Express Trade Capital closed a $1.3 million letter of credit (LC) facility to help finance a commodities trader’s purchase of personal protective equipment from a manufacturer in Vietnam. Prior to the transaction, the client obtained a purchase order backed by an LC from a distributor of PPE and consumer goods.

The client came to Express to issue a similarly worded LC to its Vietnamese supplier. By structuring what is typically called a back-to-back LC, the client felt safe that its purchase of nitrile gloves would meet its buyer’s specs since the supplier’s requirements under Express’ LC mirror the end customer’s LC requirements.

The transaction will unfold in several phases. Once the materials pass inspection, the end-buyer will fund an escrow account that is used as a back-up to the LC. The Vietnamese manufacturer will be paid through Express’ LC when it supplies the required shipping and inspection documents to the satisfaction of the client. A second inspection at the client’s U.S. warehouse will trigger release payment from the end customer’s LC.