presented by: charles avaunzaff vice president global trade sales

Presented by:

Charles AvaunzaffVice President

Global Trade Sales

Global Trade Sales Presented to MBIA

Know Your Counterparty

Major Risks in International Trade

• Country

• Business / Commercial Risk

Who should take the Risk and how are we

going to get Paid?

METHODS OF EXPORT PAYMENT

WHAT ARE THE OPTIONS?

• Open Account• Documentary Collection• Letters of Credit • Pre-Payment

Buyer Seller

Open Account

Documentary Collection

Letter of Credit

Pre-PaymentHigh

Low

RISK Low

HighRISK

Risks in Methods of Payment

STANDARD DOCUMENTS• BILL OF EXCHANGE OR DRAFT• TRANSPORT DOCUMENTS (OCEAN

B/L, AIR WAYBILL, TRUCK B/L)

• COMMERCIAL INVOICES• PACKING LIST• MISCELLANEOUS DOCUMENTS

OCEAN BILL OF LADING

• Receipt for the Merchandise • Contract of Carriage• Title to Merchandise

Letters of Credit

LETTER OF CREDIT

• OPENING BANK’S GUARANTEE THAT THE SELLER’S DRAFT WILL BE HONORED, IF THE TERMS AND CONDITIONS OF CREDIT ARE MET BY THE SELLER .

• MINIMAL RISK TO SELLER

Letter of Credit Payment Terms• Sight

– Payment is Due When Conforming Documents Are Presented

• Usance - Banker’s Acceptance – Payment is Due at a Later Date up to 180 Days– Can be Paid at a Discount Before Maturity

• Deferred Payment– Future Payment Undertaking Without Draft– Discount Difficult

INT’L COMMERCIAL TERMS

(INCOTERMS) • EX-WORKS• FAS (Free Along Side)• FOB (Free on Board)• CFR (Cost & Freight)• CIF (Cost, Insurance & Freight) • Others

Some of Union Bank of California’s Ex-Im Closings

• Solar panel exporter Northern California.• Grocery goods exporters in Northern

California • Software exporter in the Central Valley• Seafood exporter in the Pacific Northwest• Cosmetic exporter in Southern California• Publishing company in Northern California.

Current Ex-Im Deals Pending

• Environmental company in Pacific Northwest.

• Scrap metal exporter Southern California.• Gas valve exporters Northern California.• Environmental company Northern

California

Benefits for Prospects in UBOC Ex-Im Partnership

• Expedited loan approval process due to UBOC being a delegated authority lender

• Local Union Bank Trade Specialists navigate the program for the exporters.

• Structuring complex transactions with the support from Ex-Im Bank.

Other Ways GTS can Help!

There are other ways GTS can help import/export customers:

• Problem: Customer wants to increase export sales but is uncomfortable with non-payment risk (commercial & political) and cannot finance foreign A/R. Solution: Export credit insurance and potential UBOC financing of foreign A/R that is credit-insured by an acceptable insurer. GTS works with several reputable export credit insurance brokers & insurers.

• Problem: Customer wants to increase sales by offering invoices payable in local and/or USD. Solution: Work with F/X to provide dual currency invoices or simply invoices in local currency.

• Problem: Customer processes import or export payments through another bank but is not happy with the level of service. Solution: GTS performs a “diagnostic” and proposes a Web-based service solution at competitive prices.

Global Trade Sales Division

Thank You