Day 1: Export Risks and Risk Mitigation Techniques

Review the categories of credit risk incurred when selling to customers inside the U.S. and the additional risks involved when selling overseas and then learn how various tools are designed to manage these risks.  This session compares commercial and standby letters of credit, standard and silent letter of credit confirmations, bank and corporate guarantees, forfaiting, factoring, credit insurance, credit derivatives, and foreign exchange contracts from the perspective of what risks each one covers. Participants learn to identify risks and the appropriate tools for managing those risks.

Objective #1:   Identify payment risks in international commercial transactions
Objective #2:   Understand the risks that are and are not covered by various risk mitigation techniques
Objective #3:   Match risk mitigation techniques with risks inherent to transactions you will face
Objective #4:   Craft an international credit policy suitable to your company's risk appetite and
                        competitive position

Highlights:

Credit Risks: Political, Economic, Commercial, FX

The Spectrum of Credit/Payment Terms: Cash in Advance to Open Account

Cross-Border Payments: How Money Moves Between Banks

Incoterms 2010

Comparing Export Credit Risk Protection Mechanisms

unconfirmed L/Cs

confirmed L/Cs

standby L/Cs

independent/demand guarantees

accessory/contract guarantees

sight drafts, “documents against payment”

avalized drafts and forfaiting

factoring

non-recourse sale of receivables

credit insurance

credit derivatives

FX forwards & options

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Day 2: Export Letters of Credit: The Details

Letters of credit used in export sales (commercial L/Cs) are quite different from those credit managers are accustomed to using in domestic sales (standby L/Cs).  The biggest difference is that export L/Cs are intended to be drawn on and thereby serve as the means of payment for goods shipped.  The "rub" is that they tend to call for more documents, many of which are prepared by third parties.  Export L/Cs are designed to serve as a reliable means of credit assurance and also an efficient means of payment.  Yet 75% of the time the documents are noncompliant and it can take 3 to 6 weeks to get paid on a "sight" L/C.  This session will provide participants with a detailed review of the mechanics of export L/Cs and how they are structured to assure fast payment.  The discussion will then focus on the points at which the process tends to break down.  Participants will learn how to get paid in one or two days, even when documents are discrepant, how to avoid discrepancies (and non-payment), and how and when to use "silent confirmations.”

Highlights:

A Detailed Look at How Letters of Credit Work

advising and nominated banks

what “negotiation” actually means

“silent L/C confirmation”

assignment of L/C proceeds

transferable L/Cs

The UCP600

The SWIFT MT700 Format

“Usance” Letters of Credit and Discount Charges

Examining L/C Documents/Common Discrepancies

How to Obtain Immediate Payment under Unconfirmed L/Cs

Taking Advantage of “Freely Negotiable” L/Cs

Creating an L/C Instructions Form

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Day 3: Alternatives for Financing Export Sales

Learn how to better negotiate and structure commercial sales into domestic and foreign markets in order to simultaneously increase sales, limit risks, and improve cash flow. Examine tools that enable otherwise intolerable transactions by limiting payment and performance risks and tapping funding sources that are specifically designed for export sales.  This session explains the motives of the seller, the foreign buyer, and the seller's bank and then compares structures in order that attendees can craft an appropriate structure for each transaction they encounter.

Objective #1:   Differentiate among various trade-facilitating and credit-enhancing tools (e.g. commercial

                        & standby letters of credit, factoring, forfaiting, credit insurance)
Objective #2:   Understand how Treasury/Credit can be an integral partner and resource to Sales and

                        Marketing
Objective #3:   Learn what products and services to look for from the bank that finances your domestic and

                        international sales and how to choose the right bank for your company 
Objective #4:   Use tools that simultaneously provide customers with more competitive payment

                        terms while improving cash flow to the company and reducing risks

Highlights:

Security Interest Laws

“True Sale” Accounting Standards

Negotiable Instruments Law

Using Credit Insurance

Financing Documentary Collections

Financing Letters of Credit

Financing Open Account Sales

Exim- and SBA-Guaranteed Working Capital Loans (Pre-export)

Exim-Guaranteed and Privately Insured Post-Export Loans

Purchase Order Financing (Including Back-to-Back L/Cs)

Securitization of Receivables

Sources of Export Funding

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