International trade depends upon confidence.
Supporting Commerce Across Borders.
A buyer must be confident that goods will be supplied according to agreed terms. A seller must have confidence in payment. Financial institutions must understand the transaction they are being asked to support.
We seek to understand the goods, counterparties, contractual obligations, payment structure and transaction risks before considering the appropriate financial solution.
OUR APPROACH
The Trade Comes First.
Trade finance should never be considered independently of the commercial transaction it supports. This allows us to consider the financial requirement within the context of an identifiable commercial purpose.
Understand. Verify. Structure. Execute.
DOCUMENTARY TRADE
Documentation Creates Confidence.
International transactions frequently involve parties separated by geography, jurisdiction and commercial history.
Documentation provides the framework through which their respective obligations can be understood.
Depending upon the transaction and available capabilities, trade-finance arrangements may involve consideration of documentary structures designed to establish the conditions under which payment, performance or financing occurs.
Our approach places emphasis on consistency between the commercial contract, financial structure and underlying movement of goods.
GUARANTEES & UNDERTAKINGS
Supporting Contractual Confidence.
Certain commercial relationships require additional assurance that contractual or financial obligations will be performed.
Where appropriate and within available capabilities, guarantee-related solutions may be considered in connection with legitimate underlying commercial requirements.
These may relate to matters such as:
Payment Obligations
Supporting defined financial commitments between commercial parties.
Performance
Providing assurance around specified contractual obligations.
Advance Payments
Supporting transactions where funds are provided before contractual performance is completed.
Contractual Commitments
Addressing selected obligations arising from properly documented commercial agreements.
PRE-SHIPMENT & POST-SHIPMENT REQUIREMENTS
Finance Around the Trade Cycle.
Commercial funding requirements may arise at different stages of a transaction.
Pre-Shipment
Capital may be required before goods are dispatched to support procurement, production, preparation or other legitimate transaction costs.
Post-Shipment
Financing may be required after goods have been shipped but before final settlement has been received from the buyer.
Where such financing falls within our mandate, the structure is considered against the underlying contract, documentary evidence, transaction timeline and repayment source.
LETTERS OF CREDIT
Payment Against Defined Conditions.
Letters of credit can provide an established framework for managing payment risk between buyers and sellers.
Subject to the specific transaction and available capabilities, documentary credit structures may be considered where payment is to be made against presentation of documents complying with agreed terms.
The effectiveness of the structure depends upon clarity. The commercial contract, documentary requirements, shipment conditions and payment mechanism should be aligned before execution begins.
IMPORT FINANCE
Supporting the Purchase of Goods.
Importers may require financial structures capable of bridging the period between purchasing goods and receiving proceeds from their onward sale or use.
Where appropriate, trade finance may help support this commercial cycle.
EXPORT FINANCE
Supporting International Sales.
Exporters face a different set of challenges. Goods may need to be produced, procured or shipped before final payment is received.
Buyers may request extended payment terms. Commercial risk may extend across jurisdictions.
Appropriate trade-finance arrangements can help align the timing between performance and payment.
Our assessment considers the exporter, buyer, contractual terms, transaction cycle and identifiable source of repayment.
Finance Connected to Physical Trade.
COMMODITY TRADE FINANCE
Commodity transactions require particular discipline. The value of the transaction may be significant. Goods may travel through multiple jurisdictions. Prices can fluctuate.
Documentation, logistics, inspection and counterparty performance all matter.
Swiss Securities & Trust AG considers selected commodity-related transactions where the underlying commercial activity can be appropriately understood and documented.
Depending upon the transaction, our assessment may consider:
Commodity type and specification
Relevant counterparties
Purchase and sale contracts
Pricing mechanism
Quantity and transaction value
Payment mechanism
TRANSACTION-BASED FINANCING
Finance With an Identifiable Exit.
Where financing is provided against a specific trade, the repayment mechanism should be understood from the beginning.
We seek to identify how capital enters the transaction, what commercial activity occurs while it is outstanding and how the financing is ultimately repaid.
A transaction-based structure may therefore consider:
Advance
The capital required to support the underlying trade.
Use of Funds
Creating investment profiles designed around specific income objectives.
Transaction Cycle
The period between deployment of capital and expected settlement.
Payment Flow
How proceeds move between relevant parties.
Repayment Source
Introducing differentiated sources of return within a broader portfolio.
Security & Control
Any appropriate contractual, documentary or asset-related protections associated with the transaction.