Corporate and Structured Finance
Sterling Bank secured a $40 million facility from Export-Import Bank Turkey
Corporate and Structured Finance
Sterling Bank secured a $40 million facility from Export-Import Bank Turkey
Corporate and Structured Finance
In recognition of its commitment to international trade finance and investment among individuals and institutions across the world, Sterling Bank recently secured a $40million facility from Export-Import Bank Turkey for both project and trade finance.
The facility was granted following the conclusion of due diligence on the bank, which affirmed it as a reputable financial institution with the capacity to meet its obligations and a worthy partner through which funds could be brought into the country for trade finance.
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With this development, members of the Turkish business community in Nigeria, as well as Nigerian businessmen and women doing business with Turkish partners, will have easy access to finance for their businesses, especially in the importation of raw materials for production, which would also serve as a catalyst for economic development of the country.
The Export Import Bank Turkey is a fully state-owned bank acting as the Turkish government’s major export incentive instrument. Export Import Bank Turkey, like its counterpart in Nigeria, has main objectives of promoting Turkish exports through diversification of exported goods and services by increasing the share of the country’s exporters in international trade.
The aim of the facility is to provide loans to Sterling Bank for import of Turkish goods on behalf of their customers (importers) from Turkey. In a prospective credit relationship, the Borrower of the facility will be Sterling Bank under the revolving loan agreement, Sterling Bank shall conclude a different sub-loan agreement with the local buyer since the default risk of the buyer will be undertaken by Sterling Bank.
Below are the Key Features of the Facility:
1. The facility can be used to finance both consumer and capital goods with Turkish origin.
2. Tenor: Capital Goods- Maximum of 10 years, Consumer Goods – Maximum of 2 years
3. Repayment: Bi-annual repayment of principal and interest. The repayment period shall be up to 2years for import of durable and non-durable consumer goods and up to 10years for import of capital goods.
4. For each trade finance transaction, an irrevocable and non-transferable letter of credit (L/C) shall be issued by Sterling Bank with a Turkish Commercial Bank in favour of the Turkish Exporter Company where Export Import Bank Turkey will be indicated as the reimbursing bank and authorized to reimburse up to 100% of the L/C amount (for loans with a tenor of less than 24months) or up to 85% of the L/C amount (for loans with a tenor of 24months or more) respectively.
5. Pricing is determined on a transaction basis.
Risk Premium: Export-Import Bank Turkey shall also charge the Turkish Exporter Company or the Borrower Bank with a risk premium. If risk premium is to be borne by the Turkish Exporter, such premium will be deducted by Exim Turkey out of each credit disbursement as a down payment.
6. The local buyer must have an account with Sterling Bank Plc.
Key Features of the Faculty
1. The facility can be used to finance both consumer and capital goods with Turkish origin.
2. Tenor: Capital Goods- Maximum of 10 years, Consumer Goods – Maximum of 2 years
3. Repayment: Bi-annual repayment of principal and interest. The repayment period shall be up to 2years for import of durable and non-durable consumer goods and up to 10years for import of capital goods.
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4. For each trade finance transaction, an irrevocable and non-transferable letter of credit (L/C) shall be issued by Sterling Bank with a Turkish Commercial Bank in favour of the Turkish Exporter Company where Export Import Bank Turkey will be indicated as the reimbursing bank and authorized to reimburse up to 100% of the L/C amount (for loans with a tenor of less than 24months) or up to 85% of the L/C amount (for loans with a tenor of 24months or more) respectively.
5. Pricing is determined on a transaction basis.
Risk Premium: Export-Import Bank Turkey shall also charge the Turkish Exporter Company or the Borrower Bank with a risk premium. If risk premium is to be borne by the Turkish Exporter, such premium will be deducted by Exim Turkey out of each credit disbursement as a down payment.
6. The local buyer must have an account with Sterling Bank Plc.
