Structured Trade Finance Case Study
SBLC Case Study: 20% First-Loss Capital and Unitranche Backfill
A commodity trading client headquartered in Thailand needed a standby letter of credit for a live transaction with a fixed execution window. The commercial deal was viable, but full collateral was not available at signing. The client could post 20% as first-loss capital and needed a funding structure for the balance.
Financely structured a two-layer solution: client first-loss capital at 20%, with a unitranche facility covering the remaining collateral requirement.
Economics were set as fixed interest plus a contractual profit-share, with repayment linked to the transaction cash cycle.
Transaction Snapshot
| Item |
Case Facts |
| Client Base |
Thailand |
| Need |
Standby Letter of Credit support for a time-sensitive commercial transaction |
| Constraint |
Client could not post full collateral at execution stage |
| Client Contribution |
20% first-loss capital |
| Funding Structure |
Unitranche backfill for remaining collateral requirement |
| Compensation Structure |
Fixed interest rate and agreed share of transaction profits |
| Process Focus |
Document consistency, risk allocation, and timing discipline |
Execution Notes
Credit Positioning
The first-loss tranche was clearly defined at mandate stage, which made risk allocation easier to present to funding counterparties.
Commercial Alignment
Fixed-rate debt plus profit-share created a balanced structure that reflected both downside protection and upside participation.
Documentation Discipline
Two rounds of document revisions were required before final lender-facing submission. Tight control of document versions kept the timeline intact.
Outcome
The client preserved transaction momentum and moved forward on an SBLC path without waiting to accumulate 100% cash collateral.
This case reflects a common market reality: execution often depends less on headline deal size and more on structure quality, repayment clarity, and disciplined process management.
Client Review
★★★★★
“We are based in Thailand and came to Financely with a real transaction and a real constraint. We needed SBLC support, but we could only commit 20% as first-loss capital at that time.
The team was clear from the start. They did not oversell outcomes. They focused on what could be structured, what had to be fixed in our file, and what terms were realistic for execution. The unitranche backfill approach gave us a workable path, and the fixed interest plus profit-share terms were commercially understandable.
The process was rigorous. We had to revise documents more than once, and that was the right call. By the time materials went out, they were consistent and financeable. Communication was precise, response times were strong, and each step had a clear owner.
For teams handling live commodity transactions in Asia, this was practical support that moved the deal forward.”
Managing Director, Commodity Trading Company, Thailand
Disclaimers
- Client names, counterparties, and transaction identifiers are withheld for confidentiality and compliance reasons.
- Certain commercial terms are summarized to protect private contractual information.
- This content is informational only and does not constitute legal, tax, investment, or accounting advice.
- Financely provides best-efforts advisory and structuring services. Funding, issuance, and closing outcomes are never guaranteed.
- All transactions are subject to underwriting, KYC, AML, sanctions screening, legal documentation, and third-party approvals.
- Past transaction experience does not guarantee future outcomes.
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