VTB Bank provides a wide range of trade and export finance services supporting import operations, including tied financing, Export Credit Agencies (ECA) covered finance, post-import finance and guarantee transactions.
Tied financing is available for VTB Bank clients involved in export-import activities. VTB provides financing to corporate clients by means of attracting interbank funds from the international financial institutions; the product is primarily focused on short-term financing.
The advantages of tied financing are: availability of substantial volumes of funds, lower pricing for VTB clients, easy and fast deals structuring and execution.
Pre-export finance scheme
ECA covered finance
ECA covered finance is used primarily by importers of capital-intensive goods with long payback periods (such as aircrafts, new production lines, plant construction, high-tech and heavy equipment, etc.). VTB offers its corporate clients long-term financing (amortizing) for the purchase of foreign equipment or payment for a foreign counterparty’s services by means of attracted funding from international financial institutions. ECA guarantees the transaction’s risk in order to extend the financing tenor and lower the pricing (possibility to arrange a grace period for the repayment of principal amount up to 2 years).
ECA covered finance (based on LC)
ECA covered finance (refinancing without LC)
Post-import finance is available for corporate customers importing goods and services (commodities, food & beverages, agricultural goods, machinery and equipment, spare parts, etc.). Depending on the subject of the contract and the counterparty country, VTB can provide post-import finance for up to 5 years.
At present time post-import finance is arranged through LCs with deferred payment and discounting. In this transaction, VTB issues LCs with deferred payment by order of the importer (client). The LC is then discounted by the foreign bank against documents. The client receives a deferral of payment for a specified period (up to 5 years), at a lower interest rate, while the foreign exporter receives the money at sight against delivery/documents presented to the foreign bank.
The abovementioned form of financing is currently the most advantageous for the client as it offers the optimal discounting terms and conditions by foreign banks dealing with VTB.
For more information on the LCs, please visit the Letters of Credit page on our website.
Bank guarantees issued by VTB Bank against the counter-guarantees of a foreign banks allows importer to avoid performance risk under contractual obligations by the foreign supplier (or a foreign contractor in a construction project).
For more information on guarantees please visit the Guarantee Transactions page on our website.