Author: Gordon Platt
Global Finance selects the leaders in a specialized area of finance that is benefiting from a surge in global trade.

Late last year, Deutsche Bank closed a $100 million syndicated insured receivables purchase facility for Sadia, one of Brazil’s largest exporters. In a display of German financial engineering, Deutsche Bank acted as lead arranger and agent for the complex facility, which brought together 16 European and Latin American banks as buyers of Sadia’s export receivables.

Sadia, a leading producer of poultry, meats and processed foods, will benefit from the arrangement by being able to increase its exports to a group of more than 130 buyers in 34 countries and to improve its sales terms to its best customers.

HSBC Bank and Fortis Capital acted as arrangers for the facility. ABN AMRO, Banco Santander Central Hispano’s New York branch and Banco Crédito del Perú participated as co-arrangers. Purchasers of the trade receivables are covered by a credit insurance policy provided through AIG Global Trade and Political Risk Insurance, a part of American International Group. The policy will cover up to 90% of the value of the receivables, and the banks will retain recourse to Sadia for the remaining portion.

The facility, which was increased from $55 million a year earlier, is structured as a one-year revolving credit. Sadia will periodically sell its portfolio of short-term export receivables, improving its financial and risk profile. Under the smaller facility in effect in 2003, Sadia was able to sell more than $380 million of export receivables over a 12-month period.

The transaction demonstrates some of the key ingredients that go into the recipe for a successful trade finance bank: innovative structuring, global reach, customized service and competitive pricing.

In its fifth annual survey of "The World’s Best Trade Finance Banks," Global Finance editors, with input from industry analysts, corporate executives and technology experts, chose the leading trade banks in 40 countries and five regions, as well as the best online trade finance provider.

The banks are playing a critical role as global trade continues to expand at a rapid pace. International trade has been growing by 6% to 7% annually for the past 20 years-nearly double the average growth rate of the world economy, according to Stephen S. Poloz, senior vice president and chief economist at Export Development Canada. "World economic growth is expected to moderate a little in 2005, but international trade growth should still be in the 7% to 8% range," he says.

As globalization continues, trade is penetrating the global economy more deeply, and future growth is more dependent on it, Poloz says.

Gordon Platt