The first recipient of the ‘Global Sales Insurance’ is POSCO INTERNATIONAL SINGAPORE PTE LTD
Collaborates with the Korea Trade Insurance Corporation and Deutsche Bank to enhance stability in global trade finance
On the 26th, POSCO INTERNATIONAL (CEO Lee Kye-In) became the first Korean company to receive a security for ‘Global Sales Insurance (Securitization).’
The first beneficiary of this insurance security is POSCO INTERNATIONAL SINGAPORE PTE LTD. By introducing this innovative product for the first time in its industry, POSCO INTERNATIONAL has laid a foundation to reduce potential risks from international trade transactions and enhance the financial stability of its overseas corporation, thereby strengthening its competitiveness in foreign markets.
The issuance of this first security was made possible due to its extensive international trading experience based on its global network, which spans over 80 countries.
The security presentation ceremony was held at the Korea Trade Insurance Corporation in Gwanghwamun, Seoul. Attendees included POSCO INTERNATIONAL CEO Lee Kye-In, Korea Trade Insurance Corporation President Jang Young-Jin, and Deutsche Bank Seoul Branch Manager Park Hyun-Nam, who discussed the importance of global financial cooperation and plans for future expansion.
The Korea Trade Insurance Corporation provided the insurance security to POSCO INTERNATIONAL to ensure stable funding for its overseas subsidiary, while Deutsche Bank facilitated quick liquidity by purchasing trade accounts receivable backed by this security. As a result, POSCO INTERNATIONAL has been able to reduce the size of its debt and conduct trade transactions under more favorable conditions.
This collaboration is particularly viewed as a new successful model that supports stable funding while alleviating corporate debt burdens. It is expected to create more opportunities for domestic companies to strengthen their overseas expansion and financial competitiveness.
Launched in November last year, the ‘Global Sales Insurance (Securitization)’ is a financial product based on the insurance security from the Korea Trade Insurance Corporation, allowing banks to purchase trade accounts receivable from overseas subsidiaries under *non-recourse conditions. This allows overseas subsidiaries to secure operating funds even before collecting payments, while banks can reduce their burden on allowances for doubtful accounts since these will not be classified as risky assets. Also, it reduces the corporate debt burden since this is a sale rather than a loan secured by trade accounts receivable.
* Non-recourse condition: Refers to a condition that imposes no further responsibility for repayment, even if there is a default on the trade accounts receivable after the purchase.
“Through this collaboration, our local subsidiaries will be able to secure operating funds at lower interest rates and improve financial ratios, which is expected to further enhance our business competitiveness,” CEO Lee Kye-In of POSCO INTERNATIONAL stated. “This will mark an important milestone in our global trade finance.”
“This case of collaboration between POSCO INTERNATIONAL and Deutsche Bank represents an innovative first step in supporting trade finance,” Jang Young-Jin, President of the Korea Trade Insurance Corporation, commented. “We will continue to actively support domestic companies in securing funding under more favorable conditions in the global financial environment.”
