IFA AGM and Conference
Tuesday 6th September 2011
14:00  Opening of the Educational Seminar
 What is forfaiting?
- Definition
- Forfaiting versus factoring - some similarities, many differences
- Comparison with other commercial funding markets - commercial paper, bonds, corporate loans etc
 - Which banks and forfaiting houses have forfaiting operations?  Market participants - members of IFA.  Types of participant, traders, lending banks, banks with country expertise, domestic banks with significant market shares among local medium and large businesses eg large British, French, German and Italian banks.
- Trade-related versus financial paper - the pros & contras
- "Introduction to the Primary Forfaiting Market" and the "IFA Guidelines" - a well-governed market.
15:30  Coffee break
 Why use forfaiting?

- What are the advantages and disadvantages to exporters and importers of using forfaiting?
Exporters - advantages:  selling to riskier markets / selling on credit / ability to offer finance / flexibility towards customer's circumstances / payment upon shipment / avoiding becoming the customer's banker / forfaiter's commitment in advance of shipment /  relative ease of dealing with a commercial market rather than an export credit agency / sourcing from more than one market / 100% finance.
Exporters - disadvantages:  Having to deal with banks / having to get to grips with esoteric forfaiting jargon, calculation and market / perceived risk as compared with dealing with one's clearing bank / payment of fees 
Importers - advantages:  extended credit terms to match cash flow, gaining credit outside conventional credit lines, configuring transaction to suit needs, perhaps tax driven structures for example.
Importers - disadvantages:  Having to deal with banks / having to get to grips with esoteric forfaiting jargon, calculation and market / perceived risk as compared with dealing with one's clearing bank / payment of fees. 

 - Why do banks get involved in forfaiting? 
To earn fees and commissions / to earn trading margin / to diversify risk / to harness skills such as emerging market knowledge, trade finance expertise, treasury skills / to earn a lending margin / to add a liquid asset class to bank's over all spread of business lines / to provide value added services to their customers alongside lower return business such as corporate lending.
 Risk assessment [Case Study]

 A wide range of risks may impinge on a forfaiting transaction to a greater or  lesser degree.  Risks could include one, two or several of:

Commerical risk - corporate risk of non-payment
Political risk - country risk
Performance risk - exporter / importer / guarantor / counterparty risk
Commodity risk - risk of price change in underlying traded goods
Shipment risk - risk to goods in transit
Documentary risk - poor, incomplete or fraudulent documents
Pricing risk - that exporters and/or forfaiters mis-price a (worsening) risk
Currency risk - for exporters / importers / forfaiters
Interest rate risk - for forfaiters
Bank risk - banks can default, fail or make mistakes too...
18:00  End of Day 1
20:00  Seminar dinner

Wednesday 7th September 2011
09:00   Forfaiting and emerging markets [Case Study]
               Why invest in emerging markets?
               Trade finance and emerging markets
               Another asset class for investors
               A look at what forfaiters are currently offering to buy - regions and duration
               Opportunities for banks with emerging markets risk-taking capacity 
            Techniques [Case Study]
              Basic data required
               Calculating cash flows: principal & interest calculations
               Bullet, amortizing and adjusted repayments
               Fixed & floating interest
               When to use straight discount & discount to yield
               How discounts are calculated
               Software - 3 systems CMG Rohirst / ZP Software / GML
10:15   Coffee break
10:30   Primary and secondary markets
            Advantages and disadvantages
             Documentation [Case Study]
            "Introduction to the Primary Forfaiting Market"
            The "IFA Guidelines"
            Bills of exchange and promissory notes / typical forms / variations / holders and endorsements / legal jurisdictions / Bill of Exchange Act vs Geneva convention
            Letters of credit - different types
            UCP500 & e-UCP
            Bank guarantees
            Transport documents bills of lading, AWB, combined transport documents
            Invoices, packing lists - corroborating documentation
            Payment confirmation
11:30   Settlement
            Subject to documentation 
            Payment under reserve
            Portfolio management considerations (brief overview)
            Lines & limits
            Trading and holding
            Portfolio churning
            Short, medium and long term investments
            Capital considerations for banks (Brief overview)
            Use of capital
            Basle I & II
            Risk asset weighting
            Provisions and bad debts
12:30   The future
            Summary of what forfaiting is about today
            What forfaiting can become in future ...
            Inclusiveness:  pre-financing, factoring, I/cs, standard forfaiting, export credits and other capital markets instruments
            Standardisation of documentation
            Secure transmission of documents - Bolero
            Central counterparty / clearing
            Forfaiting as a flexible, versatile market to sit alongside other corporate funding sources
13:00   Buffet Lunch