Course 10 of 20 · LNG Desk Academy

Working Capital, Credit & Margin for a Cargo Book

Stage C, Exposure, funding and hedging. Level 5 of 10.

Funding and credit for a cargo book: letters of credit, prepayment, the cash cycle from lifting to invoice settlement, margin funding and counterparty credit limits.

112 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 04, Course 08, Course 09

Enrol or enquire See the 112 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

11 modules · 112 chapters

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

M0 The Money Shape of a Cargo Book Ch 1-9
  1. One Cargo, One Very Large Cheque
  2. Lumpy Commitments Against a Smooth Facility
  3. The Money Leaves Before the Ship Does
  4. Thirty Days at Sea and Nobody Has Paid
  5. Why a State Buyer Is a Different Animal
  6. Running Out of Cash, Line or Limit
  7. The Treasury Call Before a Lifting Is Confirmed
  8. What the Delivered Cost Stack Leaves Out
  9. How the Modules Fit Together
M1 The Cash Cycle of One Cargo Ch 10-20
  1. Drawing the Dates Before Drawing the Money
  2. From Bill of Lading to Value Date
  3. Why Discharge Does Not Mean Paid
  4. A Pricing Month That Closes After the Cargo Lands
  5. Measurement, Certificate and the Invoice Clock
  6. Charter Hire and Port Costs on Their Own Dates
  7. Boil-Off Shrinks the Asset You Are Financing
  8. Finding the Peak Funding Day for One Parcel
  9. A Worked Cargo Cycle, Part One: Leaving the Loadport
  10. A Worked Cargo Cycle, Part Two: Discharge to Collection
  11. Twelve Liftings a Year and the Overlap Between Them
M2 The Cost of Money Per Unit of Energy Ch 21-29
  1. Turning Funding Days Into Cents a Million Btu
  2. Where Your Cost of Funds Comes From
  3. The Interest Line Inside a Netback
  4. Payment Days Traded Against Delivered Price
  5. Cut-Off Times and a Cargo-Sized Day of Interest
  6. Settlement Currency on a Cross-Basin Sale
  7. What an Instrument Fee Costs Per Unit
  8. Ranking Two Cargoes by Capital Turn
  9. The Funding Charge Every Cargo Decision Needs
M3 Letters of Credit at Cargo Scale Ch 30-40
  1. A Bank's Promise Instead of a Buyer's
  2. Why One Credit Swallows a Whole Line
  3. Sizing the Amount When the Price Is Not Yet Known
  4. Provisional Invoicing, Tolerance and the Top-Up
  5. Expiry, Latest Shipment and a Long Voyage
  6. Confirmation When the Issuer Sits in the Buyer's Country
  7. Pricing Confirmation on Country Risk, Not Yours
  8. The Presentation Window and the Money Standing Still
  9. A Discrepancy on a Cargo-Sized Draw
  10. Revolving Credits for a Delivery Programme
  11. The Limits of a Documentary Promise
M4 Standby Credit, Guarantees and Sovereign Support Ch 41-50
  1. The Standby That Pays Only When Something Fails
  2. Parent Guarantees From a State Holding Company
  3. Testing a Guarantor That Is Not a Commercial Company
  4. Sovereign Comfort Letters and Whether They Bind
  5. Performance Security Behind a Term Supply Commitment
  6. Choosing Between a Credit and a Standby for a Lifting
  7. What Each Instrument Consumes on Your Own Line
  8. Expiry Management Across an Annual Delivery Programme
  9. Releasing Security After the Final Invoice Clears
  10. An Abusive Demand on a Cargo Standby
M5 Prepayment and Advance Structures Ch 51-59
  1. Paying the Seller Before the Ship Loads
  2. Prepayment Taken From a Buyer Who Needs the Molecules
  3. Pricing the Discount Inside an Advance
  4. Security Against an Advance You Cannot Recover
  5. Multi-Cargo Prepayment Against a Delivery Schedule
  6. Prepaid Liquefaction Fees and the Cargo Not Yet Lifted
  7. Where an Advance Sits If the Seller Fails
  8. Comparing an Advance With an Instrument Fee
  9. A Worked Advance Over Three Liftings
M6 Three Kinds of LNG Buyer Ch 60-70
  1. The Credit Question a Cargo Sale Asks
  2. A National Gas Company: Capacity and Permission Apart
  3. Transfer, Convertibility and Getting Paid Out of Country
  4. A Regulated Utility and Its Tariff Recovery
  5. When a Pass-Through Mechanism Moves Too Slowly
  6. A Trading House Buyer and the Funding Behind It
  7. Which Entity on the Confirmation Actually Owes You
  8. Reading Accounts Prepared to Another Convention
  9. Tender Buyers and the Name You See Too Late
  10. Watching a Buyer Between Liftings
  11. A Written Assessment of One State Buyer
M7 Credit Limits Sized to a Lifting Ch 71-80
  1. A Ceiling That One Cargo Fills Completely
  2. Exposure Before Loading and After Discharge
  3. Replacement Cost on a Lifting Not Yet Made
  4. Tenor Limits Against a Long Voyage
  5. Country Ceilings and a Basin's Worth of Demand
  6. Netting Physical and Financial Legs With One Name
  7. Staggering Liftings to Live Inside a Ceiling
  8. The Uplift Request and the Hours You Have
  9. Secured Ceilings and the Capacity an Instrument Frees
  10. Credit Reporting a Cargo Committee Will Read
M8 Funding Hedge Margin on a Cargo Book Ch 81-91
  1. Why the Right Hedge Empties the Account First
  2. Margin on a Cargo-Sized Notional
  3. What the Clearing House Wants Before the Market Moves
  4. A Daily Call Against a Monthly Physical Settlement
  5. A Rally Through a Loaded Short Hedge
  6. Eligible Collateral and the Haircut On It
  7. Bilateral Margin on an Index Swap
  8. Thresholds and Transfer Amounts Worth Negotiating
  9. Forecasting Tomorrow's Call From Today's Position
  10. Funding the Gap Between Hedge Cash and Cargo Cash
  11. The Hedge Closed for Want of Cash
M9 The Cargo on the Water With No Buyer Ch 92-101
  1. An Unsold Parcel Afloat and Fully Funded
  2. Who Will Lend Against a Cargo With No Sale
  3. Title, Documents and Control in Transit
  4. An Advance Rate Against an Asset That Evaporates
  5. Floating Storage as a Funding Decision
  6. Marking an Unsold Cargo for the Lender
  7. Price Protection as a Condition of the Advance
  8. The Day the Facility Shrinks and the Cargo Does Not
  9. Funding a Diversion Decided Mid-Voyage
  10. When to Sell the Cargo Because of the Money
M10 Concentration, Covenants and a Funding Quarter Ch 102-112
  1. One Cargo as a Fifth of the Book
  2. Concentration Limits a Commercial Team Will Resist
  3. Spreading Liftings and Buyers Across a Quarter
  4. Covenants in a Cargo Finance Facility
  5. Headroom Measured Against One Unsold Parcel
  6. The Covenant Definition Nobody Reconciled
  7. A Worked Funding Quarter, Part One: Three Cargoes Committed
  8. A Worked Funding Quarter, Part Two: The Peak Week
  9. A Worked Funding Quarter, Part Three: Collection and Release
  10. The Funding Constraint as Another Desk's Input
  11. What Funding and Credit Cannot Fix

The brochure gives each of these 112 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 10 of twenty

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

Enrol or enquire See the whole pathway