Export finance is represented in all major trade and capital markets and provides a comprehensive range of powerful risk management advisory and risk hedging instruments as well as innovative tailored short, medium and long-term trade finance solutions along the value chain. Export finance products help settle the conflicting needs of importer/buyer and exporter/seller
Clients benefit from the management of execution risks and can benefit from additional liquidity via financing of the respective payment terms, i.e. credit maturities are tailored to the specific period in their trade flow for which financing is required
A guarantee is an irrevocable undertaking and is issued on the instruction of the bank’s client (applicant) in favour of a third party (beneficiary), the latter typically being the commercial counterparty of the applicant. It is a risk-mitigating product mainly issued to secure performance obligations arising from commercial contractual or legal obligations but also to enable advance payments in favour of the client. Guarantees are off balance sheet obligations and unfunded until the client fails to fulfil his respective obligation. Examples of common guarantee types include, but are not limited to: Bid/Tender, Performance, Advanced Payment, Warranty, Retention or Customs Guarantees
Commodity trade finance
Deutsche Bank’s Commodity Trade Finance Teams originate and structure commodity-backed trade finance transactions to fund all aspects of the commodity conversion cycle
Commodities are the building blocks of societies and industries and they are a prerequisite for global economic progress
The production/extraction and primary processing of commodities is often associated with a high impact on its surroundings be it social, economical/political or environmental
Given this high impact nature, sustainability risks and potential gains are at the forefront of commodity companies as well as of their financiers
Documentary trade finance facilities
Letters of Credit (LCs) are the safest and often most convenient means of financing trade related transactions. An LC (Documentary or Standby) is a written undertaking given by a bank (Issuing Bank) to a beneficiary on instruction from an applicant (Issuing Bank’s client) to pay the beneficiary at sight, or at a determinable future date, a stated amount of money within a defined time period. This undertaking is conditional upon the beneficiary’s documentary compliance with the terms and conditions in the LC
A Documentary Collection is the collection of a sum of money due from a buyer to a bank against delivery of certain documents. The bank, acting as trustee and intermediary between exporter and importer, presents documents - by order of the exporter - which are proof of the actual delivery of a product or service rendered, and in exchange receives payment of the amount owed or obtains acceptance of a bill of exchange
A guarantee is an irrevocable undertaking and is issued on the instruction of the bank’s client (applicant) in favour of a third party (beneficiary), the latter typically being the commercial counterparty of the applicant. It is a risk-mitigating product mainly issued to secure performance obligations arising from commercial contractual or legal obligations but also to enable advance payments in favour of the client. Guarantees are off balance sheet obligations and unfunded until the client fails to fulfil his respective obligation. Examples of common guarantee types include, but are not limited to: Bid/Tender, Performance, Advanced Payment, Warranty, Retention or Customs Guarantees
How to link your sustainability effort with our products
Ring-fenced sustainable transaction
Underlying exports/imports or supported projects are dedicated to a specific purpose, which clearly meets sustainability criteria as per internationally recognized taxonomies
Relevant examples of taxonomies are the EU Taxonomy for Sustainable Activities, the Green & Social Bond Principles by the ICMA as well as the Green & Social Loan Standards by the LMA, all of which are considered and combined in Deutsche Bank’s public Sustainable Finance Framework
A range of structures can be applied to ensure a robust monitoring of eligibility against Deutsche Bank’s Sustainable Finance Framework, hereby flexibly leveraging existing data sources
Inclusion of an ESG-linked incentive to the financing structure
The client is incentivised towards sustainable behaviour, e.g. via paying a favourable price upon strong sustainable performance or paying an extra penalty in case sustainability targets are not met
The charged margin becomes variable by inclusion of a covenant in the legal facility documentation. The actual pricing is determined by defined and measurable sustainability Key Performance Indicators (KPIs), e.g. CO2 emissions published in annual report or sourcing of energy from renewable resources
The number and complexity of sustainability KPIs can be jointly discussed and individualized to allow a pragmatic approach as every client setup is unique. Regardless of the agreed KPI structure, all solutions have in common that they provide clear financial incentives and thereby send a strong message to our client’s stakeholders, demonstrating the company’s commitment and innovative approach to sustainability
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