Structured Trade Finance

본문내용

Structured Trade Finance

• Export Transaction Support: Korea Eximbank offers a variety of facilities such as Export Bill Purchase, Forfaiting, and Export Factoring to ensure exporters receive payment upon performance of their contracts
• Import Transaction Support: Korea Eximbank facilitates import transactions through Letter of Credit, Import Factoring, and L/C Confirmation

Export Transaction Support	Export Bill Purchase	Purchase (from exporters) of export bills arising from export contracts that may or may not be backed by L/Cs
	Export Factoring	Purchase of receivables arising from open-account export transactions, on a non-recourse basis
	Forfaiting	Purchase, on a non-recourse basis, of export bills arising from transactions with payment terms of less than 2 years, and backed either by usance L/Cs or by foreign bank guarantees.
	L/C Confirmation	Provide confirmation for Documentary Letter of Credit issued by respective foreign banks.
Import Transaction Support	Letter of Credit	Document issued by Korea Eximbank guaranteeing payment to sellers of essential natural resource and raw material imports.

Export Transaction Support

What is Export Bill Purchase?

Export Bill Purchase is a trade finance facility whereby Korea Eximbank purchases export bills arising from export transactions based on L/Cs or other arrangements (D/A, D/P, O/A, etc).

Once the exporter completes shipment of the products as required by the L/C or the terms of the contract, and requests Korea Eximbank to purchase the export bill and shipping documents, the Bank pays the contract amount to the exporter and then proceeds to collect the payment from the importer's bank (for L/C, D/A, or D/P transactions) or directly from the importer (for O/A transactions) at the due date.

Terms & Conditions

Beneficiaries	Companies with export records (with consideration to factors such as track record, expected payment amount, credit rating, collateral, etc.)
Eligible Transactions	L/C transactions or others (D/A, O/A) with payment terms below 2 years
Currency	USD, JPY, EUR
Eligible Amount	More than U$50,000 per transaction (except for partial shipments, or multiple transactions treated as occurring on the same date)
Repayment Term	30 days to 2 years (may be less than 30 days for SMEs and medium-large companies or for O/A transactions)
Type of Credit	Revolving credit (individual transaction-based credit also applicable)
Exchange Commission Rate	LIBOR + spread (depends on transaction type, credit rating, and collateral)
Security	Unsecured in the case of creditworthy borrowers; guarantee letter, real estate, tradable securities, etc. for others

What is Export Factoring?

Export Factoring is a trade finance facility whereby Korea Eximbank purchases exporters' receivables arising from open-account export transactions, on a non-recourse basis. The facility can be provided under either a one-factor system where the Bank directly assumes the risk of default by the foreign buyer, or a two-factor system where it does so in connection with a foreign factoring company.

Export factoring has the following advantages:

- Helps minimize exchange rate risk and secure working capital by ensuring prompt payment

- Loans for the TC can be provided for the TC’s supply of goods and services to KRC or the TC’s purchase of goods and services from the KRC.

- Boosts corporate balance sheets, as sales of receivables are not recognized as liabilities even under K-IFRS

- Competitive discount rate saves financing cost

Terms & Conditions

Beneficiaries	Exporters: companies with at least 1 year of experience producing or exporting the product or other similar product, or those that have regular transactions with their foreign buyers Importers: foreign governments, foreign companies, overseas subsidiaries of Korean companies, etc.
Eligible Transactions	Open-account export transactions based on long-term supply contracts or individual purchase orders
Eligible Receivables	One factor system: payment terms up to 6 months (up to 1 year depending of the buyer's credit rating) Two factor system: payment terms up to 6 months
Disbursement Method	Purchase of receivables as they arise, within the revolving credit limit set for individual export contracts
Discount Rate	One factor system: LIBOR + Spread Additional fee charged under two-factor system
Security	Unsecured

What is Forfaiting?

Forfaiting is a trade finance facility whereby Korea Eximbank purchases from exporters, on a non-recourse basis, letters of credit issued by, or export bills guaranteed by, foreign banks on behalf of buyers. Lack of recourse means the Bank cannot hold the exporter liable even if the foreign bank fails to honor its letter of credit or guarantee; it thus frees the exporter from the risk of buyer default and lightens the liability side of its balance sheet.

Terms & Conditions

Beneficiaries	Creditworthy companies with at least 1 year of experience producing or exporting the product or other similar product, or those that have a history of at least 1 transaction with the current buyer
Eligible Transactions	Export transactions based on irrevocable L/Cs issued or confirmed by foreign banks in countries above a certain credit score assigned by the Bank, or non-L/C based export transactions (including intermediary trade) backed by payment guarantees of foreign banks
Currency	USD, JPY, EUR, etc.
Eligible Amount	US$10,000 to US$50,000,000
Repayment Term	At least 30 days, less than 2 years
Discount Rate	Up to 1 year: LIBOR + spread Up to 2 year: SWAP RATE + spread
Security	Unsecured

What is L/C Confirmation?

Korea Eximbank provides confirmation for Documentary Letter of Credit issued by the respective foreign banks.

• KOREA-EXIM
• Korean Exporter
• Foreign Importer / Government

Terms & Conditions

Applicant	Korean exporters or foreign banks
Beneficiary	Korean exporters
Maximum Financing Amount	100% of L/C amount
Confirmation Period	Less than 2 years
Confirmation Fee	Determined on case-by-case basis

Import Transaction Support

Letter of Credit

What is Letter of Credit?

A Letter of Credit is a document issued by Korea Eximbank guaranteeing payment to a foreign seller on behalf of an importer. The Bank opens L/Cs for importers to facilitate the import of essential materials and natural resources.

Terms & Conditions

Eligible Transactions	Imports of eligible items defined by Korea Eximbank
Currency	KRW, USD, JPY, EUR, etc.
Eligible Amount	Up to US$50,000
Commission	Determined as per credit rating