Daily News: May 10, 2012

King Trade Closes $3 Million Facility for Exporter


King Trade Capital announced the completion of a $3 million export production finance facility.

King Trade Capital (KTC) was contacted by U.S. Export/Import Bank with an exporter in need of a finance solution to support the manufacture and export of construction components and accessories used to erect bridges, buildings and roads.

The exporter had recently been awarded a $4.3 million contract, backed by an export letter of credit issued by a large overseas general contractor. The contract award was part of a much larger $1.7 billion construction project to develop a transportation system in the Middle East.

As a result of the recent economic downturn in the U.S., the exporter’s bank credit facility was fully utilized with no excess availability for this new contract. Faced with the problem of how to finance the upswing in domestic and international orders and contracts stemming from rebounding overseas demand, the company was in search of a solution. KTC came up with a finance solution that worked in conjunction with the exporter’s senior lender and allowed KTC to provide the exporter a facility that provided $ million to support the purchase of raw materials and the manufacture of the goods needed to fulfill the $4.3 million contract.

In addition to providing capital, KTC lent its expertise to provided valuable guidance in structuring the terms of the export letter of credit, ultimately benefiting the exporter. The facility established by KTC not only supported the immediate contract needs, but provides the additional capacity to meet the capital requirements tied to future domestic and international orders and contracts received by the client.

Through the increased business and KTC’s financing, the client continues to build its balance sheet. The senior lender was able to maintain the relationship with the client and will benefit from profits retained in the business, resulting in a stronger balance sheet. The overseas contractor, satisfied with the quality of the products and timeliness of shipments, recently increased its orders to the exporter by an additional $2.1 million.