Day 1

Contracts and documentation

Financing trade in challenging markets

· Commodity trading – markets and players

· Evolution of the trader’s business model

· Organization of commodity supply chains and the business value generated

· Structured Trade Finance and the value chain

· Risk analysis of a commodity supply chain

Case study

Risks in international trade as they apply to emerging markets

· Political risk

· Performance and operational risks

· Credit and bank risks

· Price risk and the inability to hedge

· Illegality of contracts

Case study exercise
Key documentary considerations

· Documents of Title; title, negotiability and endorsements

· Incoterms 2010

· Charter-party contracts

· Obligations of shipper / charterer and vessel owner

· Loading and discharge of cargo

Day 2

Emerging Markets Finance

Regulatory considerations

· Implications of Basel Capital Accord on Supply Chain Finance

· Rationale for the ‘structured’ approach to trade finance

· Characteristics of good collateral

Case study

Risk considerations for pre-finance

· Pre-export finance

· Application of Green Clause credits

· Risks relating to grower / producer finance

· Ownership of the commodity / asset

· Licenses, export quotas, foreign currency controls

Case study

Pre-payment finance
Application of Red Clause credits
Limited recourse options; absence of obligation to reimburse upon failure to deliver
Difference between pre-financing and pre-payment

Case study exercise

Day 3

Financing goods in storage

Warehousing considerations

· 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

Day 4

Risk Management

Other structures

Tolling finance

- Performance and country risks

- Causes leading to non-delivery by processor

- Security interests of financier

- Insurance solutions

Securitization of receivables

Financing countertrade

· Types of other financing structures

· Compensation, Counter-purchase

· Switch

· Clearing currencies and escrow account

· Murabaha

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

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

• 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.

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.

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