Product Description

Structured Trade Finance is a type of debt finance involving a variety of security instruments, and which is mostly used for the financing of commodities.

Product Features

The use of different security instruments all along the underlying trade cycle and covering the whole cross-border itinerary of the underlying commodities (including their possible refining, smelting crushing, or other transformation) allows customers to obtain financing all along the supply chain they control. Structured Trade Finance can involve all or part of the following financing stages: advance payment, Pre-export structures, warehouse financing, transit and port financing, B/L financing and financing of inventories at destination followed by receivables financing (or integration of receivables in a factoring program), with, for each step, appropriate security instrument, provision of information and monitoring. It provides lenders access and lien on underlying movable (or sometimes unmovable) assets and involves usually, like transactional trade finance, a self-liquidating structure where repayment comes directly from the proceeds of the sales of underlying commodities.

The inherent complexity of structured trade finance, with significant implementation costs (in particular legal costs of security-taking in several jurisdictions) require facilities of a significant size which, therefore are often syndicated in the international bank market.