Standby Letters of Credit Case Study Centralising trade finance - - PowerPoint PPT Presentation
Standby Letters of Credit Case Study Centralising trade finance processes to maximize control and efficiency GTR North America Trade & Export Finance Conference 2015 New York Oswaldo Ramirez, Director, Capital Markets & FX, Cameron Glenn
GTR North America Trade & Export Finance Conference 2015
New York
Oswaldo Ramirez, Director, Capital Markets & FX, Cameron Glenn Kocher, Director, Head of Trade & Working Capital Americas, Barclays Carlo d’Amore, Head of Financial Institutions and Partners Management, Bolero International
Bolero International is a trusted third party platform which securely and legally exchanges data and documentation in support of international trade.
Bolero Trade Finance – The consolidation and visibility of trade finance documents and related messages, including letters of credit, guarantees, standby letters of credit and documentary collections between a corporate and their panel banks Bolero ePresentation – The electronic presentation of compliant trade documents from one party to another in a supply chain for open account and letter of credit settlements, with or without electronic Bills of Lading
Formed as a joint venture between SWIFT and the TT Club Launched first Bolero applications to use with Bolero network and support 3rd party systems Launch of End-to- End LC e-Presentation solution based on eUCP rules Processing over 400k multi-bank trade documents per month Largest integrated corporate/bank/carri er trade network
1998 2005 2011 2013
5 countries 14 countries 26 countries 45 countries
Bolero in 2015 4 global offices 59 trading countries supported 60 trade banking groups 74% growth of entities on Bolero in 2 years 1.4m completed payment Presentations 19,000 monthly presentations +$80bn of transaction value per annum
The world’s largest community platform of financial institutions engaged in corporate-to-bank trade finance transactions The world’s first electronic Bill of Lading solution The world’s first ePresentation under eUCP rules
ERP
Head Office Regional Offices Banks
– Drivers – Value Proposition
Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries. Leveraging its global manufacturing, engineering and sales and service network, Cameron works with drilling contractors, oil and gas producers, pipeline operators, refiners and other process owners to control, direct, adjust, process, measure and compress pressures and flows.
SBLC’s and Bank Guarantees are very prevalent in our industry. Projects can be large and multi-year and, as our business grows, so does the need for SBLC’s
13% APME , 43% Americas and 44% Europe
Think about amendments, extensions, etc.
Standby Letters of Credits and Bank Guarantees
Lack of risk management standards
Deficient data visibility
Lack of centralized bank relationship management
Resource Intensive
issuance of all SBLC’s for Cameron worldwide
across regions, divisions and banks
minimum visibility,
T&C’s negotiations
to outstanding contingent liabilities
capacity utilization & improved pricing
Compliance
involvement
Centralized professional Treasury Trade Team
banking & Cameron-specific Know-How
Process
turnaround times
quarterly invoicing from Banks
Bank Accounts
Global Team
– Centralized Treasury Team deployed
– Collaboration with Divisions & Proposals Groups – Treasury Trade team handles ALL negotiations with banks on wording , SBLC terms and interacts with Beneficiaries as needed.
– GBS metrics aligned to & impact Business Goals – Adapt GBS Process measures to manage E2E Processes
Banks
– Treasury issues SBLC’s only via Bolero and only thru Cameron’s “preferred“ banks – Currently 9 major banks, more on the way. – Improved pricing
– Evaluate first cut of benchmark results for relevance & comparability – Start Benchmarking remaining X processes by Q1
Process Global Platform
– Bolero Implemented in phases:
– All BG\SBLC related requests submitted via internal tool using standard process & forms – Improved reporting \ Dashboard – Scalable (TTS, OneSubsea JV) – Handles new requests, amendments, PCG, Comfort Letters, Indicative Pricing, Wording – 100 LCs/month with increasing levels of complexity
less requirements
Barclays, bank guarantees and standby letters of credit
Trade Finance & Working Capital at Barclays
Barclays operates dedicated Trade Finance and Working Capital businesses in 25 countries
globally
Dedicated in-country Trade Finance professionals working across the full spectrum of Trade
Finance and Working Capital products
Active Corporate and Financial Institutions Trade Finance business lines Significant Oil & Gas franchise with coverage in major markets such as Houston, Aberdeen,
UAE, and South Africa Commoditized Product
Bank Guarantees and Standby Letters of Credit are essentially commoditized products In any given client relationship Barclays is likely to compete against 10-20 banks as providers of bank
guarantees and SBLCs
Trade Finance banks must find a way to differentiate their offering:
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Why Barclays partners with Bolero?
Drivers
Managing multiple bank proprietary systems is onerous and inefficient for clients, and thus detracts
from service quality:
Bank proprietary systems do not address the needs of large global companies, but are rather more
relevant for small/mid-market companies with limited bank groups
Value Proposition
Consistently hear from client treasury teams on the importance of making their day-to-day jobs easier Opportunity to be part of the solution and not exacerbate the problem Higher service quality via:
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How Bolero benefited the Cameron/Barclays relationship?
Outcome
Barclays has been a banking partner of Cameron since 2003 But for many years, the Barclays/Cameron relationship was a legacy arrangement and limited to our
respective UK operation s - a strong relationship but ultimately one dimensional
In 2011 Cameron undertook their centralization project Seen at Barclays as an opportunity to “step-up” in the relationship - again be part of the solution! Our flexibility to adopt Bolero opened the door to the Trade Finance opportunity at Cameron and then
helped to expand the overall relationship:
US
–
RCF lender
–
CP dealer
–
Co-manager of last DCM bond issuance
–
FX
–
Equity Research coverage
– Bank Guarantee and Standby Letter of Credit facilities (also including OneSubsea) Barclays Trade and Bolero was essentially the glue that kept everything together during the legacy years
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