ANZ

Trade Finance
Trade Risk Instruments
Mitigating Payment, Delivery or Performance Risk
These instruments are used where one party to a transaction wants a financial 'guarantee' to support an individual transaction or a series of transactions. The issuance of a guarantee shows that the issuing bank is confident that their customer will be able to honour its contractual obligations.

Common trade risk mitigation instruments used are:

  • Bank Guarantees
  • Standby Letters of Credit
  • Documentary Credits
  • Bid Bonds
  • Performance Bonds.
 Features Benefits

Multiple currencies

  • Can be issued in most major currencies.

Mitigate risks
  • Minimises payment and performance risks associated with international trade, as a bank guarantees performance or payment.

Widely recognised and accepted
  • These types of instruments are widely used and regarded as an acceptable means of risk control throughout the world for the sale of goods between traders in different countries.

Flexible structuring options
  • These types of instruments can be structured and tailored to meet your particular transaction and business needs.

Support business activities
  • Can be used to support purchases, sales, shipments, tenders, contracts and bank facilities.
  • Can also be used to source additional working capital or financial support.
Mitigating Foreign Exchange Risk
When negotiating the terms and conditions of a contract of sale, importers and exporters may need to deal in a currency other than AUD. Any customer with a commercial contract expressed in a foreign currency is exposed to Foreign Exchange Risk.

ANZ can help you manage your exchange risk with a range of foreign exchange solutions, including:

Foreign Currency Accounts
An account denominated in a major foreign currency can provide the benefit of a natural hedge through a mix of payables and receivables.

Forward Exchange Contracts
To provide protection against unfavourable currency movements, Forward Exchange Contracts provide for the purchase or sale of one currency against another where the rate of exchange is fixed at the time the contract is entered into for physical delivery at an agreed future date.

Foreign Currency Options
For added flexibility, Foreign Currency Options provide a fixed exchange rate for a future date that can be used if rates move unfavourably, but give you the option of using the prevailing spot rate for that date if exchange rates have moved favourably. For this right to choose, you will pay a premium at the outset.
Speak to us about the solution that is right for you. Contact your Relationship Manager or enquire online.