Structured Trade Finance

Short-term financing based on interbank agreements or letters of credit with post-financing without insurance coverage of Export Credit Agencies

Financing without insurance coverage of Export Credit Agencies is usually provided for up to 1-3 years

Financing from FFI without using letter of credit

Targeted financing received from a foreign bank for the subsequent issuance of a loan to a customer for a specific foreign trade transaction

Letter of credit with post-financing

Using the Halyk Bank's letter of credit, it is possible to receive funds for export operations or financing before receipt of revenue from import sales.

The loan attracted without insurance cover ECA is a flexible instrument in terms of repayment schedule, terms of financing, type of goods being purchased or services rendered.

Basic conditions of post-financing under the letter of credit 

1. Contract terms

subject of the contract: the purchase of goods/receipt of services (acquisition of fixed assets — machinery and equipment, motor transport, maritime transport, etc., or related services)

terms of payment: under letter of credit issued for 100% of the contract value or for the “principal” contract value (less advance payment)

2. Terms of financing

Loan amount: from USD/EUR 100,000.00
term: up to 1-2 years (depends on the loan amount and type of transaction)
principal repayment: quarterly/semi-annual/annual payments/at the end of the financing period

Medium- term or long-term financing under the insurance coverage of Export Credit Agencies  

Import financing with insurance coverage of loan provided by the Export Credit Agency of the country of origin (export loan insured by ECA)

Main characteristics 

ECAs are designed to encourage the export of goods;

ECA insure up to 95% (some ECA up to 100%) of the Borrower's political and commercial risks;

financing conditions (loan value and terms) are more beneficial than a foreign bank loan not insured by the ECA;

Basic financing conditions under ECA loan coverage  

1. Contract terms

subject of the contract: the purchase of fixed assets (machinery and equipment, vehicles, marine transport, etc.)  

Payment terms
at least 15% of the contract value - advance payment
up to 85% of the contract value - against the shipment of equipment/provision of services
Coverage amount: up to 85% of the contract value
origin of goods: at least 60-70% of the goods must be produced in the ECA country  

2. Financing terms

Loan amount: from USD/EUR 500,000.00
term: from 3 to 5-7 years (depending on the loan amount and the purchased product/type of project)
Principal repayment: equal semi-annual payments starting from the 6th month from the cutoff point (the cutoff point can be: 1) the last shipping date; 2) weighted average shipping date; 3) date of commissioning of the equipment)

Interest (excluding the margin of Halyk Bank JSC)

floating rate: 6m Libor / Euribor + foreign bank margin

fixed rate: “base” rate + foreign bank margin

ECA insurance premium: one-off payment either from the buyer's own funds or at the expense of loan granted by financing bank (can be included in the contract basic value financed with an ECA insurance coverage)

advance payment: can be financed separately at the expense of commercial loan from granted by FFI for a period of up to 2 years (depending on the amount) 

Export credit insured in several ECAs

Export deliveries from several countries can also be financed with the participation of several ECAs. In this case, each ECA insures the cost of export deliveries from its own country