Commodity finance

"Commodity Finance" covers a whole range of commodity financing activities (base and precious metals, agricultural materials and energy). 

Clients

These are producers, traders, distributors and processors, who are accompanied along the entire value chain, i.e. from production to the transportation of raw materials to the places of processing or consumption.

Commodity Trade Finance is a subset of Commodity Finance, which applies to the financing of the underlying exchange of commodities from supplier to buyer

Structured Trade Finance is another subset of commodity finance, where specific financing techniques are adopted to minimize financing risks, primarily in situations where the duration exceeds the typical asset conversion cycle.

Instruments 

Although this type of financing is rather short-term, the bank can also offer longer-term solutions. Examples include:

• notification / confirmation / discounting of documentary credits;
• issuance of international guarantees and stand-by letters of credit (SBLC);
• operations backed by public export credit agencies;
• transactions covered by supranational entities or private insurers;
• syndications;
• open account financing solutions (goods are shipped by the exporter and received by the importer before payment for the goods is made or becomes due);
• commodity risk hedging.