Part of the Global Trade Certificate (GTC)

Introduction to Standby Letters of Credit - eCourse

Learn what a standby letter of credit is, including its process flow, industry best practices and how it differs from other types of documentary credits.

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LEARNING OBJECTIVES

By the end of this eCourse you will be able to:

Walk through the steps in a commercial letter of credit transaction.

Identify when a letter of a credit is a commercial DC or a SBLC.

Explain what an “evergreen clause” is and the circumstances in which one might be used.

Compare and contrast SBLCs with demand guarantees.

Explain the purpose of the capital adequacy regulations found in Basel III.

Understand the purpose of credit conversion factors (CCF).

Understand the two primary principles of letters of credit.

Discuss when and how UCP 600 applies to SBLCs.

Understand how SBLCs compare with bid bonds, performance bonds, and advance payment guarantees.

Explain how a SBLC can be used to arrange the issuance of a guarantee.

Describe how a bank determines the amount of its risk-weighted assets (RWA).

Describe how a SBLC might be used as a substitute for an escrow arrangement.

COURSE STRUCTURE & CURRICULUM

Access period

12 months

Duration

3 hours

Credits/CPDs

3 points

Parent Certificate

GTC

Lessons

Language

English

Lesson 1: Introduction

Lesson 2: Market Comparison

Lesson 3: Industry Application

Lesson 4: Market Comparison 2

Lesson 5: Arranging Guarantees

Lesson 6: Capital Adequacy and Basel

Lesson 7: Case Study

Lesson 8: Assessment

Who should take this course?

General practitioners working in banks, corporates, or financial institutions in functions such as relationship management, credit and compliance, but with an interest in trade finance.

Animated explainer videos

This eCourse includes 28 animated videos to help you better understand core concepts

Case study

Learning is easier with practical examples and we've included a whole lesson dedicated to a case study

COURSE AUTHOR

Buddy Baker

Vice President, Goldman Sachs

Mr Baker has more than 30 years of experience working with companies to finance and insure their trade receivables. He owns the consulting firm Global Trade Risk Management Strategies, which specializes in both online and on-site educational training, and designed the online training/certification programs used by the Association of International Credit and Trade Finance Professionals (ICTF), the Association of Trade and Forfaiting in the Americas (ATFA) and the Finance, Credit and International Business Group (FCIB) of the National Association of Credit Management (NACM). Mr. Baker has authored numerous magazine articles and the books Users’ Handbook to Documentary Credits under UCP600 (ICC publication no. 694), Documentary Payments & Short-Term Trade Finance, and The Regulatory Environment of Letters of Credit and Trade Finance.