American Exporters Discover Forfaiting: Old Technique, New Opportunities - Reaping benefits as institutional funs get involved

摘要

When the international forfait market reached the U.S. in the early 1990s, the term sounded strange (after all it's French), and the financial technique was unfamiliar (though a few discovered they had, in fact, used it earlier, but didn't know its name). Still, it was a welcome fresh resource to do stand-alone, "one-off" deals, and an alternative to U.S. Export-Import Bank programs. "Classic forfait," as some now call it, is a combination of a financial structure and an international network of investors, primarily banks, who originate, buy, and sell the trade obligations involved. It has financed the sale of capital equipment (say, food processing machinery or tractors), mostly with medium-term repayments (typically five years and semi-annual installments), using promissory notes or bills of exchange. And, since each installment has a life of its own, it can be traded, which creates the market or network. The risk in each transaction is most often covered by a guarantee from a bank (called an "aval") in the buyer's country. The exporter gets paid up front, after a discount. That is where the word forfait comes in. Once the exporter is paid, its involvement in the financial transaction is over; if the buyer fails to pay, the lender (or investor) has no recourse to the exporter. It has forfeited (a forfait, in French) its right to do so as part of the way that a forfait deal is structured.