20 Dec

The update of the ITFA-Master participation agreement in New York is aimed at industry players who wish to participate only in unfunded risk participation. Among the players in the sector targeted by this agreement are insurance companies. The framework contract also provides for participation in transactions and facilities, such as guarantee mechanisms, financing facilities or debt purchases, in which the participant directly acquires a share of all instruments issued under such a mechanism. 2. Prior to the start of the transaction, the Bank of China (Luxembourg) S.A. Brussels Branch can provide comprehensive advisory services, design customized risk-involved solutions for bank customers, and commit to implementing risk participation at a given time in the future, at the agreed price and terms. In this case, it may be necessary for the client to pay a certain commitment fee depending on the length of the commitment. Packageing, also known as trade packages, is a means of obtaining liquidity in trade finance, where exporters receive liquidity by selling their receivables abroad (medium and long term) at a discount and on “no recourse”. In principle, without recourse or not, the package takes care of and accepts the risk of non-payment. In this case, a packager is a specialized financial institution or banking department that carries out export financing transactions without resorting to the purchase of medium- and long-term debts from an exporter.

In this case, a master risk-taking contract can be used to transfer a lender`s interest on a borrower`s receivables to a participant. In the package, a borrower`s receivables are usually guaranteed by the participant, the importer`s bank. 5. As part of the capitalization risk participation, the branch pays the participation allowance to the bank`s client after receiving qualified documents; In the context of a non-capitalized interest, the bank`s customer pays a risk commission to the branch, in accordance with the contractual provisions; Recognizing the potential problems associated with the processing of a multi-party document, the new MPA introduces the concept of two “master parties” as the only parties participating in the effective agreement.