Course 13 of 20 · Crude Oil Desk Academy

Working Capital, Credit and Trade Finance

Stage D, Risk and money. Level 7 of 10.

The cash cycle, borrowing base, letters of credit, margin and collateral, and liquidity under stress.

120 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 05, Course 06, Course 08

Enrol or enquire See the 120 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

12 modules · 120 chapters

Open any module for its full chapter list, in teaching order.

M0 Why a Trading Desk Is a Financing Business Ch 1-10
  1. The Barrel You Have Not Been Paid For Yet
  2. Profit and Cash Are Two Different Statements
  3. Where the Money Sits While a Cargo Moves
  4. The Three Things a Desk Runs Out Of
  5. Who Lends to an Oil Trader, and Why
  6. The Balance Sheet of a Trading House
  7. Return on Capital Employed as the Desk's Real Score
  8. What a Treasury Function Does All Day
  9. The Working Vocabulary of Trade Finance
  10. Map of the Course and Where Each Thread Ends
M1 The Cash Cycle of a Single Cargo Ch 11-21
  1. Drawing the Cash Timeline of a Cargo
  2. When Payment Actually Falls Due
  3. Prepayment and Cash Against Documents
  4. Open Account and the Credit You Just Gave Away
  5. The Float Between Loading and Discharge
  6. Days Sales Outstanding Across a Cargo Book
  7. Days Inventory and the Cost of Holding Barrels
  8. The Cash Conversion Cycle Computed
  9. A Worked Cash Cycle, Part One: The Purchase Leg
  10. A Worked Cash Cycle, Part Two: The Sale Leg
  11. Why the Profitable Trade Broke the Cash Box
M2 Payment Terms as Price Ch 22-30
  1. Interest Is a Line in Every Quotation
  2. Converting Credit Days Into Cents a Barrel
  3. The Discount for Paying Earlier
  4. Negotiating Days Instead of Differential
  5. Reference Rates, Spreads and Your Cost of Funds
  6. Currency of Payment and the Funding Mismatch
  7. Value Dating, Cut-Offs and the Day You Lost
  8. Pricing Period Against Payment Date
  9. The Financing Share of Cost of Carry
M3 Counterparty Credit Assessment Ch 31-40
  1. What You Are Actually Underwriting
  2. Reading a Counterparty's Accounts
  3. Leverage, Coverage and Liquidity Ratios
  4. Which Entity Signed the Contract
  5. State-Owned Counterparties and Country Risk
  6. Trading Houses, Refiners and Resellers Compared
  7. Credit Ratings and What They Leave Out
  8. Market-Implied Signals of Credit Stress
  9. Behaviour History and the Soft Signals
  10. Writing the Credit Memorandum
M4 Limits, Exposure and Credit Support Ch 41-49
  1. The Credit Limit as an Operating Constraint
  2. Measuring Exposure Before the Cargo Loads
  3. Measuring Exposure After Delivery
  4. Tenor, Country and Concentration Limits
  5. Parent Guarantees and Letters of Comfort
  6. Cash Deposits, Prepayment and Retention of Title
  7. Credit Insurance and Receivable Cover
  8. Netting and Set-Off as Credit Mitigation
  9. The Limit Breach Conversation
M5 The Documentary Letter of Credit Ch 50-60
  1. What a Letter of Credit Actually Promises
  2. Four Parties and Four Different Interests
  3. Independence from the Underlying Contract
  4. Anatomy of the Credit Text
  5. Sight, Deferred Payment and Acceptance
  6. Negotiation and the Nominated Bank
  7. Advising, Confirmation and the Second Promise
  8. Pricing a Confirmation
  9. Transferable and Back-to-Back Credits
  10. Revolving Credits for Term Supply
  11. What a Letter of Credit Will Not Save You From
M6 Issuance, Amendment and the Discrepancy Ch 61-69
  1. Applying for a Credit Against Your Own Line
  2. Drafting Instructions a Seller Can Live With
  3. The Credit That Arrives Unworkable
  4. Amendment Mechanics and Who Pays
  5. Expiry, Latest Shipment and the Presentation Window
  6. When the Bank Finds a Discrepancy
  7. The Waiver Request and the Applicant's Choice
  8. Refusal, Protest and the Money Standing Still
  9. The Discrepancy Economics Nobody Writes Down
M7 Standbys, Guarantees and Bank Undertakings Ch 70-78
  1. The Standby Credit as a Default Instrument
  2. Demand Guarantees and Their Governing Rules
  3. Performance Bonds and Bid Bonds
  4. Choosing Between a Documentary Credit and a Standby
  5. Avalised Drafts and Bank Acceptance
  6. Bank Payment Undertakings and Receivable Purchase
  7. Comparing the Cost of Each Instrument
  8. Fraudulent and Abusive Demands
  9. Releasing an Instrument You No Longer Need
M8 Transactional Trade Finance Ch 79-88
  1. The Transactional Loan Against One Cargo
  2. Self-Liquidating Structure and the Repayment Source
  3. Assignment of Receivables and Proceeds Accounts
  4. Pledge of Goods, Warehouse Receipts and Control
  5. Pre-Export and Prepayment Finance
  6. Inventory Repurchase and Stock Held Off Balance Sheet
  7. Receivable Discounting and Factoring
  8. Supply Chain Finance and Stretching Payables
  9. Reading a Transactional Facility Agreement
  10. When Transactional Finance Is the Wrong Tool
M9 The Borrowing Base Ch 89-99
  1. What a Borrowing Base Facility Is
  2. Revolving Mechanics and the Clean-Down
  3. Eligible Assets and the Collateral Pool
  4. Advance Rates and Why They Differ
  5. Ineligibles and the Haircut Catalogue
  6. Building the Borrowing Base Certificate, Part One
  7. Building the Borrowing Base Certificate, Part Two
  8. Marking the Collateral and Price Sensitivity
  9. The Base That Shrinks as Prices Fall
  10. Syndication, Agent Banks and Allocation
  11. What Availability Really Means on a Monday Morning
M10 Margin, Collateral and Hedge Funding Ch 100-109
  1. Why a Hedge Costs Cash Before It Earns Anything
  2. Initial Margin on a Cleared Position
  3. Variation Margin and the Daily Call
  4. Eligible Collateral and Haircuts at the Clearing House
  5. Bilateral Collateral and the Credit Support Annex
  6. Thresholds, Minimum Transfers and Collateral Disputes
  7. Forecasting a Margin Call Before It Arrives
  8. The Mismatch Between Margin and Physical Cash
  9. Financing the Margin Line
  10. The Hedge That Was Right and Still Broke the Desk
M11 Covenants, Liquidity Stress and the Treasury Desk Ch 110-120
  1. The Covenant Package in a Trading Facility
  2. Computing Headroom Honestly
  3. The Covenant Calculation Nobody Checked
  4. Early Warning Signs of a Funding Squeeze
  5. A Liquidity Squeeze Day by Day, Part One: The First Week
  6. A Liquidity Squeeze Day by Day, Part Two: The Choices
  7. A Liquidity Squeeze Day by Day, Part Three: The Resolution
  8. Stress Testing the Cash Box
  9. Talking to Banks Before You Need Them
  10. A Worked Case: Funding a Full Trading Month
  11. What Trade Finance Cannot Fix

The brochure gives each of these 120 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 13 of twenty

It stands alone, and it is also the entry point to the Crude Oil Desk Academy pathway.

Enrol or enquire See the whole pathway