- Side
- Issuing or confirming bank
- Exposure
- Bank and country risk
- Priced as
- Confirmation commission
- Tenor
- Sight or usance
Two banks, two different problems
The issuing bank has a client whose beneficiary will not take its paper unconfirmed — often because of the country rather than the bank. It needs a correspondent willing to add its undertaking, at a commission the client will wear, in time for the shipment.
The confirming bank has the opposite problem. Confirmation is attractive business — short-dated, self-liquidating, priced off a bank name — but it only works if you can see enough credits to pick the ones that fit your country and obligor limits this quarter.
Financial institutions can leverage the platform for originating FI trade deals like LC confirmation from banks globally. The issuing bank posts what it needs confirmed; correspondent banks with appetite for that name bid.
The shape of the flow
Bank to bank: the issuing bank needs a correspondent willing to put its own name on the credit, in a market where the beneficiary will accept it.
How it works on TradeOrigin
A bank-to-bank flow, with the bidding sealed so appetite is not signalled to competitors.
Post the credit for confirmation
Issuing bank, country, amount, tenor, expiry and documents — everything a correspondent needs to size the exposure against its limits.
Correspondents bid the commission
Banks with room for that name quote, without seeing each other. Declining costs nothing and signals nothing.
Accept and add the confirmation
The mandate and the agreed commission are recorded, and the confirmation is added on those terms.
Run to reimbursement
Presentation, settlement and reimbursement between the two banks sit on the same record with a full audit trail.
Who it is for
Serving a client abroad
Your client’s beneficiary demands confirmation and your usual correspondent is full on that country.
Deploying country appetite
You have room on a name others do not, and confirmation is fee income against a short, self-liquidating exposure.
Widening the network
Every bid is a working relationship with a bank you may not have dealt with before.
What you get
Reach beyond your usual correspondents
The banks with appetite for a given country are not always the ones already on your list.
Appetite stays private
Sealed bids mean declining, or pricing wide, tells the market nothing about your limits.
Assets that fit the book
Short-dated bank risk with a defined maturity, easy to slot inside a country limit.
One record between two banks
Terms, presentation and reimbursement in one place rather than across two operations teams’ inboxes.
What the bank will ask for
Uploaded once, against the deal, and visible only to the counterparties on it.
Questions
Can we confirm silently?
The commercial terms you agree with the other bank are what the platform carries. Whether the confirmation is advised through the issuing bank or arranged silently is between you.
Does this replace our correspondent agreements?
No. Existing relationships and agreements stand. The platform is where a credit finds a bank with appetite, and where the deal is then run.
Can a corporate see our bid?
Only the party you are bidding to. Bids are sealed from other banks throughout.
Related
LC Discounting (FI)
Buy or place accepted LC paper between banks, priced as bank risk on a known maturity.
Bank to bankConfirmation & Discounting (FI)
Confirm and fund another bank’s credit in one mandate — one exposure, one price, one correspondent.
ProductCounter Guarantee
A bank’s guarantee to a second bank, so the second bank can issue locally where the beneficiary needs it.