Foundations of Structured Trade Finance
Published: 2015
Pages: 258
eBook: 9781787426313
The purpose of this book is to introduce readers to the fundamentals of structured trade finance (SFT) - an instrument used to financing trade in difficult environments by collaterising the loans.
Table of Contents
Cover | Cover | |
---|---|---|
Title page\r | i | |
Contents | iii | |
Dedication | ix | |
Acknowledgements | xi | |
About the author | xiii | |
Foreword | xv | |
Chapter 1: Introduction | 1 | |
Trade and development | 1 | |
Purpose and outline of this book | 6 | |
Chapter 2: Trade finance flows to developing countries | 9 | |
The need for trade finance | 9 | |
Trade finance flows to developing countries – A brief historical review of the African case | 14 | |
Chapter 3: Structured trade finance – Conceptual foundation, origins, and definitions | 33 | |
Conceptual foundation – Understanding risk | 33 | |
The origins of structured trade finance | 38 | |
Definitional issues | 40 | |
Chapter 4: Essential steps in structured trade finance | 43 | |
Collateralisation of credit | 43 | |
Structured trade finance: Essential steps and building blocks | 45 | |
Chapter 5: Structured trade financein action (1) – Typical commodity typedeal structures | 57 | |
Traditional structures | 57 | |
Chapter 6: Structured trade finance in action (2) – Deviations from typical commodity-type trade finance deal structures | 75 | |
Situations where an exporter’s performance risk is weak | 75 | |
Chapter 7: Extension to non-physical commodities | 139 | |
re-financing commoditised revenue flows1 | 139 | |
Turning reimbursement rights into a financing vehicle | 153 | |
Chapter 8: Pricing structured trade finance transactions | 163 | |
Considerations in establishing a pricing model | 164 | |
A suggested pricing formula | 164 | |
Pricing structure | 166 | |
Data requirements | 166 | |
Application of the pricing formula | 167 | |
Impact of emerging Basel III | 168 | |
Chapter 9: Operational risk issues in structured trade finance | 171 | |
Managing operational risks in structured trade finance | 185 | |
Chapter 10: Living the structure – Lessons of real life experience | 189 | |
The good | 189 | |
The difficult and challenging | 211 | |
Chapter 11: Summary and conclusion | 233 | |
Summary | 233 | |
Conclusions | 235 | |
Index | 237 |
Dr. Benedict Okey Oramah was born in Nigeria on 24 July 1961. He holds MSc and PhD degrees in Agricultural Economics, obtained in 1987 and 1991 respectively from Obafemi Awolowo University, Ile-Ife, Nigeria. He obtained a BSc degree in Agricultural Economics from the University of Ibadan, Nigeria in 1983. He held the position of assistant manager (research) at Nigerian Export Import Bank from 1992 to 1994 before joining Afreximbank as chief analyst in 1994, rising to the position of senior director, Planning and Business Development Department in 2007. He was appointed to the position of executive vice president of the bank in October 2008. As executive vice president at Afreximbank, Dr. Oramah supervises the business development (trade and project finance), syndications, specialised finance, research, and investment banking operations of the bank. He also assists the president of the bank in overseeing the bank's strategic planning and international cooperation activities. He is a regular speaker at UNCTAD's annual African oil and gas conferences. He has also been a resource person at several trade finance conferences around the world. Dr. Oramah is chairperson of the Africa Chapter of the International Factors Group (IFG). He is also on the board of IFG, the editorial boards of Trade and Forfaiting Review (TFR) and the Journal of African Trade (JAT), and is a member of the Consultative Board on the World Cocoa Economy of the International Cocoa Organisation (ICCO). Dr. Oramah has written over 35 articles (on a range of African economic and trade-related matters), the bulk of which has been published in leading international journals. He is married with three daughters.