Audio Conferences

  August 22, 2007 at 02:00PM ET

True or False? A well-crafted letter of credit ensures that suppliers who deliver agreed-upon goods in the agreed-upon timeframe will receive prompt payment in return.

If you don’t know the answer, it’s time for a review of letter of credit basics!

While a letter of credit may appear to be an absolute assurance that a bank will pay your customer’s debts should they run into financial trouble, what you’ve actually got is a very strict set of requirements you must meet to receive payment.

This common misconception has fooled many credit managers into thinking that they have credit protection only to have it fail just when it’s needed most!

The fact is, many credit managers receive only a basic orientation in letters of credit and are often left frustrated and confused when the letters of credit don't really work the way they thought.

You may be among them. Why not join IOMA and the Credit Research Foundation and learn the fundamentals of both commercial and standby letters of credit. Using real-life examples, you’ll get an in-depth understanding of the steps in the life of a letter of credit, what can go wrong, and how to avoid the most common and costly mistakes. You’ll also find out about new banking products like "silent confirmation" and services where letters of credit get paid in hours instead of weeks!

In just 90 minutes, you’ll learn:

• How banks determine whether or not to pay their letters of credit
• How to avoid discrepancies in letter of credit documents
• The circumstances under which bankruptcy of a customer can prevent payment of their letters of credit as preferential payment
• How to negotiate language that provides both solid protection and quick payment
• How the new UCP rules will affect your ability to get paid

Featured Faculty

Walter (Buddy) Baker
Vice President/Senior Representative, Financial Solutions
Atradius Trade Credit Insurance, Inc.

Walter (Buddy) Baker has over 25 years of experience in international trade finance. In September 2005 he joined Atradius Trade Credit Insurance, where he is responsible for assisting exporters and banks with structuring financing for export receivables. Headquartered in the Netherlands, Atradius is the second largest credit insurer in the world, covering over $500 billion in world trade each year. Prior to Atradius, Buddy’s career was on the banking side, most recently including 10 years with ABN AMRO Bank as Global Head of Technical Trade Advisory/Compliance.

Buddy is a recognized expert in trade finance, a long-time member of the National Letter of Credit Committee, and also serves on the Board of Directors of the Finance Credit and International Business Association (the FCIB) and as an adviser to the Institute for International Banking Law and Practice and to the Wolfsberg Group. He earned his undergraduate degree at Yale and his MBA at Northwestern.