Comprehensive course analysis
Who should attend
Attendees are expected to be equipped with prior knowledge about mechanisms relating to Open Account, Letters of Credit, Bank Guarantees and Documentary Collections.
For those less familiar with these topics, pre-course reading material will be provided.
About the course
The Structured Trade & Commodity Finance course will provide you with a comprehensive view of international trade and commodities, with a particular focus on the interplay between trade finance instruments and supply chains as they apply to the commodities business.
This intermediate-level, four-day course examines various trade finance product concepts and their application to supply chains and financing structures typically used to facilitate commodity flows. By the end of the course, you will know how to apply a risk-sensitive approach to commodities trade financing and financing agreements.
- International trade risks in emerging markets
- Financing trade in challenging markets
- Pre-finance – what can go wrong?
- Payables-centric solutions
- Warehouse/Inventory Finance
- Receivables-centric solutions
- Risks in Commodity Trade contracts
- INCOTERMS & Transport Documents
- Marine Cargo Insurance
- Commodity Price Hedging
This course combines practical lectures and numerous case studies to ensure the learning experience is highly practical and relevant.
Session 1 – Risk and business in the commodities world
- A discussion on Risk
- Distinguishing Trade Finance from other forms of lending to businesses
- Commodity trading – markets and players
- Evolution of the trader’s business model, asset heavy or otherwise
Reading material: Risks in international trade
Session 2 – What does ‘structured’ mean?
- ‘Plain vanilla’ trade finance versus Structured Trade Finance
- Structuring a commodity finance transaction
- Credit risk-centric/Asset-backed/Performance risk centric rationales
- Collaterals in a structured trade finance transaction
Reading material: What do we need to understand about Basel Capital Accord – latest version?
Session 3 – Group case exercise & presentation
Session 4 & Session 5 – Pre-finance
Pre-shipment finance and pre-finance Pre-export finance to grower/producer Pre-payment finance through the Buyer; limited recourse feature Processing finance * Production and delivery conditions determining contract outcomes, insurances * 'Push’ factor for success of pre-finance * What can go wrong? * Ownership of the commodity asset * Licenses, export quotas. foreign currency controls * Performance and country risks * Security interests of financier
Reading material: Notes on Pre-finance
Session 6 – Group case exercise & presentation
Session 7 – Inventory & Warehouse Receipts Finance
- The business case for warehousing
- Use of a bonded warehouse
- Separating warehouse finance from warehouse receipts finance
- Problems with pledges over inventory stocks, physical dispossession
- Nature of a warehouse receipt; is it a document of title or only evidence of receipt?
- Legal and regulatory infrastructure required to support warehouse receipt finance
- Repo finance against commodities traded in a liquid, well-ordered derivative market
Reading material: Warehouse financing methods
Session 8 – Inventory finance
Borrowing-base finance Stock Monitoring Arrangement Collateral Management Arrangement * Review of a collateral management agreement (CMA) * Liability of a collateral manager
Reading material: Perfecting security and collateral interests
Session 9 – Group case exercise & presentation
Session 10 - Transport documents
- Incoterms 2020
- Flag of vessel; avoiding sanctions
- Liner & Chartered vessels
- Obligations of shipper/charterer and vessel owner
- Loading and discharge of cargo
- Documents representing goods
- Documents of Title; title, negotiability and endorsements
Reading material: Legal significance of a document of title
Session 11 – Insurances used in Structured Trade Finance
- Marine Cargo Insurance
- Principles of marine insurance
- ICC A/B/C, seller’s risk cover
- Security over insurances (assignment vs. loss payee)
Reading material: Marine Cargo Insurance
Political and Credit Risk Insurances * Why do banks need political risk insurance cover? * Contract frustration * Confiscation of assets * Covering risk of default in payment by buyer
Reading material: Trade Credit Insurance Reading material: Commodity price risk management
Session 12 – Mishaps in Commodity Finance
Srinath Keshavan is a seasoned practitioner of trade finance. He is empanelled with a global bank to deliver training in Financial Crime Compliance related to Anti-Money Laundering & Sanctions Evasion Risk. He is also a long-standing presenter of training programmes for Euromoney and World Ba...
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We are happy to help you find a suitable online alternative.