Key Terms: Trade Finance and Structured Commodity Trade Finance

Important. This term sheet is indicative. It is not a commitment to lend or an offer of securities. Any facility is subject to full underwriting, approvals, documentation, and enforceability in relevant jurisdictions. Where securities activity applies, it will be conducted by or through a registered broker-dealer. We do not issue bank instruments.

Key Terms: Trade Finance and Structured Commodity Trade Finance

Indicative ranges and structures for contract-based finance, structured commodity trade finance, letters of credit, standby letters of credit, bridge loans, and junior capital. Final terms depend on counterparties, collateral, jurisdiction, and market conditions.

Products Covered
  • Contract-based or prepayment finance against offtake or supply contracts
  • Structured Commodity Trade Finance covering inventory, transit, and receivables
  • Documentary Letters of Credit issuance and confirmation
  • Standby Letters of Credit issuance and confirmation
  • Bridge loans for shipment gaps and closings
  • First-loss capital injection as sponsor or third-party junior tranche
Facility Size USD or EUR 2,000,000 to 100,000,000 per borrower group. Single transactions from 1,000,000.
Tenor
  • Contract-based and SCTF: 60 to 270 days per cycle. Extendable to 360 days.
  • DLC: 90 to 360 days, sight or usance.
  • SBLC: typically 12 months plus 1 day.
  • Bridge loans: 1 to 12 months.
Advance Rates
  • Eligible receivables: 70% to 90%.
  • Inventory in bonded or approved warehouses: 70% to 85% with collateral management agreement.
  • Inventory in transit: 60% to 80% against acceptable title documents.
  • Against confirmed DLC or SBLC proceeds: up to 90% of face value.
Pricing
  • Contract-based and SCTF: SOFR or EURIBOR plus 6.0% to 12.0% per annum. Floors may apply.
  • DLC issuance: 0.75% to 2.00% per annum of face value. Confirmation 0.25% to 1.00% per 90 days.
  • SBLC issuance: 1.50% to 4.00% per annum of face value. Confirmation as quoted.
  • Bridge loans: 1.25% to 2.50% per month. Original issue discount 1% to 3%.
  • First-loss capital: 10% to 30% of facility as junior tranche. Economics case by case.
Fees
  • Arrangement: 1.5% to 3.5% of facility.
  • Commitment on undrawn amounts: 0.50% to 1.00% per annum where applicable.
  • Agency and monitoring: quoted per transaction or per month.
  • Legal, due diligence, KYC, inspections, and SWIFT: at borrower cost.
Security Package
  • Assignment of contract proceeds and receivables.
  • First-ranking pledge over goods, warehouse receipts, and title documents.
  • Control over collection accounts and escrowed proceeds.
  • Collateral Management Agreement with approved operator where required.
  • Corporate guarantees or SBLC support where needed.
Use of Proceeds Restricted to eligible trade cycles including purchase of goods, freight, insurance, duties, and verified working capital linked to the contract.
Key Covenants
  • Borrowing base coverage 110% to 130% at all times.
  • No new liens or pari passu debt without consent.
  • No dividends, affiliate loans, or asset disposals outside the ordinary course.
  • Maintain hedges for price and FX risk where exposure is material.
  • Minimum tangible net worth and liquidity tests as agreed.
  • Sanctions, AML, and anti-corruption compliance. No PEP or restricted party exposure.
Reporting and Monitoring
  • Weekly inventory and shipment reports during drawdown.
  • Monthly management accounts and receivables aging.
  • Inspection rights and site visits. Field exams as requested.
  • Bank statements for pledged accounts.
Conditions Precedent
  • Complete KYC and AML, corporate approvals, and legal opinions.
  • Executed offtake or supply contracts with acceptable counterparties and Incoterms 2020.
  • Insurance covering cargo and stock. Political risk or credit insurance where relevant. Lender named as loss payee.
  • Assignment of proceeds, perfected security interests, and account control.
  • Independent valuation or inspection where required.
LC and SBLC Rules DLCs subject to UCP 600. SBLCs subject to ISP98. Demand guarantees may follow URDG 758. URC 522 for collections when applicable.
Governing Law and Jurisdiction
  • Facilities under English law or New York law.
  • Disputes before English or New York courts. ICC or LCIA arbitration available case by case.
  • Local security governed by the law of the asset location.
Eligibility Post-revenue companies with verifiable trade history. Preference for EBITDA above USD 10,000,000 and audited financials. Startups and shell entities are not eligible.
Events of Default
  • Payment default or breach of financial covenants.
  • Misrepresentation, fraud, or sanctions breach.
  • Cross-default above agreed thresholds.
  • Material adverse change that impacts performance of the trade cycle.
Process and Timing
  • Week 1: intake, NDA, document checklist, preliminary term sheet.
  • Weeks 2 to 3: due diligence, approvals, definitive documents.
  • Weeks 3 to 4: collateral setup, account controls, first draw or LC issuance.
First-Loss Capital Sponsor contribution or third-party junior tranche sized at 10% to 30% of facility. Funds escrowed prior to first draw. Waterfall seniority and economics agreed in final documents.
Borrower Costs All external counsel, auditor, inspection, collateral manager, courier, and SWIFT fees for borrower’s account.
Notes No guaranteed offers or pay-to-play monetization. Engagements are best efforts and subject to underwriting and approvals.

Reminder. Ranges are indicative and may tighten based on counterparty quality, storage controls, documentation, and market liquidity.

Disclaimers. This summary is qualified by final facility documentation. Terms, fees, and availability may change by jurisdiction, collateral, counterparty, and market conditions. Only post-revenue companies are served, with a preference for EBITDA above USD 10,000,000. We do not provide investment, legal, tax, or accounting advice.