Internal Risk Assessment Framework for Trade Finance Notes

Introduction

Our internal risk assessment framework evaluates the creditworthiness, structural integrity, and risk profile of trade finance notes before issuance. While we conduct a thorough review based on key risk factors, we do not provide investment advice, guarantees, or regulated credit ratings.

Buyers of trade finance notes are encouraged to perform independent due diligence, seek a third-party legal opinion, or request an independent credit rating from a regulated rating agency at their own expense.

How Our Internal Risk Assessment Works

We analyze multiple risk factors to assess the viability and risk level of trade finance notes. Our methodology covers key aspects of structured finance, supply chain financing, and asset-backed lending.



Counterparty Risk

• Creditworthiness of borrowers, trade partners, suppliers, and end buyers.
• Historical financial performance and track record in structured trade finance.
• Strength of contractual obligations, past payment performance, and compliance records.

Transaction Structure & Collateralization

• Type and quality of pledged collateral, including trade receivables, inventory, and warehouse receipts.
• Legal enforceability of security interests in relevant jurisdictions.
• Liquidity of pledged assets and expected recovery rates in default scenarios.

Trade & Market Risk

• Nature of underlying commodities, goods, and raw materials being financed.
• Exposure to price volatility, supply chain disruptions, and geopolitical risks.
• Foreign exchange risks, currency fluctuations, and market liquidity concerns.

Operational & Compliance Risk

• Adherence to AML (Anti-Money Laundering), KYC (Know Your Customer), and trade compliance requirements.
• Operational risks related to logistics, warehousing, and contract execution.
• Assessment of sanctions exposure, trade restrictions, and global regulatory compliance.

Repayment Mechanism & Self-Liquidation

• Source of repayment, including trade receivables, letters of credit, or purchase orders.
• Forecasted cash flow cycle and transaction alignment with loan duration.
• Structuring of self-liquidating trade finance notes to ensure proceeds are used directly for loan settlement.

Structuring & Risk Mitigation

• Use of trade credit insurance, performance guarantees, and risk-sharing mechanisms.
• Syndication options and structured participation agreements with institutional investors.
• Oversight through trustee mechanisms, escrow accounts, and multi-party governance structures.

Disclaimer & Liability Limitation

Our internal risk assessment does not replace independent financial, legal, or credit analysis. Evaluations are based on counterparty disclosures, due diligence reports, and market data available at the time of assessment. We do not guarantee the accuracy, completeness, or future performance of any trade finance note.

We assume no liability for investment losses, claims, or damages arising from reliance on our internal risk assessment. Investors should:

• Conduct independent financial and legal due diligence.
• Seek a third-party legal opinion to validate transaction security.
• Request a credit rating from a regulated rating agency at their expense.

Investing in trade finance notes involves capital risk, market exposure, and potential loss of investment. Participants must acknowledge the inherent risks associated with structured trade finance transactions.

Enhancing Transparency in Trade Finance Investments

Our internal risk assessment framework is designed to enhance transparency in trade finance investments, asset-backed lending, and supply chain finance. While we follow a disciplined approach to risk evaluation, the final investment decision and risk acceptance remain with the investor.

For further inquiries, investors may request additional information regarding our risk management methodologies, trade finance structuring, and compliance procedures.