Structured trade finance
Produced in partnership with Sullivan

The following Banking & Finance practice note produced in partnership with Sullivan provides comprehensive and up to date legal information covering:

  • Structured trade finance
  • What is it?
  • Forms of structured trade finance
  • Pre-export finance
  • Prepayment
  • Tolling
  • Borrowing base facilities
  • Reserve base lending
  • Warehouse finance
  • Export Credit Agency finance
  • More...

Structured trade finance

Coronavirus (COVID-19): For information on the implications of coronavirus on trade and commodity finance transactions, see Practice Note: Coronavirus (COVID-19)—implications for trade and commodity finance transactions.

What is it?

Structured trade finance or structured commodity finance transactions are generally loan facilities under which funds are applied to produce, store, manufacture, sell or otherwise deal with goods or commodities. The money generated from the sale of those goods is used to repay the loan. In other words, they are structured to be self-liquidating.

These transactions are invariably international and require consideration of, amongst other things, the appropriate structure and type of security that can be taken, and the types of goods being financed. For example, if the product is crude oil, export licences may be required in some jurisdictions. As such, local legal advice will usually be required to ensure the transaction is properly structured from a local law perspective.

Set out below are some of the different structures a financing can use. These are the most basic structures but they can be varied in a number of ways. For example, a loan can be bilateral (between a single lender and a borrower) or syndicated (between a group of lenders and a borrower). In the case of syndicated loans, the lenders will be represented by an agent during the lifetime of the facility, whose role will be

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