Case Study: Six Confirmed DLCs For A Nigerian Importer

Case Study: Six Confirmed DLCs For A Nigerian Importer Completed In Five Months

Case Study: Six Confirmed DLCs For A Nigerian Importer Completed In Five Months

A Lagos based distributor needed six Documentary Letters of Credit to secure supply across food, energy, and industrial goods. Supplier panels rejected the local issuing bank without confirmation, and cash margin was tight. We structured, placed, and issued six DLCs with top tier confirming banks, mixed sight and UPAS terms, and a Delaware SPV that raised capital and took assignment of domestic receivables to support reimbursements.

Outcome: six DLCs issued and performed within five months, full seller acceptance, on time shipments, and a standing bank route for repeat trades.

Deal Snapshot

Total LC volume
~ USD 30.2 million across six DLCs, suppliers in US, Turkey, Argentina, China, India, and UAE
Tenors
Sight, 90 days UPAS, 120 days UPAS, 150 days UPAS, 180 days UPAS as per contract
Confirmation
All LCs advised and confirmed by banks accepted by each seller
Capital support
Delaware SPV raised working capital and took assignment of Nigerian receivables under a US law cash sweep

LC Portfolio Placed And Issued

No. Goods Trade Size Price Basis Tenor Confirmation Status
1 Hard Red Winter Wheat, 25,000 MT, US Gulf to Lagos USD 7.38m Approx. USD 295 per MT CFR UPAS 180 days EU confirming bank Shipped and paid at tenor
2 Cold Rolled Steel Coils, 5,000 MT, Turkey to Apapa USD 3.45m Approx. USD 690 per MT CFR UPAS 120 days EU confirming bank Shipped and reimbursed
3 Crude Degummed Soybean Oil, 10,000 MT, Argentina to Tin Can USD 10.50m Approx. USD 1,050 per MT CFR Sight DLC US confirming bank Paid at presentation
4 Solar PV Modules and Inverters, 12 MW, China to Onne USD 2.50m Modules ~ USD 0.18 per W UPAS 90 days, partial shipments allowed Asian confirming bank Three tranches completed
5 Pharmaceutical Generics, India to Lagos, MOH registered SKUs USD 3.20m CFR pricing per SKU, audited formulary Sight DLC with TCI policy EU confirming bank Documents cleared first time
6 Industrial Diesel Generators, 40 units 500 kVA, UAE to Apapa USD 3.20m Approx. USD 80,000 per unit CFR UPAS 150 days US confirming bank Delivered and reimbursed

Amounts and unit pricing reflect realistic market ranges for recent periods. Final prices depend on specs, laycans, and logistics. Suppliers required DLC or confirmed DLC due to country and counterparty risk policies.

Capital Structure Using A Delaware SPV

SPV formation and role
We formed a Delaware LLC as issuer of working capital notes. The Nigerian operating company sold domestic receivables to the SPV under a true sale, with UCC-1 filing and US law cash sweep.
Funding and collateral
Private credit provided a revolving facility to the SPV. Assigned receivables, a collection account control agreement, and trade credit insurance on key buyers supported advance rates. Proceeds funded LC reimbursement and partial cash margins when required.

Control Stack That Cleared Credit

Cash control
Assigned proceeds under DLCs and UPAS reimbursements to controlled accounts with a waterfall to the SPV lender and confirming banks.
Document discipline
LC wording aligned to UCP 600. Pre-checked drafts, inspection, Q&Q, latest shipment, and presentation lists to reduce refusals.
Risk transfer
Confirmation at seller’s bank of choice. Trade credit insurance on domestic sales to support the receivables assignment.
Compliance
Full KYC and sanctions screening for all parties, corridor approvals, and bank to bank RMA in place before issuance.

Five Month Execution Timeline

Month 1
SPV formed. Bank route agreed. First two LC drafts cleared. Confirmation lines reserved.
Month 2
LC 1 wheat and LC 2 steel issued. Documents checklist locked. First shipments scheduled.
Month 3
LC 3 soybean oil issued sight. LC 4 solar issued with partial shipment provisions.
Month 4
LC 5 pharma and LC 6 generators issued. Presentations for LC 3 paid at sight.
Month 5
UPAS reimbursements met via SPV cash sweep. All six trades closed on schedule.

Results

Metric Outcome
Supplier acceptance 100 percent, all DLCs confirmed by banks on seller panels
Issue speed Average 9 business days from clean draft to SWIFT MT700
Discrepancy rate Zero chargeable discrepancies, presentations pre-checked
Funding cost control UPAS priced off base with negotiated spreads; confirmation fees tiered by corridor
Working capital impact SPV revolver covered reimbursements and cash margins without choking operations

Why This Worked

  • We matched issuing, advising, and confirming banks to each supplier’s acceptance list.
  • Wording followed UCP 600 and each seller’s presentation habits, which cut amendments.
  • UPAS terms aligned with domestic cash conversion through the SPV receivables program.
  • Sanctions, KYC, and RMA were cleared upfront, so file movement did not stall at compliance.

Documents And Deliverables We Ran

Deliverable Purpose
Bank route memo and fee grids Named banks for issuance, advising, confirmation, and UPAS pricing clarity
LC draft pack per supplier Presentation list, expiry, latest shipment, inspection, reimbursement
SPV docs and controls Sale of receivables, UCC filings, account control, insurance endorsements
Closing calendar Shipment dates, inspector slots, SWIFT milestones, reimbursement windows

Need Confirmed DLCs And A Capital Plan

Send your supplier list, bank preferences, draft contracts, and delivery windows. We will return a bank route, LC wording, and a funding plan using a suitable SPV and receivables program.

Start the Process

This case study reflects a composite of real transaction features. Prices, fees, and bank selections vary by market, counterparties, and compliance outcomes. Any issuance is subject to KYC and AML checks, sanctions screening, independent credit approval, and executed documentation. SPV and receivables structures must comply with applicable laws in the United States and Nigeria.

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