1

Public stock company “Joint Stock Commercial

Industrial & Investment Bank” (PSC Prominvestbank)

Trade & Structured Finance

90 years of experience of servicing corporate clients

Positive image in the international markets

Broad range of branches all across the country

Vast experience of co-operation with leading European and American banks

Top 10 Ukrainian bank

Subsidiary of Vnesheconombank (one of the largest Russian banks)

Correspondent network enabling fast and high quality settlement of payments

A team of professionals which will help you to elaborate a trade finance instrument which best suits the needs of every individual trade finance-related project of a customer

From its very foundation the Bank is one of the largest Ukrainian banks and in 2010 it has been honoured as one of the most important financial institutions for the country’s development.

Prominvestbank is also among the largest and most reliable creditors to the Ukrainian economy having invested throughout the years of independence (1991-present days) more than USD 60 billion into various branches of the economy ranging from agriculture sector to aircraft construction.

2

PROMINVESTBANK’S TRADE FINANCE FACILITIES

Pre-export/ Post-export Financing

usually applied for readily marketable staples (raw materials, commodities, consumables, spare parts, different types of equipment)

Post-import Financing (DP LC with discounting, LC with post-financing)

Post-import Financing (DP LC with discounting, LC with post-financing)

used for financing different types of equipment with repayment cycle not more than 3 years

Import Financing employed for import financing of equipment with long-term self-repaid period and long manufacturing process

Short term financing (from 30-180 days up to 1 year)

Medium term financing ( from 1 to 3 years)

Long term financing (up to 3 – 5 years)

3

TRADE FINANCE INSTRUMENTS

Trade Finance solutions involve structuring facilities using a combination of the Prominvestbank’s products to satisfy customer requirements

4

• sight payment L/C • deferred payment L/C with discounting • sight L/C with post-financing

DOCUMENTARY LETTERS OF CREDIT (L/C)

STAND BY LETTERS OF CREDIT (SBLC)

• payment guarantees • advance payment guarantee • loan repayment guarantee

GUARANTEES

• short term (PIB’s bilateral loans facilities with foreign banks) • long term (financing under ECA)

IMPORT FINANCING OF CAPITAL GOODS & EQUIPMENT

LETTERS OF CREDIT IN BRIEF

LCs are not only the standard method of payment for foreign business transactions in many countries, but also efficient tool for financing of the underlying deal

Letters of credit are useful for both parties - exporter and importer. Exporter can be credited with the LC-amount shortly after the dispatch of the goods and on presentation of the stipulated documents

Importer can ensure that payment will be effected only if the documents proving the shipment of the merchandise are in strict conformity with the required L/C terms

Deferred payment L/C allows the exporter to provide his counterparty with delay in payment. At the same time the possibility to discount shipping documents by the exporter’s bank enables exporter to raise funds far before maturity

L/C with post-financing clause has very similar structure, but another mechanism of realization. L/C issued by the importer’s bank is available by sight presentation with exporter’s bank. L/C terms contain financing instructions to the exporter’s bank from the issuing bank and stipulate repayment on agreed maturity

5

DEFERRED PAYMENT LC WITH DISCOUNTING

FOREIGN BANK

EXPORTER IMPORTER Purchase contract

LC with deferred payment

A

pp

lica

tio

n f

or

LC

wit

h d

efe

rre

d

pa

ym

ent

issu

e

Shipment

Shipping documents

Payment at maturity

S

hip

pin

g d

ocu

men

ts

P

ay

men

t a

t m

atu

rity

A

dv

ice

of

LC

R

eq

ues

t to

dis

cou

nt

ship

pin

g

do

cum

en

ts b

efo

re m

atu

rity

D

isco

un

tin

g u

nd

er L

C b

efo

re

ma

turi

ty

6

LC WITH POSTFINANCING

FOREIGN BANK

EXPORTER IMPORTER Purchase contract

Sight LC with request for post-financing + Agreement (if necessary)

A

dv

ice

of

LC

A

pp

lica

tio

n f

or

sig

ht

LC

iss

ue

+

Ag

reem

en

t fo

r p

ost

-fin

an

cin

g

Shipment

C

om

ply

ing

pre

sen

tati

on

of

ship

me

nt

do

cum

ents

P

ay

men

t u

nd

er L

C

Shipping documents

Informing of post-financing provided

S

hip

pin

g d

ocu

men

ts

I

nfo

rmin

g o

f p

ost

-fin

an

cin

g

pro

vid

ed

R

epa

ym

ent

at

ma

turi

ty

Repayment at maturity

7

GUARANTEES /SBLCs IN BRIEF

Advance payment guarantees allow Exporter to receive an advance before the shipment (or start of production) of the Goods, and provide security to Importer of the advance refund in case of Exporter’s default of his Contract obligations in terms of shipment

Payment guarantees provide financial security to the foreign exporter should Ukrainian importer fail to make payment for the goods or services supplied. Therefore this type of guarantees enables Ukrainian company to avoid premature withdrawal of working capital and to accumulate funds for timely payment at maturity

SBLCs are applicable in import-export business, primarily with the American and frequently in the Far East as well, or wherever the contracting parties decide to use this form as a security instrument. Usually the same types of SBLCs as the guarantees are used

8

ADVANCE PAYMENT GUARANTEE/SBLC

FOREIGN BANK

IMPORTER EXPORTER

Purchase contract

Advance payment Guarantee/SBLC

Delivery

Advance Payment

A

dv

ice

of

Gu

ara

nte

e/S

BL

C

A

pp

lica

tio

n f

or

gu

ara

nte

e /

SB

LC

is

sue

9

PAYMENT GUARANTEE/SBLC

FOREIGN BANK

EXPORTER IMPORTER

Purchase contract

Payment Guarantee/SBLC

Ad

vic

e o

f G

ua

ran

tee/

SB

LC

A

pp

lica

tio

n f

or

gu

ara

nte

e/S

BL

C

issu

e

Delivery

Payment

10

FINANCING IN BRIEF

Export credit agencies (ECAs) have been established by governments in the most developed markets specifically for the purpose of furthering their export trade flows. ECAs provide a variety of different insurance or guarantee products to support financing for specific export contracts, overseas investments and, on an ‘untied’ basis, in other strategic or competitive bidding situations – often on more advantageous terms than would be available on a stand-alone basis

Advantages of ECA covered transactions

long repayment periods (including a grace period)

fixed interest rate options available

security of payments for exporter

significant importer’s country risk mitigation (up to 95%)

cover is available in most convertible currencies

11

ECA COVERED FINANCING

FOREIGN BANK

EXPORTER IMPORTER

(1) Purchase contract

(11)

Pa

ym

ent

(5)

Lo

an

ag

reem

ent

(6) 15% advance payment

(4) Master Credit Agreement

(7)

Ap

pli

cati

on

fo

r L

/C/g

ua

ran

tee

issu

e

(8) L/C/guarantee for 85% contract value

(9) Shipment

(12

) A

dv

ice

of

Lo

an

p

rov

ided

(13

) R

epa

ym

ent

(10

) S

hip

men

t d

ocu

men

ts

(12) Advice of Loan provided

(13) Repayment

12

OUR TRADITIONAL PARTNERS IN TF

We cooperate with many foreign banks in TF business, but the closest and long-term cooperation in the field has been established with the following banks: We are constantly working on enhancing our partner banks in trade finance-related area representing different parts of the world

Bank of New York Mellon

JP Morgan Chase Bank NA

Citibank NA

Wells Fargo Bank NA

Deutsche Bank AG

Commerzbank AG

Credit Suisse

UBS AG

Crédit Agricole CIB

Nordea Bank Finland Plc

SMBC

BNP Paribas SA

Banca Nazionale del Lavoro SpA

Intesa Sanpaolo SpA

Landesbank Berlin AG

Rabobank, International

UniCredit Group

Bank of Tokyo-Mitsubishi UFJ Ltd

Sumitomo Mitsui Banking Corporation

Promsvyazbank, Russia

VTB, Russia

Novikombank, Russia 13

CONTACTS

Foreign Economic Affairs Department

+38 (044) 364-67-24 – Director of Department

Maksym Kyrychenko

+38 (044) 364-65-67 – Deputy Director of Department

Nataliya Kovtun

Trade and Structure Finance

Head of TSF Diana Lemesh

+38 (044) 364-65-00

+38 (044) 364-65-03 Nataliya Zhidchenko

+38 (044) 364-65-04 Svetlana Sayapina

+38 (044) 364-65-69 Alina Bogoslavets

+38 (044) 364-66-46 Konstantin Motora

+38 (044) 364-69-24 Yulia Glinskaya

+38 (044) 364-67-77 (ext. 2553) – Project Manager of Foreign Economic Affairs Department

Alexander Maly