SMU Executive Certificate in Structured Trade & Commodity Finance

Course Synopsis
Program Date

he emergence of Asia as an economic powerhouse has fuelled an extended rally in commodity prices. High commodity prices and buoyant consumption across Asia are boosting strong demand for structured trade and commodity finance. Banks have been quick to spot the rapidly growing market and are aggressively expanding into this market segment. Given the diversity, complexity and substantial deal sizes of commodity trades, banking and financial professionals need to possess specialised knowledge to control their risk exposures and ensure sustained profitability. The SMU Executive Certificate in Structured Trade & Commodity Finance course aims to equip participants with the practical skills to analyse, structure and present commodity financing proposals. This course adopts an industry-specific, case approach to real-life applications of various structures for financing agricultural commodities, oil and metals. Designed for professionals specialising in financing and risk management of commodities trading, participants will learn about transactional and borrowing base financing, and be guided on how to construct financing structures, identify risk and formulate mitigation, be cognizant of the legal environment and documentary requirements.

MAR

09

to

20
MAY

9, 16, 23 Mar, 6, 13, 20 Apr Sat 09:00 16:00

Program Fee
SGD $7,500 (excluding GST)

Funding
FTS funding of up to 50% may be available to eligible financial institutions. Terms and conditions apply.

For Enquiries
Jaclyn Mah | Chan Oi Lam | 6828 0254 6828 0563

Program Highlights
Focus on agri-commodities, oil and metals market segments Study Asian cases of transactional and borrowing base financing Construct structures using shipment sales, warehouse receipts, tolling, pre-export and prepayment financing techniques Work on case assignments to internalise learning

fti@smu.edu.sg fti.smu.edu.sg/stcf-main

Financial Training Institute @ SMU |

fti.smu.edu.sg |

fti@smu.edu.sg | +65 6828 0563

Curriculum Day 1
Structured Trade and Commodity Finance An Overview
Introduction What is structured trade and commodity finance Principal stakeholders and players Transactional financing and borrowing base financing Basic structures (shipment sale, pre-export, prepayment, tolling, warehouse receipt financing) Case Study: Borrowing Base Financing of Palm Oil Overview of structure and borrowing base facilities Key credit considerations (collateralisation, insurance) Form of borrowing base certificates Collateral control & monitoring Advance ratios & mark-to-market techniques Typical term sheet and documentation

Agri-commodities
Case Study: Transactional Financing Shipment Sales Financing of Bulk Agri-commodities Examples soya bean, rice, fertilisers Incoterms, standard terms and conditions Financing (documentary collection, LCs, shipping documentation) Insurance issues What can go wrong? (price, documentary, counterparty, bank & country risk) Typical term sheet and documentation

Day 3
Oil & Petroleum Products
Case Study: Transactional Financing of Petroleum Products Sales & purchase contract, letter of credit format Letter of indemnity and shipping indemnity Escalation and de-escalation clauses Payment undertakings In-tank transfer financing for oil in tanks and floating storage Peculiarities in financing oil Handling price volatility Risk assessment perspectives of bankers versus corporate Financing techniques (tolling, ship to ship, storage, contango & backwardation structures) Facility letter and hedging contracts

Day 2
Agri-commodities
Case Study: Transactional Financing Pre-shipment & Warehouse Receipt Financing of Cocoa Case analysis and insights Stock financing by way of green-clause LCs Role of inspection certificates and warehouse receipts What can go wrong? (price, transport & storage, inspector & warehouse keeper risk, commingling & seizure of goods) Writing term sheet and facility letter

Financial Training Institute @ SMU |

fti.smu.edu.sg |

fti@smu.edu.sg | +65 6828 0563

Day 4
Metals
Case Study: Refinancing of Insurance-backed Payment of Coke Supply to China Case analysis and insights Re-design security and finance documents to overcome financing constraints Acceptability of insurance company, performance, payment and insurable risks Limitation on recourse (trigger events, full versus limited recourse, pricing) Repayment mechanics (delivery and shipment, debt service reserve account) Term sheet, offer letter, mandate letter in club deal

Day 6
Metals
Case Study: Structured Prepayment Facility to Foreign JV in China under Tolling Contract for Alumina Pre-payment of alumina under term contract Pre-payment of tolling fees for processing of alumina under a tolling contract Pricing of aluminium ingots at time of purchase by off-taker Risk assessment (quality acceptable to offtaker, shortfall in sales proceeds etc.) Repayment mechanics (sales proceeds, escrow account, debt service cover ratio) Security and legal documentation

Day 5
Metals
Case Study: Pre-financing, Amortizing Facility for Alumina Imports into China by Hong Kong Offshore Company Case analysis and insights Deferred payment during tolling over predetermined period Delivery of aluminium ingots to Shanghai Metals Exchange against warehouse warrants Use of insurance to reduce final take Risk assessment (performance of smelter, quality of ingots, off-take, enforcement risks) Repayment mechanics (escrow account, debt service reserve account) Security and legal documentation

Certification
Upon successful completion of the assessment, candidates will be awarded the SMU Executive Certificate in Structured Trade & Commodity Finance.

Financial Training Institute @ SMU |

fti.smu.edu.sg |

fti@smu.edu.sg | +65 6828 0563

Bernadette Cenzon has over 20 years of experience in the banking industry. She held various senior
positions in European banks such as Natixis Banque, Rabobank, Fortis and Credit Agricole Indosuez. She has extensive experience in setting up structured trade desks in Singapore and Hong Kong, as well as structuring cross border and syndicated deals in Asia.

Poon Churn-Yuen has over 18 years of experience in credit, structured trade finance and risk management.
He started his career in the banking industry, before moving to the corporate sector in late 1999, where he held various management positions in BHP Billiton, Titan Petrochemicals and Chevron Texaco.

Yong Meng is a veteran corporate banker, with a distinguished career spanning over 30 years. He headed up
trade and commodity finance desks for European banks such as AMRO Bank, Rabobank and Fortis. He rejoined UOB in 2002, and was instrumental in building up the lead among the local banks in structured trade and commodity finance business.

Who Should Attend

This is an advanced level course targeted at professionals specialising in marketing, trading, financing and risk management of commodities trading. Participants are expected to have some working knowledge of traditional trade finance products such as Incoterms, shipping documentations, collections, different types of letters of credit, guarantees etc. This course is highly recommended for the following professionals: Senior management in commercial lending, looking to launch or expand into structured trade finance business; Relationship managers, corporate bankers who advise trading and commodity companies; Trade finance specialists, account and/or marketing managers who engage in structured trade financing; Commodity traders who are keen to learn the financing aspects of trades done; Corporate treasurers, finance directors in trading and commodity companies; Professionals in middle office of banks and corporate, in functions such as credit, risk, audit and operations, who are responsible for ensuring proper execution and risk management of trades.

Financial Training Institute @ SMU |

fti.smu.edu.sg |

fti@smu.edu.sg | +65 6828 0563