Structured Commodity Trade Finance

75,00EUR

Commodity Trade Finance is a complex business. Apart from standard trade finance instruments the trade banker needs to be familiar with Letters of Indemnity (LOI's) , warehouse warrants, trust receipts and the like. The trader and bank alike needs to be familiar with foundations of Asset Based Lending, which is what we will look at in this module.

Structured and Commodity Trade Finance is a complex business.  All the trade finance tools we have learned about in earlier units are used in Structured and Commodity Trade Finance.

In this unit you will learn:

- The basics of Structured Trade Finance
- An introduction to Commodity Trade and its Financing
- The role of the Letters of Indemnity (LOI)
- The Risks associated with Letters of Indemnity.
- Foundations of Asset Based Lending in Trade Finance

Course Outline

1 STRUCTURED TRADE FINANCE

2 COMMODITY TRADE FINANCE

2.1 Commodities and Trade

2.2 What Commodities can be financed?

2.3 Commodity Trade Finance – The Players

2.4 Commodity Finance and Risk/Mitigation

3. LETTERS OF INDEMNITY

3.1 Letters of Indemnity

3.2 Letters of Indemnity – Other Purposes

3.3 Working with LOIs in favor of the Carrier

3.4 Things to consider when working with LOIs

4. COLLATERAL CONTROL FOR TRADE FINANCE

4.1 Collateral Control for Trade Financing Techniques

4.1.1 Repayment Seniority

4.1.2 Collateral Protection

4.2 Unsecured vs. Secured Lending

4.3 Establishing Collateral Values

4.3.1 Establishing Net Realizable Value ("NRV")

4.4 Accounts Receivable

4.5 A Correct Receivable

4.6 Inventory

4.7 Inventory Insurance

4.8 Advance Rates

4.8.1 Advance Rates for Inventory

4.9 Collateral Control

4.10 The Bill of Lading

Further Reading

1 – The Economics of Commodity Trading Firms

2 – Commodity Finance Market Report 2014

3 – Trade Finance Developments and Issues

4 – Commodities as Collateral

5 – Structured Financing Techniques – Oil and Gas

6 – Commodity Finance Fraud

7 – Commodity Trade and International Risk Sharing

Forum Assignment

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