hsbc bank usa, n.a. trade and supply chain

HSBC Bank USA, N.A.Trade and Supply Chain

International Payment MethodsPrepared For:

Global Supply Chain

Management Conference

HSBC OVERVIEW

3 |

HSBC Group – Global Network

Armenia 10Austria 1Belgium 2Channel Islands 35Cyprus 1Czech Republic 3France 440Georgia 1Germany 13Greece 27Hungary 11Ireland 14Isle of Man 8Italy 3Luxembourg 4Malta 54Monaco 2Netherlands 1Poland 17Russia 6Slovakia 4Spain 4Sweden 3Switzerland 18Turkey 304United Kingdom 1,654

Australia 34Bangladesh 9Brunei Darussalam 12China 124Hong Kong SpecialAdministrative Region 334India 72Indonesia 90Japan 10Kazakhstan 2Korea, Republic of 15Macau SpecialAdministrative Region 6Malaysia 48Maldives 1New Zealand 10Pakistan 9Philippines 26Singapore 26Sri Lanka 15Taiwan 55Thailand 1Vietnam 4

Argentina 247Bahamas 8Bermuda 15Brazil 1,673British Virgin Islands 3Canada 299Cayman Islands 13Chile 2Colombia 33Costa Rica 40El Salvador 84Honduras 86Mexico 1,625Nicaragua 3Panama 83Paraguay 6Peru 11United Statesof America 1,627Uruguay 5Venezuela 1

Algeria 2Bahrain 6Egypt 55Iran 1Iraq 13Israel 3Jordan 3Kuwait 1Lebanon 6Libya 2Mauritius 12Oman 6PalestinianAutonomous Area 1Qatar 7Saudi Arabia 86South Africa 5United Arab Emirates 18

Services are provided by about 9,500 offices in 85 countries and territoriesAssociated companies are included in the network of officesAs of August 4, 2008

Europe Offices Asia-Pacific Offices Americas Offices Middle East/Africa Offices

Global Network supporting our clients and their suppliers

Largest Asian Branch Network

Local Decision Making

Trade legacy dating back to 1865

Local Customer and Marketing support

Largest foreign bank in Canada (7th of all) 299 offices with over 6,000 employees Fully integrated corporate, investment banking,

and global markets platform

Canada

United States One of the largest financial institution in the US

with 53,000 employees Fully integrated corporate, investment banking,

and global markets platform > 400 bank branches & > 1,300 Consumer

branches in 48 states

Mexico 3rd Largest bank in Mexico 1,625 bank branches,

4500 ATMs. Full range of services

HSBC GroupStrength in North America – full coverage in all three markets

Mexico

USA

Canada

Other North America 15 branches in Bermuda, 8 in the Bahamas, 3 in

BVI, and 13 in the Cayman Islands

4 |

El Salvador: 84 offices / branches Honduras: 86 offices / branches Costa Rica: 40 offices / branches Nicaragua: 3 office / branch Panama: 83 offices / branches

Central America.

Brazil 4th largest branch network with 1,673 branches /

5,000 ATMS, with Banistmo + 1,690 branches Assets of USD 10Bn and largest consumer

finance company with 14M customers

Remaining South America Peru: 11 offices / branches Chile: 2 offices / branches Uruguay: 5 offices / branches Columbia: 33 offices / branches Venezuela: 1 office / branch

Argentina 6th largest bank, 247 offices and branches and

largest insurance company

Mexico

El Salvador

Honduras

Nicaragua

Costa Rica

Panama

Columbia

Peru

Paraguay

Chile

Argentina

Uruguay

Brazil

Venezuela

HSBC GroupStrength in South and Central America – full coverage in key economies

5 |

Spain

Malta

Armenia

Turkey

RussiaSweden

Ireland

UK

France

Poland

Italy

Germany

Netherlands

Greece

Belgium

Switzerland

Czech Republic

Spain

Malta

Armenia

Turkey

RussiaSweden

Ireland

UK

France

Poland

Italy

Germany

Netherlands

Greece

Belgium

Switzerland

Czech Republic

HSBC GroupStrength in Europe – full coverage in key economies

Armenia 10Austria 1Belgium 2Channel Islands 35Cyprus 1Czech Rep. 3France 440Germany 13Georgia 1Greece 27Hungary 11Ireland 14Isle of Man 8Italy 3Luxembourg 4Malta 54Monaco 2Netherlands 1Poland 17Russia 6Slovakia 4Spain 4Sweden 3Switzerland 18Turkey 304United Kingdom 1,654

Strength in all three of Europe’s major economies—leader in the

UK & France

Number of offices/ branches

6 |

ChinaPakistan

India

Sri Lanka

Bangladesh

Mauritius New Zealand

Australia

Indonesia

Brunei

Philippines

JapanKorea

Taiwan

Singapore

Malaysia

Thailand

VietnamMacau

HK

HSBC GroupStrength in Asia – unparalleled coverage and capabilities

Australia 34 Bangladesh 9 Brunei Darussalam 12 China 124Hong Kong SAR 334India 72 Indonesia 90 Japan 10 Kazakhstan 2 Korea, Republic of 15 Macau SAR 6 Malaysia 48 Maldives 1 New Zealand 10 Pakistan 9 Philippines 26 Singapore 26 Sri Lanka 15 Taiwan 55 Thailand 1 Vietnam 4

Strength in all Asian Economies – leader in HK and leading foreign

bank in China and India

Number of offices/ branches

7 |

HSBC GroupStrength in the Middle East– growth through acquisition

8 |

True Local Presence

Acquistions Strengthen HSBC’s Offering

Long-Standing Correspondent Relationships

Lebanon

Egypt

OmanUAE

Iran

Qatar

JordanIsrael

Saudi Arabia

Kuwait

Turkey

Bahrain

Iraq

HSBC has experience dealing with the Middle East since 1889. Since then, our correspondent and subsidiary network have expanded extensively.

HSBC Amanah trade products support the increasing demand for Islamic banking; tailored to the needs of customers who conduct operations according to Shariah principles

A 40% stake in Saudi British Bank A 46.5% stake in British Arab Commercial Bank

(BACB) HSBC-Bank Egypt merger (94.5% HSBC Stake) A 70% purchase of Dar Es Salaam Investment Bank in

Iraq

Correspondent relationships with over 150 local and international banks

MAJOR RISKS

10 |

Major Risks

► Political Risk War, civil disturbance, or revolution Expropriation Inconvertibility of local currency into dollars or other hard currency. (Transfer Risk)

► Commercial Risk/Business Risk Disputes between buyer and seller. Controlling title to goods pending payment. Customer illiquidity or insolvency Inability to finance company “investment” in export accounts receivable Control of quality of goods. Working capital tied up Increasing reliance on bank debt.

► Documentary Risk

► Interest Rate Risk

► Foreign Exchange Risk

11 |

Trade and Supply Chain & HSBC

► Banks major role in International Trade is to assist clients in Mitigating risk Effecting Payment Providing a level of trust and integrity to the transaction between two parties that are

frequently not well known to each other

► In any trade arrangement, a conflict of wants exists between: Supplier

Wants payment for the goods Wants payment prior to shipment of the goods

Buyer Wants to receive the correct goods Wants goods at the right time May want credit terms

► Trade and Supply Chain assists in bridging the gap between these conflicting wants

METHODS OF PAYMENT

13 |

Payment Methods

► The choice of payment is determined by: Buyer’s Credit Standing Supplier’s Financial Condition Competition for the Sale Industry Practice Amount of the Transaction Regulatory Environment

► Primary Payment Methods: Payment in Advance Open Account Documentary Collections Documentary Letter of Credit

14 |

What is Trade Finance About? Risk Management

COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C

Internal CustomersExporter Importer

COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C


Relying on Counterparty risk

PAYMENT IN ADVANCE

OPEN ACCOUNT

16 |

Payment In Advance/ Open Account

► Payment in Advance: Buyer remits funds before the goods are shipped Supplier ships after the funds are received Buyer at risk:

Non-shipment by the seller Quality of goods shipped Exchange controls frustrating payment Negative impact on cash flow

► Open Account Goods dispatched directly to Buyer Buyer pays on receipt/ after a specified period Supplier at risk:

Non-payment by Buyer Exchange controls may frustrate payment Negative impact on Supplier’s cash flow

DOCUMENTARY COLLECTIONS


COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C


COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C


19 |

Documentary Collections

► Definition A payment mechanism initiated by the Exporter, using the services of a bank, to collect

payment from the Importer This is done by forwarding documents, most importantly title documents, through agreed

banking channels

► Types of Payment D/P: Release of Documents against Payment- Documents are not released until payment

is made by the Importer D/A: Release of Documents against Acceptance- Documents released upon the promise

of payment at a future date as evidenced by a draft drawn on and accepted by the Buyer

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1. Sales Contract

2. Goods Shipped

4. Documents sent to Collecting Bank

5. Drawee notified of arrival of documents

7. Payment less charges


Collecting Bank

Importer

(Drawee)

Exporter

(Drawer)

Remitting Bank

3. Documents Presented with Collection Order

6. Drawee makes payment

21 |

BUYER

Key Risks:

1) Shipment schedules and documentation cannot be controlled.

2) If payment is made against documents, D/P, then the importer is unable to inspect the goods prior to payment.

3) No examination of documents by the Bank.

Benefits:

1) Supplier credit may mean no other finance required

2) If D/A terms goods can be used/inspected before payment

3) Cheaper than Letter of Credit

BUYER

Key Risks:

1) Shipment schedules and documentation cannot be controlled.

2) If payment is made against documents, D/P, then the importer is unable to inspect the goods prior to payment.

3) No examination of documents by the Bank.

Benefits:

1) Supplier credit may mean no other finance required

2) If D/A terms goods can be used/inspected before payment

3) Cheaper than Letter of Credit

Documentary Collections- Risk Profile

Key Risks:

1) Since there is no financial guarantee of a Bank to effect payment, the Buyer can always reject making payment or demand to pay a lesser amount and hence not accept the shipment.

2) Under D/A, there is the risk that the buyer will either not pay or overextend the terms provided.

SELLER

Benefits:

1) Under D/P It is possible to maintain control of the goods through the Banks.

2) Under D/P, documents are not released until payment is made.

3) Under D/A, the accepted draft provides legal recourse to the buyer.

Key Risks:

1) Since there is no financial guarantee of a Bank to effect payment, the Buyer can always reject making payment or demand to pay a lesser amount and hence not accept the shipment.

2) Under D/A, there is the risk that the buyer will either not pay or overextend the terms provided.

SELLER

Benefits:

1) Under D/P It is possible to maintain control of the goods through the Banks.

2) Under D/P, documents are not released until payment is made.

3) Under D/A, the accepted draft provides legal recourse to the buyer.

LETTERS OF CREDIT


COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C


COLLECTION - DA

COLLECTION - DP

OPEN ACCOUNT

ADVANCE PAYMENT

Least Secure

Most Secure

Most Secure

Least Secure

LETTER of CREDIT

CONFIRMED L/C


24 |

Documentary Letters of Credit

► Definition A written undertaking by a bank Given to the Supplier at the Buyer’s request Promising to effect payment of a stated amount at a stated time Against presentation of documents in compliance with the terms and conditions stated in

the Credit

► Types of Payment Sight LC Usance LC

25 |


1. Sales Contract

2. LC Application

3. LC Issued

4. LC Advised

5. Goods Shipped

6. Documents Presented

7. Documents Presented to Issuing Bank

8. Payment / Documents Released

9. Payment by Issuing Bank

10. Payment to Beneficiary

Issuing Bank

Importer

(Applicant)

Exporter

(Beneficiary)

Advising

Bank

26 |

Letters of Credit- Risk Profile

BUYER

Benefits:

1) Only obliged to pay after documentary evidence that the goods have been shipped and presentation of compliant documents.

2) Control over shipment schedules and timing.

3) Ability to work with enhanced supplier base

Key Risks:

1) Issuing Banks make “payment” determination based purely on the documents presented that appear on their “face” to be compliant with the terms of the LC. There is no absolute certainty of receiving the correct goods. “Banks deal in documents, not goods.”

2) Import LC’s require credit facilities to be in place or cash collateral, which can affect the company’s cash flow.

BUYER

Benefits:

1) Only obliged to pay after documentary evidence that the goods have been shipped and presentation of compliant documents.

2) Control over shipment schedules and timing.

3) Ability to work with enhanced supplier base

Key Risks:

1) Issuing Banks make “payment” determination based purely on the documents presented that appear on their “face” to be compliant with the terms of the LC. There is no absolute certainty of receiving the correct goods. “Banks deal in documents, not goods.”

2) Import LC’s require credit facilities to be in place or cash collateral, which can affect the company’s cash flow.

Key Risks:

1) A high percentage of presentations made under LCs are discrepant therefore making the payment obligation of the issuing entity null and void.

2) Depending on the country the goods are being shipped to, Country & Bank Risk can negate a major protective factor of LC’s.

**Two key factors for discrepancies are poor documentation and late shipment/presentation.

SELLER

Benefits:

1) The exporter has the Issuing Bank’s undertaking to pay against compliant documents regardless of the financial capacity of the Buyer.

2) Ability to Confirm and/or Discount drafts.

27 |


► Remember- Banks deal in Documents, not goods! Importer must still pay if exporter’s documents comply with letter of credit.

► Governed by the following regulations: Uniform Customs & Practice for documentary credits ICC No. 600 (2007 revision) International Chamber of Commerce- Publication Number 600 (1JUL07)

TERMINOLOGY

29 |

Terminology

► Applicant Buyer/ Importer/ Account Party

► Beneficiary Seller/ Exporter/ Drawer

► Issuing Bank Importer’s bank Guarantees payment against correct documents

► Advising Bank Correspondent Bank- close to seller, but not always seller’s bank

► Confirming Bank Located in beneficiary’s country Adds “guarantee” of payment

► Negotiating Bank Correspondent Bank Close to Seller Often advising bank Always the confirming bank (if any) Sometimes the paying bank Checks and processes documents

30 |

Terminology

► Paying Bank May be the negotiating bank May be the advising bank May be the issuing bank

► Accepting Bank Usance Letter of credit Drawee of draft

31 |

Incoterms

► Group E EXW Ex Work

Departure

► Group F FCA Free Carrier

Main Carriage FAS Free Alongside Ship

Unpaid FOB Free on Board

► Group C CFR Cost and Freight

Main Carriage CIF Cost, Insurance and Freight

Paid CPT Carriage Paid To

CIP Carriage and Insurance Paid To

► Group D DAF Delivered at Frontier

Arrival DES Delivered Ex Ship

DEQ Delivered Ex Quay

DDU Delivered Duty Unpaid

DDP Delivered Duty Paid

32 |

Incoterms

► Any Mode of Transport EXW Ex Work (…named place)

Including Multimodal FCA Free Carrier (…named place)

CPT Carriage Paid To (…named place of dest.)

CIP Carriage and Insurance Paid To (named place of dest.)

DAF Delivered at Frontier (…named place)

DDU Delivered Duty Unpaid (…named place of dest.)

DDP Delivered Duty Paid (…named place of dest.)

► Air Transport FCA Free Carrier (…named place)

► Rail Transport FCA Free Carrier (…named place)

► Sea and Inland FAS Free Alongside Ship(…named port of dest.)

► Waterway Transport FOB Free on Board (..named port of dest.)

CFR Cost of Freight …named port of dest.)

CIF Cost, Insurance and Freight (…named port of dest.)

DES Delivered Ex Ship (…named port of dest.)

DEQ Delivered Ex Quay (…named port of dest.)

33 |

Export Letter of Credit- Key Requests

► Request: Irrevocable (confirmed) letter of credit

► Advise to: Full address of bank’s foreign trade department

► Negotiation: Freely negotiable

► Reimbursement: Must be on a bank in the USA and authority must be given to HSBC Bank to claim

reimbursement by CABLE or debit account

► Charges: All banking charges in the USA are for account of the buyer/seller. All banking charges outside the USA are for account of the buyer/seller. In case of time draft, any discount and acceptance charges are for the account of

buyer/seller.

► Domestic LC: Ask the applicant to request their issuing bank to send letter with authorized signatures to

negotiating bank.

► Other considerations: Confirmation, latest shipment date, expiration date/ what counter, partial shipment,

inspection certificate, boycott clause

34 |

Common Discrepancies

► Credit expired

► Late presentation of documents

► Late shipment

► Short shipment

► Credit amount exceeded

► Shipment from/to incorrect ports

► Presentation of incorrect insurance

► Insurance coverage not in credit currency

► Under-insured

► Inconsistent documents

► Description of goods differ on credit and invoice

► Draft and invoice amounts differ

► Consequences: Confirmation, if any, is voided Guarantee to pay by issuing bank is voided Result: lost protection of the letter of credit

35 |

Importers- Key Points

► On the application: Beneficiary section: telephone number of exporter Control the shipment with latest shipment & presentation date Terms of sale Inspection Certificate Bank charges, specify for whose account

► REMEMBER- BANKS ONLY DEAL WITH DOCUMENTS! IMPORTERS MUST PAY IF EXPORTER’S DOCUMENTS COMPLY WITH THE LC.

BEYOND THE BASICS

Trade Cycle

Purchase Order Contract Invoice Shipping Aval/Accept Docs.

. Domestic InternationalManufacturing Shipping Shipping Arrival Delivery A/R

| | | | | | | | | Raw Packing Loading Inventory PaymentMaterials

Sight Maturity

Usance Period

Letter of Credit Docs. Docs. PaymentPrepared Presented

Prepay Confirmation Export CollectionsOpen A/C Pre Export Loans (L/C) Factoring LCs/Discount

EXIM etc Forfaiting/AvalBack to Back/Transferable LCs Export Insurance

Purchase Order Contract Invoice Shipping Aval/Accept Docs.

. Domestic InternationalManufacturing Shipping Shipping Arrival Delivery A/R

| | | | | | | | | Raw Packing Loading Inventory PaymentMaterials

Sight Maturity

Usance Period

Letter of Credit Docs. Docs. PaymentPrepared Presented

Prepay Confirmation Export CollectionsOpen A/C Pre Export Loans (L/C) Factoring LCs/Discount

EXIM etc Forfaiting/AvalBack to Back/Transferable LCs Export Insurance

Exporter Importer

38 |

Confirmed Letter of Credit

► When a bank, other than the Issuing Bank, adds its undertaking to pay under the Letter of Credit Usually the exporter’s own bank is the Confirming Bank

► Why is a Confirmation necessary? Beneficiary doubts the Issuing Bank’s ability to pay (e.g. bank risk, country risk, or

exchange controls) Beneficiary needs payment on presentation of documents Beneficiary wants “without recourse” financing

Confirmed Documentary Letters of Credit

1. Sales Contract

2. LC Application

3. LC Issued

4. LC Advised

5. Goods Shipped

6. Documents Presented

7. Documents Presented to Issuing Bank

8. Payment / Documents Released

9. Payment by Issuing Bank

10. Payment to Beneficiary

Issuing Bank

Importer

(Applicant)

Exporter

(Beneficiary)

Advising/ Confirming Bank

40 |

Confirmed Letters of Credit (cont’d)

► Used to mitigate issuing bank risk and country risk

► Structure the letter of credit to ensure that documents are presented correctly against the letter of credit. We typically work with our clients to secure a “sample” letter of credit from the foreign

bank to review the terms before the letter of credit is issued.

► Discounting of the drafts If the Buyer is asking for extended terms, and is located in an area with high interest

rates (ex.- Latin/South America), may have the opportunity to offer them 30/60/90/180 day terms (in select countries we may have an opportunity to offer even longer terms)

HSBC would discount the drafts using US interest rates- extremely attractive to the Buyer

► In a program such as this, the Exporter would be offering its customers a low interest rate loan while reducing Exporter letter of credit costs. By getting HSBC involved early enough in the process, we may have a relationship with either the Buyer in country, or a correspondent relationship with the Buyer’s bank. In either case, we may have the opportunity to finance them directly. Commonly referred to as a Banker’s Acceptance, this form of finance is a time draft drawn on and accepted by the exporter. The bank’s acceptance of the draft is a formal acknowledgement of the bank’s unconditional promise to pay at its maturity.

41 |

Direct Documentary Collections

► Service that facilitates payment for international shipments utilizing both HSBC as the collecting bank and the Buyer’s bank as payment agents. Both banks act as intermediary collection agents. This is a low cost alternative to letters of credit.

► Under a Documentary Collection, the drafts and documents are forwarded to the bank for processing. Under a Direct Collection documents are sent out directly by the Supplier or Supplier’s Freight Forwarder Supplier is sent a receipt to then track the payment.

► Used when there is a high level of trust and confidence between the Buyer and the Supplier.

► Advantages to Exporter: Enhances competitive position because collections are low cost and there is no credit

exposure to buyer. Banks monitor the collection and automatically send out periodic tracers. Goods don’t

exchange hands until payment from buyer’s bank is received. More secure than open account. Documents are controlled by agent banks until payment

or the draft is accepted Governed by internationally accepted rules and regulations.

► Disadvantage to Exporter: Less secure than a letter of credit or cash in advance terms Documents are not reviewed for discrepancies.

Direct Collections

1. Sales Contract

2. Goods Shipped

4. Drawee notified of arrival of documents



Collecting Bank

Importer

(Drawee)

Exporter

(Drawer)

Remitting Bank

3. Documents Presented with Collection Order

5. Drawee makes payment

43 |

Direct/Documentary Collections with an AVAL

► Exporter may require that its customer’s bank provide an “Aval” The “Aval” is the act of subscribing one’s signature at the bottom of a promissory note or

bill of exchange: this is an act of surety ship by the party signing, in favor of the party to whom the note or bill is given.

► Advantages to the Exporter: More secure because supported by the availability under the customer’s line of credit, at

no additional cost to the Exporter. The cost to the customer is typically less than that of a letter of credit.

► Disadvantage to the Exporter: Less secure than cash or a letter of credit from a highly rated bank.

44 |

Open Account-Enhanced By Export Insurance

► Through our trade services team and our partnership with Euler Hermes, HSBC can help identify which of your customers in certain geographic regions qualify for open account terms secured by export insurance. At times this alternative can be a cost effective.

► Advantage to the Exporter: Ability to customize a program in which the country and level of coverage can be

matched with your desired exposure levels.

► Disadvantage to the Exporter: The cost of insurance is borne by Exporter, and must be passed on to the customer

through some form of price increase.

45 |

Standby Letters of Credit

► Any Letter of Credit, which represents an obligation to the beneficiary on the part of the issuer to make payment on default by A/C party to repay money borrowed by A/C party to make payment on buyers indebtedness

► Aim is NOT to draw against the Standby

► Trade Uses: Bid Bond Performance Bond Overseas Bank Guarantees Trade Credit Support

46 |

Shared Client

► In situations where we have a mutual customer relationship, HSBC may be able to leverage its global presence, either in country or through an affiliate/partner bank.

► In some cases we may be able to provide financing directly to the exporter’s customer, either on a recourse, partial recourse, or non-recourse basis. As in all of our alternatives, your trade finances representative would work directly with your organization in the coordination of these types of programs.

47 |

Issuance and Document Examination services to the highest standards Shipping Guarantees and Airway Release Bills- assist in the prompt release

of merchandise when the actual goods arrive in advance of the Commercial Documents

Bankers Acceptances - A self-liquidating, fixed rate method of re-financing short term trade transactions; typically negotiable instrument

Global reach- our importer’s suppliers are often our customers overseas; also gives us the ability to give advice as we collaborate with overseas affiliates

Documents Against Payment Documents Against Acceptance

Import Commercial Letter of Credit


Import Core Trade Products

Delivery Channel

Strength in Traditional Trade products

Leveraging local foreign expertise to deliver superior service

Global reach – our importer’s suppliers are often our customers overseas

HSBCnet platform – Provides the ability to issue LCs electronically user friendly, flexible, provides a view into all trade transactions

Instant Advice- email notification of LC issuance, amendments, and payments

Other Frequently Requested Services

48 |

Competitive pricing and risk mitigation structures Advising, and Document handling services to the highest standards Confirmation and Discounting services of foreign bank risk Silent confirmation for sensitive markets and commercial situations

Worldwide Forfait desk network with appetite for foreign corporate, government, and bank risk

Project and Export Finance for long term capital projects Short term working capital programs with Exim Bank

HSBC has delegated authority for up to $5MM Product must be at least 50% US content Generally 1 year or less Must be fully collateralized via monthly borrowing base

Electronic LC Advising (Instant @dvice) HSBCnet platform – integrated Global Transaction Banking platform

Export Commercial Letter of Credit

Delivery Channels

Export Solutions

Forfaiting and Project/Export Finance

Strength in Traditional Trade products

Leveraging local foreign expertise to deliver competitive risk mitigation

Innovation and client collaboration; working together to deliver alternate and custom solutions

Other Frequently Requested Services

Ability to discount bank avalised drafts in markets dominated by collections Handling of Transferable Letters of Credit, Deferred Payments and Back-to-

Back letters of Credit Standby Letters of Credit – Bid and Performance Bonds

EXIM Working Capital Guarantee Program

APPENDIX

Key Trade and Supply Chain Clients

Risk MitiationAnd Export Solutions

* * * * * * * This Notice Appears as a

Matter of Record Only

Commercial Letter of Credit Issuer* * * * * * *

This Notice Appears as a Matter of Record Only







Risk Mitigation And Export Solutions











Structured Open Account Solutions



Commercial Letter of Credit Issuer

Structured Open AccountSolutions









Structured Open Account Solutions





Risk MitigationAnd Export Solutions



Risk Mitigation

And Export Solutions * * * * * * *








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Key Global Awards

51 |

Best Global Bank Best Global Transaction Banking House

Euromoney

Deal of the Year 2007

Trade & Forfaiting Review

Best Trade Finance Bank in Asia 2003 – 2008Best Trade Finance Bank in HK 2007-2009Best Structured Trade Solution 2009Best Trade Finance Bank in Taiwan 2008Best Trade Finance Bank in Vietnam 2008-2009Best Trade Finance Bank in Malaysia 2009The Asset

Leading Trade Services Bank in Asia Pacific, the Middle East & North Africa 2007Leading Bank for Documentary Processing 2007

Global Trade Review

Best Trade Finance Bank in Asia 1997 – 2007Best Trade Finance Bank in Japan 2007, 2009

FinanceAsia

Best Global Supply Chain Finance Provider 2008Best Supply Chain Provider in the Middle East 2008Best Pre-Shipment Financing Solution 2008Best Trade Finance Provider in the UK 2006-2009Best Trade Finance Provider in HK 2002-2009Best Trade Finance Bank in Asia 2002 – 2007Best Trade Finance Bank in the Middle East 2007Best Trade Finance Services (Internet Banking) 2006Best Trade Finance Provider in Saudi Arabia 2009

Global Finance

Best Online Trade Finance Bank 2008Best International Trade Bank in China 2008Best International Trade Bank in Malaysia 2008Best International Trade Bank in Pakistan 2008Best Trade Bank in the Middle East and North Africa 2006 – 2008Best Structured Trade Bank 2007Best Trade Documentation Bank 2007Best Factoring House 2007Best Online Trade Finance Provider 2007Best Hardware/ Software Provider Bank in Asia 2007Best Trade Bank in Asia 2004 – 2006Best Trade Bank in Central Asia 2007

Trade Finance

Deal of the Year 2009

Global Trade Review

Best Bank Asia 2007: Supply Chain Finance

Treasury Management International

Disclaimer

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PRODUCTS AND SERVICES ARE OFFERED BY EITHER HSBC BANK USA, N.A., MEMBER FDIC; OR HSBC SECURITIES (USA) INC. A REGISTERED BROKER DEALER AND A REGISTERED FUTURES COMMISSION MERCHANT. HSBC SECURITIES (USA) INC. IS A MEMBER OF THE NEW YORK STOCK EXCHANGE, NASD AND SIPC AND REGULATED BY THE SFA FOR THE CONDUCT OF INVESTMENT BUSINESS IN THE UNITED KINGDOM.

HSBC BANK USA, N.A. AND HSBC SECURITIES (USA) INC. ARE MEMBERS OF THE HSBC GROUP. ANY MEMBER OF THE HSBC GROUP MAY FROM TIME TO TIME UNDERWRITE, MAKE A MARKET OR OTHERWISE BUY OR SELL AS PRINCIPAL SECURITIES OR OTHER INSTRUMENTS MENTIONED HEREIN, OR TOGETHER WITH THEIR DIRECTORS, OFFICERS AND EMPLOYEES MAY HAVE EITHER A LONG OR SHORT POSITION IN THE SECURITIES, COMMODITIES CURRENCIES OR OTHER INSTRUMENTS MENTIONED IN THIS REPORT OR FUTURES OR OPTIONS CONTRACTS CONVERTIBLE INTO SECURITIES OR OTHER INSTRUMENTS MENTIONED IN THIS REPORT, OR MAY PERFORM OR SEEK TO PERFORM INVESTMENT BANKING SERVICES FOR THOSE COMPANIES MENTIONED HEREIN.

THE INFORMATION IN THIS REPORT IS DERIVED FROM A VARIETY OF SOURCES WE BELIEVE TO BE RELIABLE; HOWEVER, WE CANNOT GUARANTEE ITS ACCURACY OR COMPLETENESS, NOR SHALL WE BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES INCLUDING BUT NOT LIMITED TO ERRORS (INCLUDING ERRORS OF TRANSMISSION), INACCURACIES, OMISSIONS, CHANGES IN MARKET FACTORS OR CONDITIONS, OR ANY OTHER CIRCUMSTANCES BEYOND OUR CONTROL. THE INFORMATION, ANALYSIS AND OPINONS CONTAINED HEREIN CONSTITUTE OUR PRESENT JUDGEMENT WHICH IS SUBJECT TO CHANGE AT ANY TIME WITHOUT NOTICE.

THIS REPORT IS INTENDED SOLELY FOR THE INFORMATION OF THE SPECIFIED ADDRESSEE, IS FOR PRIVATE CIRCULATION AND NOT INTENDED FOR USE BY PRIVATE CLIENTS AS DEFINED BY THE SFA.

THIS IS NOT A RECOMMENDATION , OFFER OR SOLICITATION TO PURCHASE OR SELL ANY SECURITY, COMMODITY, CURRENCY OR OTHER INSTRUMENT. THIS REPORT DOES NOT CONSIDER SPECIFIC OBJECTIVES, CIRCUMSTANCES OR NEEDS OF INDIVIDUAL RECIPIENTS. RECIPIENTS OF THIS REPORT SHOULD SEEK FINANCIAL ADVICE REGARDING THE APPROPRIATENESS OF INVESTING IN ANY SECURITY, COMMODITY, CURRENCY OR DERIVATIVE INSTRUMENT OR STRATEGY CONTAINED HEREIN.

SECURITIES, SPOT AND FORWARD FOREIGN EXCHANGE, CURRENCY OPTOINS, COMMODITIES AND CERTAIN OTHER PRODUCTS DISCUSSED HERIN ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF HSBC BANK USA, N.A., ARE NOT GUARANTEED BY HSBC BANK USA, N.A.; AND ARE SUBJECT TO INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.

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