BAFT releases master loan agreement for bank-to-bank trade loans

Stocks and Financial Services Press Releases Tuesday May 6, 2014 10:14
WASHINGTON--6 May--BAFT

WASHINGTON — BAFT, the international financial services association, today announced the release of a standard Master Loan Agreement for bank-to-bank trade loans. BAFT, its members, and Berwin Leighton Paisner finalized the MLA and associated legal opinion, with members of the BAFT Trade Loan Documentation Working Group delivering the guidelines for its usage.

The working group was co-chaired by Alain Verschueren, head of sales and market intelligence, for Correspondent Banking at BNP Paribas; Henry Pfeiffer, vice president at J.P. Morgan; and Ruediger Geis, senior product manager for Trade at Commerzbank. The group also included representatives from product and legal areas from nearly 20 international banks. The MLA has also been endorsed by the BAFT Global Trade Industry Council which represents the global heads of trade finance of the world’s largest international trade banks.

The agreement helps standardize definitions and documentation for trade loans and will enable bank clients, government bodies, and investors to better understand trade finance assets. “This initiative helps provide uniformity to the product by clarifying definitions and making the entire process more transparent,” said Pfeiffer. “It has been a pleasure working with this group to help standardize documentation to the benefit of all parties, lenders as well as borrower banks.”

The MLA and related guidelines cover important topics such as documentary requirements, enforceability, sovereign events and compliance requirements to support trade loans between banks.

“We encourage initiatives that facilitate the global trade business. This master trade loan document represents another important step towards standardizing and opening trade business to a wider range of banks and countries and, therefore, has our full support,” said Geis. Commerzbank was also instrumental in the development of BAFT’s Master Participation Agreement (MPA) used by banks and their counterparties around the globe to facilitate the buying and selling of country and bank trade finance related risk.

BAFT will make the MLA available on its website (www.baft.org), and is planning educational sessions for prospective users. The initial version is subject to English Law, and the New York Law version is expected in the coming months.

--www.theasianbanker.com (May 6 2014)--

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