Commodity Trade Finance
The Bank has established itself as a provider of a traditional Swiss banking product, namely Commodity Trade Financing (“CTF”). Under CTF, we understand an uncommitted working capital facility, advanced to a commodity trader and consisting of self-liquidating, short-term loans (up to 365 days) to finance the purchase, transportation, storage and sales of physical commodities.
Documentary Credits
Documentary Credits provide for an independent payment mechanism, separate from the underlying trade agreements. Modern trade would be inconceivable without documentary credit instruments. General corporate financing is used to manage solvency or liquidity, but Documentary Credit instruments may not necessarily indicate a buyer’s lack of funds or liquidity. Instead, these trade finance products may be used to protect against international trade’s unique inherent risks, such as currency fluctuations, political instability, issues of non-payment, or the creditworthiness of one of the parties involved. In particular, these trade finance products work via:
Invoice Discounting
Invoice Discounting is generally provided on a short-term and revolving basis. As invoices are paid by the off-takers, the facility amount automatically gets repaid and allows for redrawing against new invoices.
Export Finance (ECA-backed)
Export Finance is the financing of capital goods and the development of related projects backed by Export Credit Agencies (“ECA”). An ECA is an institution that supports domestic companies’ international exports by underwriting the inherent political and commercial risks.