What is Structured Trade Finance?

Structured trade finance (STF), a type of debt finance, is used as an alternative to conventional lending. This form of finance is utilized regularly in developing countries, as well as, in relation to cross border transactions. The objective is to encourage trade by making use of non-standard security. STF is generally used in high-value transactions in bilateral trading relationships. As a more complicated type of finance, STF is commonly related to commodity trading.

 

Within the commodity sector, STF products are most prevalent. It is used by producers, processors, traders, as well as, end-users. These financial arrangements are tailored by banking organizations to meet the precise needs of the clients. STF products are primarily working capital financing, warehouse financing and pre-export financing. There are also some institutions that extend reserve-based lending, as well as, finance the conversion of raw materials into products, along with other customized finance products. In order to promote trading activities, STF products are extended across the supply chain.

 

STF structures are sponsored by limited recourse trade finance lines. The structure aims at offering better security mechanism and to act as an enhancement on the position of the borrower when viewed in isolation.

 

How Has Technological Advancements Complemented STF?

Trade credit insurance, bank assurances, letters of credit, factoring and forfaiting are some of the STF products that have been positively affected by the latest technological advancements. These products have changed due the recent developments. The massive progress in communication and information domains has also helped the banking institutions to track the physical risks and events in the supply chain between the exporter and the importer.

 

Why are STF Facilities Used?

Structured trade finance products are used so that the risks related to trading in specific country and different jurisdictions can be mitigated. Any transaction together with STF products help to add resilience to the trade and the same cannot be said when looking at financing the individual elements of a trade. Moreover, it allows for lengthening the payment time, strategizing procurement, diversifying funding and enhancing the ability for clients to boost the facility sizes.

 

What makes STF extremely attractive is that the borrower’s strength in the transaction is not scrutinized as closely as compared to a vanilla loan. Here, the focus is more on the structure and the underlying cash flows. Another reason for STF’s popularity is that the transactions are not reflected in the balance sheet of a company and the presence of this financing option has helped several importers to maintain flexible credit terms with exporters.

 

In recent years, structured trade finance products coupled with the recent advances in technology are considered as the fundamental reasons for the increasing volumes of international trade. Structured trade finance supports 1/3rd of the global trade activities. It encourages the free flow of capital goods and commodities from one country to another. It is used primarily in the commodity sector.

 

CL King & Associates provides investment banking, equity research, sales and trading, and investor services to corporations and institutions. We co-manage bond offerings, IPOs, follow-ons, secondaries, convertibles, and preferred. In addition, we transact directly in the capital markets on behalf of corporations through our Corporate Services business focused on share repurchase and continuous share offerings (“ATMs”).

 

Also read: Emerging Stock Market Determines The Healthy Corporate Financing

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Role of Corporate Finance in a Fiscal System

The sector of finance wherein all the fiscal decisions are taken by conglomerates is called as corporate finance. It also includes the tools and analysis required to formulate such decisions. Corporate finance is majorly involved in capitalizing the business value at the same time as to lessening the fiscal jeopardy of the corporation.

 

Most frequently, the term “Corporate finance” has also been associated with investment banking. Corporate finance may be broadly categorized into long-term and short-term decisions and methods.

 

Under corporate finance, capital investment resolutions are long-term company investment decisions concerning fixed properties and assets arrangement. All the decisions are established on a number of unified standards. Such projects are required to be invested correctly. Hence capital investment decisions consist of an asset resolution, an investment resolution, and a payment resolution.

 

To meet the objective of corporate finance, it’s very important to finance the corporate investment correctly. Usually, the foundation of investment consists of a number of mishmash of liability and equity. If a project is financed through debt, it leads in a liability which requires to be examined. For this reason, there are chances of cash flow repercussions despite the achievement of the project.

 

Moreover, the organization must also try to equate the investment merge with the asset being financed as intimately as achievable, in both cases of timing and money courses. The payment is primarily estimated on the source of the company’s inapt income and its business scenario for the upcoming year. This is a common event, nevertheless there are exclusions.

 

CL King provide investment banking, equity research, sales and trading, and investor services to corporations and institutions. We co-manage bond offerings, IPOs, follow-ons, secondaries, convertibles, and preferred. In addition, we transact directly in the capital markets on behalf of corporations through our Corporate Services business focused on share repurchase and continuous share offerings (“ATMs”).

 

To learn more, please visit here: http://www.clking.com/about/

Try Overseas Banking if You are Tired of Small Returns

Free offshore banking is not a new concept. However, the main idea is to entice foreign investors to deposit their money in an offshore bank. This works well for both the offshore bank and the investor. The offshore bank gets more funds to put in its holdings and the investor gets to take advantage of the many benefits of offshore banking. The benefits of a free offshore bank account can be higher returns, more safety and protection with their transactions, and access to many foreign investment options. Therefore, this can be a very nice option for investors to use overseas banking.

With this said, an individual investor should exercise due diligence when looking at an offshore banks promising free offshore banking. Ideally, one should determine if they are trying to make up this cost in some other way like other “maintenance fees” or whether this is a result of a bank in an unstable jurisdiction. This instability could be either political or financial. For this reason, you should take your time reading the fine print for such offers and use the advice of experienced offshore financial advisers to find out whether the bank is offering you a good deal for your money and your investments. Many times these financial advisers can be found by doing a simple search on the Internet. In an adviser, you are looking for experience in overseas banking that spans several different jurisdictions and also a slew of satisfied clients. A good financial adviser is a great aid in finding the better offshore banks offering free offshore banking.

 

In addition, some people find that paying a small amount to start an account works better than using a free offshore bank account. However, opinions vary on this topic. Regardless of which bank you choose, the best advice is to do your due diligence to find the best one for your investing strategy.

 

Free Offshore Banking can be a great enticement for many investors. With all the benefits that overseas banking offers, we strongly recommend you look into them further regardless of whether you choose to go with a free offshore bank account or to pay a nominal fee.

 

If you still have queries about how to proceed with your investment goals then contact at 518.447.8050 and talk to our experts at CL King and Associates.

Also read: CL King Corporate Finance Strategies for Small Businesses

Are You Building Equity or Income in Your Business?

When considering an exit from your business, you need to ask yourself whether you are focused on building an income stream within your business, or whether you are building equity in the business. The difference between these two opposing perspectives will reveal itself when your turn comes to exit your business.

An owner who builds their business for income has a job. An owner who builds their business for equity has an investment. One day someone other than yourself will be running your business. Will that successor be purchasing a job from you or an enterprise? Your eventual buyer or successor will likely be interested in knowing about the equity that you have built, not about the income that you have achieved within your business. And, as the exiting owner, you want to speak in terms of equity and not in terms of income. You see, income can vary according to the personal needs of the owner-operator. However, equity can be expanded and value can be driven into your business once your focus moves to an ‘equity driven’ model.

Technically, ‘equity’ is a Balance Sheet term which is equal to your assets less your liabilities; this would reveal your owner’s equity. However, we are not discussing the financial reporting within your business, we are discussing the manner in which you make operational decisions to increase the value of your business.

For example. Jim owns a distribution company and spends most of his time focusing on building strategic relationships to increase sales, as well as increasing the capacity of his business to distribute more products. Sounds simple enough. However, Jim’s mindset is towards conducting these activities so that he can take a larger salary and bonus at the end of the year. Again, to most reading this newsletter, that sounds like a very reasonable objective. But there is a problem, a very predictable and obvious problem once Jim is aware of it.

The problem is that Jim is not spending any time considering who would be doing his ‘job’ at the company in his absence. True, the company can run for a week or two as Jim takes his vacations. Perhaps the business could even sustain for a few months if Jim were to want time off or had a physical problem that prevented him from working – these instances alone would not materially affect Jim’s income. However Jim is not protecting the equity in his business with his decision making process. Jim’s equity, and hence his illiquid business wealth, is at risk because Jim has not focused on his business as an investment.

What Jim needs to do in this case is begin to ask the important and crystallizing questions that will define how he exits his business. Jim needs to know ‘who will run the business after him’. But in order to get to that point, Jim needs to have some idea as to what his exit options are and which one is optimal for his situation.

For example, Jim may want his management team to take over the business. Well, Jim’s succession plan will need to include specific action items and benchmarks for transferring responsibility within his firm. The decisions that Jim makes in his business today, will need to be aligned with his choice of exit in order to maximize the equity within his business for his personal needs. Jim should communicate with his management team his desire to transfer operational control and begin to put measures in place to start this shift. Jim should take his future rain-maker to the meetings with his strategic partners, take his financial person to the meeting with the bank, and allow his operational person to set policies and speak with authority to others in the organization.

When Jim begins to make these changes to his behavior and the manner in which the business is run, he starts to build on the equity in his business because he is treating the business more of an investment and less as a job. Jim’s role converts to that of an overseer of the activities within his organization, not the creator of those activities. As a result, over time Jim’s presence will no longer be critical to the proper running of the business.

At this point in time, the focus on the business – as an entity separate and distinct from Jim’s personal desire for more income – and the running of the business with a process in place- Jim is increasing the value of his business. Jim’s value is increased because all business valuation is a prophecy of future cash flows. Now Jim can more confidently state that his future cash flows are more secure because his management team has decision-making authority and Jim has protected the ongoing streams of income and cash flow against his own short-comings and/or mortality. As a consequence, the value of the business increases because a buyer or successor has a higher certainty as to the ability to achieve future cash flows in Jim’s absence.

Owners who fail to make these important decisions leave the value of their business in a very uncertain state. Unfortunately, far too many business owners today are in this position. Also, compounding this problem is the fact that these changes can take time (often times many years) to occur within an organization. Therefore, the time is NOW to begin this process.

If you have any query then consults with the experts at CL King and Associates. CL King provides investment banking, equity research, sales and trading, and investor services to corporations and institutions.

If you want to learn more, please visit here: http://www.clking.com/

Investment Banking to Raise Large Sums of Money!

Heard about an investment bank? Well, when you are looking for the big money sources-the kinds of financing that can make a small business big- this is the type of outfit that can put you in touch with all the big-league players.

For, behind the national network of main street bankers doing business in thousands of local branches, there is another layer of American banks that few ever see or hear about. It is the quiet, conservative and complex world of investment banking.

Here, without checking accounts, savings plans or credit cards, most of the biggest financing deals are planned and implemented. Investment banks do not serve consumers. They are specialists in the needs of commerce and industry. Although they are often associated with the huge corporations of the Fortune 500, most serve a wide range of clients.

Investment banks like CL King and Associates can, in fact, be of immense value to you as a small company owner by helping you secure extraordinary amounts of long-term financing. This indeed is the “free enterprise private loan pipeline” in its most classic form.

In your relationship with investment bankers, you pay them an annual retainer fee in exchange for a set schedule of services. Although the fee is steep, companies committed to long-term growth will likely find it a worthy investment. Investment bankers can help your company establish credibility with the most lucrative loan sources.

As an owner-manager, you may also work with investment bankers on a project-by-project basis. When your company’s rapid expansion calls for an infusion of large amounts of capital, it should be in your best interest to simply call on the investment bank to help raise the needed funds.

Also read: The Biggest Mistake You Can Make for Raising Capital

Investment Banking Analysts

When people have a problem involving raising capital, who would they consult? Yes, they would go and check with their investment banking analyst. People who are highly fascinated with the investment banking world would be at an advantage if they would actually prepare themselves for a career as possible analysts. Investment banking analysts are normally Bachelor-degree holders or undergraduates. In reality, these undergraduates typically work for a length of around two or maybe even three years before they do this. Before one could even think of becoming an investment banking analyst, they should first finish their Bachelor’s degree studies and also experience a summer internship prior to their senior year in college. The primary reason for this suggestion is due to the fact that a lot of recruiters employ investment banking analysts who once interned for their organization.

 

Those who want to become an investment banking analyst should be someone who actually takes pleasure in using a computer. This is because it is usual for these analysts to spend most of their hours at the said technology. What they actually do is they have cordial relationships with traditional and non-traditional financial sources that would be able to help their clients determine which one is ideal for the clients’ situation as well as their needs. These investment bankers could also assist people with raising equity, deal structure, and negotiations.

 

These analysts also often work at their homes and they even pull all-nighters when it is absolutely necessary. Some of their duties involve creating comps, editing pitchbooks, and building models. The more experienced analysts could even put together pitchbooks and still, there are others who could work their way into those exciting responsibilities like a live transaction type meeting. The analysts’ job details could definitely differ but one thing is guaranteed, their hours are normally long as well as tiring. One’s day might start at 9 in the morning and it could very well end way past midnight, although there are some days that could be considered slow.

 

Investment banking analysts should be highly proficient with Excel spreadsheets, Bloomberg, Word and PowerPoint as well as be familiar with writing VBA macros. They should also know how to make prospectuses, generate as well as track regular newsletters (or weeklies), get pitch books, run errands, keep schedules, and answer client phone calls, among others. Analysts should be hardworking, thorough, reliable and flexible. Some great tips to become a good analyst is to learn about the market and the finance industry, keep abreast of the business and financial news, start early, and always love the job.

 

After the analysts have worked for either two or three years, they might now want to pursue their MBA degrees and might or might not even return to the investment banking industry. Those former analysts that have gotten MBA degrees would have the clear-cut edge over others who have not actually worked in this particular field. Simply put, being a true-blue investment banking analyst is similar to proudly earning one’s stripes in the financial industry.

 

CL King and Associates is a full-service investment bank and self-clearing broker-dealer founded in 1972. At CL King and Associates, we enjoy a strong sense of pride and teamwork. Committed to professional development, CL King nourishes the strength of its dedicated team members.

 

Recent MBA graduates or MBA candidates looking for internship opportunities in financial services can submit their resume to mrm.employment@clking.com.
For more info, please visit here: http://www.clking.com/about/careers/

Investment Banks like CL King for Mergers and Acquisitions

The field of investment banking has changed faces drastically over the years. Initially the functions of banks and banking institutions with regard to this type of banking was clear cut but today, there is a blurry line between investment banking and other forms of banking. However investment banking has taken a dominant role in the financial, business and banking industry due to the fact that more and more businesses are seeking to undergo mergers and acquisitions to increase the their net worth. Today banks are not the only institutions that are engaged in these functions, private equity and venture capital firms are largely concerned with these tasks as well.

 

Under the corporate finance functions of an investment banking firm like C.L. King, clients are advised on how to raise funds if they want to engage in a merger or an acquisitions. For private equity investors and venture capitalists the advice they get from those who are concerned with this type of banking enables them to make the right decisions. Corporate finance is a function that has notably flourished over the years and has caused investment banking to become one of the most fundamental drivers of the money-market. The large multinational companies as well as the medium scale companies that are seeking funding for acquisitions can do so through making their company stocks public, that is making an initial public offering or they can seek the help of an investment banking institution in the trading of their shares in the stock market.

 

An important function of investment firm when it comes to mergers and acquisitions is the market analysis that these firms undertake for their clients. The procedures that are involved in mergers and acquisitions are largely dependent on market factors and complex dynamics in the money market; companies thus get invaluable advice on the suitable time to make their move in either merging with another company or acquiring another entity that they are interest in.

 

C.L. King & Associates is a full-service investment bank and self-clearing broker-dealer founded in 1972. We provide investment banking, equity research, sales and trading, and investor services to corporations and institutions.

Initial Public Offering – Advantages and Challenges

There are many reasons why the owners of the private companies are willing to go through the vigorous IPO exercise to get their company listed in the stock exchange. While monetary gains are mostly the expectations, let us explore the other advantages and disadvantages a public listed company may have:

Advantages of IPO

1. Better market value: The valuation of a public listed company is generally higher than a private-owned company. This is because of the readily available company information for the general public to ascertain the value.

2. Improved company image: Given the right marketing and positioning strategy, the company’s image can improve tremendously once it is public listed, in the area of branding and confidence level to many stakeholders.

3. Human assets: The company is able to attract and retain its good employees through schemes like share options and career advancements.

4. Acquisition: A public listed company can use it’s publicly traded shares as payment to acquire other businesses.

5. Collaterals: The shareholders may pledge their shares to financial institutions as collaterals for certain financing activities, either for the company or personal. The financial institutions are able to accept these shares as collateral because if their nature of being publicly traded.

6. Improved liquidity to the shareholders: If at any point (after the moratorium period), that the shareholders needed liquidity for their personal purposes, they can easily sell down they shares are the stock exchange.

Challenges

1. Transparency: Due to the mandatory reporting requirements where extensive information must be disclosed publicly, there could be business sensitive information that will be made available to customers, competitors and employees.

2. Vulnerable to takeovers: With the shares of the company being publicly traded, the shareholder’s ability to control their ownership on the company is reduced, and being exposed to threats of unsolicited takeovers.

3. Pressure: There are many performance pressures associated with a public listed company, due to the fact that many information are made public within a very short span of time for the investors to ensure timely decision making. Therefore, it is normal to expect pressure on the sales and financial reporting in all public listed companies as their reporting deadlines are very periodic, i.e. quarterly, half-yearly and annually.

For more information consult with the experts at CL King
C.L. King has worked as a Co-Manager for Bond Offering, Subordinated Notes Offering, Notes Offering and many more for the reputed firms such as Citigroup, Walmart, AT&T’s etc. We transact directly in the capital markets on behalf of corporations through our Corporate Services business focused on share repurchase and continuous share offerings (“ATMs”).

Also read: How to Choose Investments That Pay Off?

Top Rated Investment Bonds

Your typical independent investor will never be able to understand every aspect of bond investing. Research on bonds fills volumes. It is for this reason, therefore, that you do as much research as you can prior to investing, and if you can, take advantage of professional investors that can manage a portfolio for you.

 

1. Bond Ratings

Not all stocks are created equal – some are a strong buy whereas others are holds or sells. Bond ratings get assigned over 20 different possible designations, from AAA (Highest Grade) to C (May Be In Default) or worse. Also, those designations are backed by some of the most thorough historical and technical research on the planet.

 

2. High Predictability Makes A Safe Investment

Bonds always have an associated interest rate and a set maturity date. This makes bonds more predictable. Those two factors alone makes possible the use of an array of mathematical tools to provide predictions of future yields and price with a confidence unmatched by any other investment.

 

3. AAA Bonds

The absolute best quality of bonds are ones that are rated AAA. They carry the smallest degree of investment risk, and thus, the least amount of reward. Interest payments are typically protected by a large or exceptionally stable margin and the principal is believed secure.

 

4. BAA Bonds

These are medium grade bonds and as such they are neither highly protected nor yield a very high amount of return on your investment. BAA rated bonds are considered medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security are thought adequate at the time the rating is made, but might prove unreliable in the long run.

 

5. B Bonds

Bonds with B rating are generally considered speculative. Interest and principal payments are not assured. In other words, invest at your own risk. In general, bonds with higher ratings tend to have lower yields, so B bonds can actually give you a higher return on your investment. In 1991, for example, those who gambled on lower rated bonds reaped the highest total returns.

 

6. Are Bonds Better Than Stocks?

Even at the lowest end of the scale, bonds outpace quite a few stocks. Of course, this is all averaged out, and some stocks do much better than even the highest bonds. Bonds also have a large minimum investment in capital – $5,000 dollars, and so aren’t for your entry-level investor.

 

C.L. King is a investment bank and self-clearing broker-dealer. The company has co-managed Bond Offering for many reputed firms like Charter Communications, Virginia Electric and Power Company’s (VEPCO), Florida Power & Light and many more.

The Benefits of Corporate Bonds

Corporate bonds are issued by both public and private companies. When an investor purchases this type of bond, in effect, the investor is lending money to the company. Companies use this money to purchase necessary items or pursue business expansion. In return for investors investing money, the company pays investors a predetermined rate of interest. On the date that the bond matures, the company gives the investor the money back plus interest. Some of the benefits of this type of investment include the following.

 

Excellent Yields

Corporate bonds often offer much higher yields than other types of bonds. Granted, there are also higher risks. The higher level of risk is definitely something that the investor must take into account. However, if the investor can tolerate more risk, they can be an excellent investment opportunity.

 

Steady Income and Ease of Knowing Risk

If you seek income that is steady and if you are interested in preserving the principal, these company bonds offer a good opportunity to do that. Also, they are usually rated based on the credit history of the company and the company’s ability to repay its obligations. The higher the rating, the safer a corporate bond is likely to be. It is an easy matter for investors to know how high a rating is. Thus, in this way, an investor can know exactly how much risk he or she is taking during the investment process.

 

Diversity of Investment

Those interested in investing in corporate bonds can choose to invest in various sectors. The investor need not limit himself or herself to one investment sector. This is helpful because diversification can be a good way to reduce the risk of investing in this type of bonds.

 

Liquidity

In the event that an investor decides to sell a bond before it matures, the investor can usually sell the bond quickly because of the large size and liquidity of the corporate bond market. The fact that an investor can sell quickly makes it comparatively safer to purchase corporate bonds. This makes corporate bonds a good investment opportunity

 

If you are looking for financial services to help you manage your wealth, assets, make investments for you, contact C.L. King financial services.

The firm founded in 1972 provides investment banking, equity research, sales and trading, offshore and investor services to corporations and institutions. C.L. King co-manages bond offerings, IPOs, follow-ons, secondaries, convertibles, and preferred.

Read also: Why Set Up An Offshore Bank Account?