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EuroFinance

Trade Finance for Treasurers

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Next dates

May 20—21
2 days
London, United Kingdom
EUR 2514 ≈USD 2804
EUR 1257 per day

Description

Today’s global business climate has introduced new complexities, triggered heightened risks associated with international trade and placed increasing pressure on credit availability. As a result, international trade now requires an enhanced focus on understanding and mitigating risks and an ability to quickly access cost effective financing when and where it’s needed. This challenge is driving many Corporate Treasurers to seek specialized expertise from trusted advisors, identify new and reliable sources of funding and automate processes to deliver additional efficiencies.

This intensive two-day program introduces the concepts, terminology and instruments associated with international trade and examines the roles of banks and other key players, including the emerging fintech providers. You will leave the program with a solid understanding of the key elements required for successful international trade as well as the opportunities available to unlock value from supply chains.

Learning objectives

  • Clarity on the terminology and processes of Trade and Supply Chain solutions
  • Understanding the role of Trade Instruments in Risk Mitigation and Financing
  • Identifying opportunities for unlocking working capital through Trade Finance

Tutors and teaching methods

EuroFinance tutors are chosen for their up-to-the-minute knowledge and expertise. Every learning point is powerfully reinforced by case studies, interactive exercises and role-plays so you can apply your newly acquired knowledge as soon as you return to the office. You will be required to complete a questionnaire prior to the course to enable you to define your objectives before the start of each module. This will allow each tutor to tailor the programme accordingly and ensure you walk away with the information you came to learn.

Course Agenda

*Day 1 *

Introductions and Course Objectives Principles of International Trade

  • Understanding International Trade
  • Why trade is important for Corporate Treasurers
  • Determining risk mitigation and financing opportunities in international trade
  • The role of banks in trade (risk mitigation, financing and transaction processing)
  • Understanding terms of trade
  • Concepts of ‘title’ and ‘recourse’
  • Understanding Incoterms 2010
  • Typical trade documentation
  • Overview of Trade Instruments

International trade instruments – Letters of Credit

  • Letter of Credit – Objectives
  • Role play to illustrate principles of an LC
  • How an LC can help mitigate risks
  • Roles of banks in an LC
  • Freely negotiable or restricted LCs
  • Discrepancies
  • Roles of Advising, Negotiating and Accepting banks
  • Confirmation of LCs
  • Importance of UCP600
  • Case study to illustrate key points

International trade instruments – Bills of Exchange

  • Uses of Bills of Exchange
  • Endorsement and assignment
  • Accepted drafts and bankers acceptances
  • Discounting Bills
  • Calculating discounts – Exercise

International trade instruments – Documentary Collections

  • Documentary Collections – Objectives and definition
  • Role play to illustrate principles of Doc Collection
  • Clean collections
  • Risks to parties involved
  • Advances under a documentary collection for financing
  • Comparison of LC and Doc Collection

International trade instruments – BPO

  • How BPOs work
  • Comparison with letter of credit
  • XML documents to support BPO
  • Relationship with physical documents
  • Risks, pricing and cost savings

Guarantees and Standby Letters of Credit

  • Using SBLCs and guarantees
  • Bid bonds, advance payment bonds, performance bonds
  • Claims under SBLCs
  • Legal jurisdiction
  • Credit or collateral
  • UCP 600, ISP98, URDG758
  • Balance sheet implications for banks under Basel
  • Specimen examples

Trends in Trade

  • Growth in International Trade
  • Overview of Basel III
  • Impact of Basel II/III on the Trade Services and Trade Finance
  • Automation and dematerialisation
  • Focus on cashflow and working capital

Day 2

Recap on Day 1 key takeaways Working Capital and Supply Chain

  • What drives the need for working capital
  • Cash conversion cycle – ‘Order to cash’ and ‘Purchase to pay’
  • Cost of capital – WACC, marginal cost of capital
  • Sources of short term funding
  • Understanding the physical vs financial supply chain
  • Process efficiency vs. financing
  • Financing and balance sheet management
  • Measures of working capital performance
  • P&L vs. balance sheet management

Class exercise – calculating key financial metrics

  • Worked examples of key financial metrics

Import and Export finance

  • Attributes of Trade Finance (short term, self-liquidating, selective)
  • Principles of Discounting and calculations
  • Practical examples and calculations
  • Pre and post shipment finance
  • Financing additional credit terms
  • Trust receipts
  • PO financing
  • Invoice financing
  • Example of financing solutions for exporters and importers

Receivables Finance

  • Supplier Centric solutions – Receivables Finance
  • With and without recourse – implications
  • Balance Sheet impact of Receivables Finance
  • Client case examples
  • Typical pricing for Receivables Finance deals

Class exercise –Receivables Finance

  • Worked example to illustrate P&L and Balance sheet implications for Receivables Finance

Supply Chain Finance

  • Buyer Centric solutions – Supply Chain Finance
  • Principle of credit rating differentials
  • Using SCF to extend Days Payable
  • Calculation of benefits (to anchor customer and their suppliers)
  • Accounting challenges of SCF solutions
  • Challenges of supplier onboarding
  • Banks and third-party electronic SCF platforms
  • Supplier financing case study

Commodity and Inventory Finance

  • Commodity Finance – an overview
  • Inventory Finance – an overview
  • Insurance and inspection

Export Agency Finance

  • Concept of EAF
  • Role of government ECAs
  • Using ECAs to guarantee and finance exports
  • Structuring EAF transactions
  • Tied and untied financing
  • Example transactions

Risk Distribution

  • Concepts of Risk distribution
  • Distribution to investors and hedge funds

Selecting banks for trade finance

  • Critical requirements for multinational corporates
  • Understanding ‘best practice’ (mandates, RFPs, relationships)
  • Bank geographic strategies and strengths/weaknesses
  • Specialist trade finance providers
  • Local or regional banks?
  • Approaches to pricing and service quality
  • Managing a RFP process
  • Decision process – Which bank, Which solution?

Course Wrap-up

  • Summary of key takeaways
  • Presentation of Certificates

Who should attend

Corporate treasurers and financial organisations, particularly cash management and transaction banking specialists who require an overview of trade and relevance for their client base.

Experts

Chris has over 30 years’ experience in the payments business, working in treasury, cash management, transaction services, trade, e-commerce and card acquiring. He has worked in senior roles for Citibank and Bank of America and founded the treasury workstation company, IT/2. In 2003 he set up Tran...

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