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Corporate Introduction
Synthesis Overview
About Structured Trade Finance
Synthesis Procedures
5
8
13
Investment Structures
Our bond structures assume:
1. a portfolio of synthetic investment grade transactions backed by a letter of credit or credit insurance from an investment
grade counterparty
2. A diversification cap of 20%per commodityand geography
Issuer Synthesis Trade Finance II S.A.
Currency USD (also on ASW in EUR and GBP)
Seniority Senior pari passu notes with an excess spread roll-up
Size USD50-300mio
Underlying Documentation Issued off Synthesis Trade Finance S.A. Note Program
Listing Euro-MTFMarket of the Luxembourg Stock Exchange
Issuing and Paying Agent Citibank NA, London
Security and Note Trustee Capita Trust CompanyLimited
Auditor Price WaterhouseCoopers
Legal Counsel for the Borrower Holman Fenwick Willan
Governing Law English
Structure Bullet Extendable Bullet
Coupon [6.00%] 6.50%-7% [7.50%]
Maturity 18 Months 3 Year, 5 Year 3 Year
Look-Through and Consultation Yes Yes Yes
Coupon Frequency Semi-Annual Annual Annual
Calculation ACT/ACT ACT/ACT ACT/ACT
Credit Enhancement Yes (CI or LC) Yes (CI or LC) Yes (CI or LC)
Investment Structures
Our participation structuresassume :
1. Sensible diversification
2. Pre-agreed “facilities” that define transactional drawdowns
Loan Administrator Synthesis Structured Commodity TradeFinance Limited
Currency USD (also on ASW in EUR and GBP)
Seniority Senior, direct lending exposure
Size USD50-300mio
Underlying Documentation Master Loan ParticipationAgreement
Governing Law English
Bank Citibank NA, Luxembourg
Typical Structure Pre-Agreed Counterparties with 48 hours notice of drawdown on a fundedbasis
Discretion on Execution SSCTF Sole Discretionwithout one month’s notice
Diversification At the discretion of the lender
Wind-up Period 3 months
Structure Bullet Facility Extendable Facility Long-dated Facility
Average Yield [6.00%] [6.50%, 7.00%] [8.00]%
Maturity 12 Months 1 Year +1 Year 3 Year
Look-Through and Consultation Yes Yes Yes
Payment Frequency Transaction-based Transaction-based Transaction-based
Utilisation 85% 88% 92%
Credit Enhancement Optional Optional Optional
Background and Entities
Company Information
Synthesis Trade Finance S.A.
STF is a bankruptcy remote company, set up purely to finance
structured trade finance transactions. It has an independent Board of
Directors with a long experience of the management of collective
investment vehicles, risk management and compliance. The Board of
Directors is supported by a team of expert Special Advisors in the field
of trade finance
Synthesis Structured Commodity Trade Finance Limited
SSCTF is the UK-based company which originates business. SSCTF
works with companies to structure solutions to their financial
requirements and helps to arrange funding and a strong security
package before arranging funding via STF or via participation
agreements
Fixed Income
Transaction Participation
About the produc t
About the product
Structured Trade Finance is the
provision of funds to allow
commercial transactions to occur
between counterparties indifferent
jurisdictions
Traditionally it has been a business
controlled by banks, but in recent
years more and moreopportunities
have arisen for non- bank
participants to participate in the
sector. Synthesis is the first
financial institution to
independently securitise trade
finance assets
Transactions are typically very
short in duration (between 15 and
90 days). Where we can obtain
very strong collateral, a maximum
of 10% of our portfolio will finance
transactions of up to 124days
The focus of a trade finance
transaction is upon the value of the
goods being transported, not the
balance sheet of the seller, giving
us excellent security
Why banks are not as active in the sector as they once were
Banks have higher costs and smaller
balance sheetsBanks are focussed on
larger clients
Banks can’t make decisions about
clients quickly enough
Banks take time to make decisions. With our strong
knowledge of the sector and streamlinedrisk
m anagement and cash management we can
generally make a decision very quickly, which is key
to companies trying to finance orders andinventory
Banks are less likely to provide trade finance credit
lines now than in the past. There are several reasons
for this. First, the operational costs of financing small
transactions can be quite high as it can require large
teams of people for a very small margin per
transaction. Secondly, many transactions are cross-
border and where a bank does not operate in both
jurisdictions they may decline to take on such
business.Finally,many trade finance transactions are
for large amounts compared with the equity value of
the company
With the right experience and understanding
of global trade flow, a new breed of trade
finance house is emerging, able to lend based
upon assets. Synthesis Trade Finance is at the
forefront of this transformation
The four key reasons to look at investing in tradefinance
Strong Security
When we enter into a
transaction we typically
(although not exclusively)
step in as seller, acquiring all
of the legal title, the rights to
payment from the buyer and
any credit support
Trade finance typically funds
genuine commercial
transactions. With the
additional protection of
Letters of Credit or Credit
Insurance, default rates are
far below those of standard
corporate loans*
Self-Liquidating
Trade finance transactions
have a natural conclusion
(the sale of the underlying
goods) and have little risk
of unforeseeable delays in
repayment
Strong Returns
Due to the short duration of
the transactions, yields on
them tend to be higher
than on longer, balance-
sheet loans, meaning that
returns on efficiently
deployed capital are higher
Low Default Rates
I
*see ICC data in this presentation
Some facts about the market
Despite global
economic
uncertainty, global
trade continues to
grow year-on-year as
globalisation
continues
SMEs, particularly in
fast developing
economies, are an
increasingly large
part of the global
supply chain
USD6
trillion
WTO Member
Exports per year
As Basel III increases
pressure on bank
balance sheets,SMEs
are proving to be the
main victims of the
funding drought
If well structured,
trade finance
transactions can be
considered
extremely low risk in
comparison to other
forms of credit
investment
c.50%
The SME shareof
that trade
c.80%
Of that SME
businessstruggles
to obtain funding
0.02% -
0.20%
Is the historic
default rate
according to ICC
Data
The sheer scale of global trade is staggering and this offers a huge market in which Synthesis
Trade Finance can operate
How we operate
Our business model is similar to financing that has been carried on for centuries. We provide funding
for companies who have strong business models but need outside help to finance their larger
transactions
1. We finance transactions, notcompanies.
We are not a lender in a traditional manner and we do not provide loans to companies. All funding that we provide is
repaid upon completion of the transaction and our exposure ends at that point.
2. We step directly into the transaction
Most of the transactions that we finance are the simple sales of goods to end buyers. In this case, we are bridging the
time gap between dispatch of the goods by the supplier, and receipt by the buyer. W e pay the seller directly, we take
ownership of the goods until receipt, and collect sales proceeds directly from the buyer.
3. We alwaysrequire either credit insurance of a letter of credit.
All transactions financed through the bond are required to have a letter of credit or credit insurance provided by an
investment grade institution.This provides an additional layer of protection for every deal
The first step in our process is determining whom we work with
Minimum three year track record
All of our counterparties must be able to
demonstrate that their management has at least
three years of experience similar transaction. With
all transactions being less than 124 days, this means
that it will have taken place successfully multiple
times already
o Be able to satisfy our KYC and AML procedures
for the company, its management and its
shareholders
Be able to demonstrate a solid client base that
is in line with our policies
o
Each counterparty must then :
Strong
Management
Solid
Clients
In many of our financing activities there can be multiple companies involved – buyers, sellers,
shipping companies, warehouses and intermediaries. We have very clear selection procedures on
who we will transact with
Track
Record
The next step in our process is to choose what we will fund
AssetThe assets that we finance must be
fungible and have a liquid market. This
means that we focus on non-perishable,
quality- checked goods, typically either
listed on a mercantile exchange or with
a particularly well- developed OTC
market
Unlike traditional bank lending, we are funding specific transactions, so even if we agree to provide
funding for a counterparty, we will first ensure that the money will be used for a specific transaction
that meets our requirements and the money is returned as soon as that transaction is completed
Credit EnhancementThe transactions that we finance are
always backed by a Letter of Credit or
Credit insurance from an investment
grade counterparty
Loan to ValueTypically we look at a “real” valuation of
the asset in terms of what price it can be
sold at in a variety of jurisdictions as well
as only lending relative to the purchase
price
Monitoring and ControlAre we able to identify, monitor and
exercise control over the asset atany
point during the transaction?
Examples of products that we will help to fund
Oil and Energy Products
Eg petro l, aviation fuel
W ith buoyant consumption of
oil products around the world
and long delivery times, there
is continual demand for
funding
Agricultural Produce
Eg grains and be ans
Agricultural goods are often
seasonal which makesit harder
for small companies to raise
finance. Using our strong
market knowledge we can
seek out mutualy beneficial
relationships
Industrial c omm od ities
Eg polymers, metals
Metals and polymers are businesses
that often have regular contracts that
allow us to remain well invested by
continually moving money from one
contract to the next
Semi-finished or finished good s
Eg generic pharmaceutica ls
A proportion of our portfolio
may be used to financenon-
commodities as long as the
margins are strong and the
products are generic and liquid
Procedures for new clients
Potential Client
Enquiry
Transaction
Assessment
DD and KYCof
counterparties
Structure and
terms
negotiated
Indicative
Facility Offer
Letter
Facility
Referred to
Lender
- Referrals from
existing fund or
bond clients
- Pre-existing
contacts of Team
Members
- Referrals from
existing transaction
originators
- Unsolicited client
approaches
- Does it meet the
Lender’s criteria?
- Is the product
fungible and can we
assert security?
- Are the
management team
credible?
- Are there any
regulatory hurdles?
- Compliance
Catalyst via Bureau
van Dijk
- Market references- Procedure covers all
steps in the
transaction chain
- Managed via
internal CMSsystem
and multiple sign-
offs are needed
- Can the transaction
be structured in a
way that suits the
lender?
- Is there sufficient
margin to makethe
transaction work?
- Are we in control at
all points of the
transaction?
- The Facility Letter is
indicative and is
subject to Lender
approval
- It lays out terms but
is not binding for its
duration
- Contains CPsand
CSs that will be
essential for each
underlying trade
- Should the IFOLbe
accepted, full KYC
and facility
information is
submitted to the
Lender for approval
- Final negotiation of
terms occurs
- Preparations made
to transact shortly
Provision of transaction funds
- Client contacts us to
confirm that the
transaction meets
the terms of the
Facility Offer Letter
Request to
DrawDown
SSCTFReview
the Request
Lender is
notified of the
Drawdown
Funding is
released
SSCTF
monitors the
transaction
Repayment is
made
- Lender isnotified
of the need to
provide funding and
we confirm that CSs
have been met
- SSCTFconstantly
monitors
documentation and
location of the stock
throughout
- SSCTF reviews the
transaction for any
irregularities and
ensures that KYC
checks are inplace
- Funding is released
by SSCTF to the
Seller, enabling the
transaction to occur
promptly
- SSCTFaccept
repayment and
disburse as
appropriate to
lenders
How we deal with the key risk factors in our business
Key Risk Factors
Risk ofnon-payment - Synthesis only lends to companies or management teams with asignificant
track record in the relevantcommodity
- Both the arranger of the deal and the debtor are required to pass our KYC
process, where we set a very high standard to protect our investorsinterests
- Each transaction will have in place a Letter of Credit or Credit Insurance to act
as a safeguard
Risk of rejection of goods - Goods are checked for quality where necessary and certified by an
independent inspector before the loan isextended
Country Risk - In conjunction with leading trade finance law firm Holman Fenwick Willan,
Synthesis continually monitors any potential risks, in particular those relating to
currency restrictions, sanctions or embargoes
Commodity PriceRisk - Synthesis does not engage in transactions where the return is in any way linked to
the price of the underlying goods. Each transaction will have a sales contractat a
pre-agreed price so that the returnis fixed
- In the event of non-payment by a borrower, Synthesis would first look to enforce
the terms of the contract. It would then seek to sell the commodity to another
buyer. It is only after that that they would seek recovery through the Letter of
Credit or Credit Insurance. By concentrating on fungible, hard commodities, the
risk of depreciation of the asset isminimised
Risk of DocumentaryFailure - Facility Documentation is arranged by Holman Fenwick Willan and all
transactions are documented by experiencedprofessionals
Pipeline as of today
Commodity Finance Type Facility Avg Transaction Utilisation Tenor Underlying Risk Risk Mitigation
Coal * BL financing
* FOB sale onLC
USD5mio USD2mio 90% 30 Incoming sight LC from approved
Thailand Bank on behalf of Buyer
LC Confirmation from 1st Class Bank
Soft commodities:
wheat, corn ,soyetc
* Warehouse financingagainst
inspection & FCR
* Receivables security
USD3mio USD1mio 90% 90 Receivables from variousEU
countries. Buyers are
international commodities
traders purchasingFOB
100% CAD OR incoming LC with
confirmation
Naptha * Back to back onvessel
* Receivables security
USD2.5mio USD2.5mio 90% 10 Back to back LC LC on from investment gradebanks
MillingWheat * Warehouse financingagainst
inspection & FCR
* Receivables security
USD2mio USD1mio 80% 60 Receivables from South Korea,
Malaysia & Switzerland based
Buyers. Buyers are majorglobal
commodity traders
Credit Insurance fromPre-approved
Insurance Companies
YellowPeas * Warehouse financingagainst
inspection & FCR
* Receivables security
USD1mio USD0.5mio 80% 60 Receivables from UAE &
Singapore Buyers. Buyers are
major global commoditytraders
Credit Insurance fromPre-approved
Insurance Companies
Rape Seed * Warehouse financingagainst
inspection & FCR
* Receivables security
USD1mio USD0.5mio 80% 60 Receivables from Malaysia &
Singapore Buyers. Buyers are
major global commoditytraders
Credit Insurance fromPre-approved
Insurance Companies
Feed Wheat * Warehouse financingagainst
inspection & FCR
* Receivables security
USD1.5mio USD0.75mio 80% 60 Receivables from recognised
Switzerland basedCommodities
Trader
Credit Insurance fromPre-approved
Insurance Companies
SunflowerOil * BL financing
* Receivables security
USD2mio USD2mio 80% 30 Receivables fromrecognised
German based Commodities
Trader
Credit Insurance fromPre-approved
Insurance Companies
Wheat * Warehouse financing
* FOB sale onLC
USD3mio USD3mio 90% 30 Incoming sight LC fromLebanon
Bank on behalf of Buyer
LC Confirmation from 1st Class Bank
Pipeline as of today
Commodity Finance Type Facility Avg Transaction Utilisation Tenor Underlying Risk Risk Mitigation
LME gradecopper,
nickel etc
* LME Warehousefinancing
* CAD exit
USD 5mio USD 1mio 90% 7 Receivables fromrecognised
German based Commodities
Trader
100% CAD
Soft commodities:
wheat, corn ,sunflower
etc
* Warehouse financingagainst
inspection & FCR
* CAD exit
USD 2mio USD 0.5mio 80% 45 Receivables from major USA
commodity trader fordelivery to
EU
100% CAD
Bunker Fuel * Transit financing
* Receivables security
USD 6mio USD 1mio 90% 60 Receivables from pre-approved
major International Shipping
Companies for delivery on water
Credit Insurance fromPre-approved
Insurance Companies
Pharmaceuticals * Pre-export financing
* Receivables security
USD 5mio USD 2mio 90% 30 Receivables from leadingEU
pharmaceutical companies
Credit Insurance fromPre-approved
Insurance Companies
Scrap Metal * Warehouse financingagainst
inspection & FCR
* FOB saleon LC
USD 5mio USD 5mio 80% 30 Incoming sight LC fromTurkey
Bank on behalf of Buyer
LC Confirmation from 1st Class Bank
LPG * BL financing
* Receivables security
USD 5mio USD 1.25mio 90% 120 Receivables fromapproved
Italian buyers
Credit Insurance fromPre-approved
Insurance Companies
Petroleum Products * Pre-export Financing
* Receivablessecurity
USD 15mio USD 5mio 90% 90 Receivables from majorpetroleum
corporates in EU, USA, Asia
Credit rating of A- or better on corporates
OR Credit Insurance from Pre-approved
Insurance Companies
We can utilise the following banks and insurers to enhance protection
-1 ABN AMRO BankN.V. -1 Industrial & CommercialBank of China Limited
-1 Abu Dhabi Commercial BankPJSC -1 Industrial Bank of Korea
-1 Agricultural Bank of ChinaLimited -1 ING Bank N.V.
-1 Australia and New Zealand Banking GroupLimited -1 JP Morgan Chase Bank N.A.
-1 Atradius Credit InsuranceN.V. -1 Korea Development Bank
-1 Bank of China Limited -1 Lloyds Bank Plc
-1 Bank of Communications Co., Ltd -1 Lloyds of London Insurance Syndicates
-1 Bank of Nova Scotia -1 Malayan Banking Berhad
-1 Banque Cantonale Vaudoise -1 National Australia BankLimited
-1 Barclays Bank Plc -1 National Bank of Abu DhabiPJSC
-1 Bayerische Landesbank (Bayern LB) -1 National Bank of Kuwait S.A.K.P.
-1 BNP Paribas -1 Norddeutsche Landesbank Girozentrale
-1 China Construction Bank -1 Oversea-Chinese Banking Corporation Limited
-1 Citibank N.A. -1 Qatar National Bank S.A.Q.
-1 Coface S.A. -1 Royal Bank of Canada
-1 Coöperatieve Rabobank U.A. -1 Santander UK plc
-1 Crédit AgricoleS.A. -1 Skandinaviska Enskilda Banken AB
-1 Credit Suisse AG -1 Société Générale S.A.
-1 CTBC Bank Co., Ltd. -1 Standard Chartered Bank
-1 DBS Bank Ltd -1 The Toronto-Dominion Bank
-1 Euler HermesS.A. -1 UBS AG
-1 Export-Import Bank of Korea -1 Unicredit Bank AustriaAG
-1 Garant VersicherungsAG -1 United Overseas Bank Limited
-1 Hang Seng Bank Limited -1 Wells Fargo BankN.A.
-1 HSBC Bank Plc
Biographies
Key Personnel at Synthesis
Spyros Papadopoulos has over 18 years’ experience in alternative investments. He began his career in Private Banking, first with Citigroup in London and
Geneva, where he was the key contributor to the development of both the Spanish and Greek Wealth Management Desks, and then with Société Générale in Athens,
where he was instrumental to the expansion of the Greek Private Banking division. Spyros resigned from Private Banking in 2006 to set up an asset management
company for Deloitte, before returning to London as Director of the hedge fund Absolute Return Partners. He left to found Synthesis in June 2009. His clients came
through unscathed, and indeed profited, from the crises of 2000-02 and 2007-present. Spyros holds the Investment Management Certificate of the CFA-Society of the
UK.
Ilya Medvedenko is responsible for business development , transaction origination and monitoring of CIS-based client relationships. Ilya has expertise in
corporate development, international trade, corporate financing, credit and equity investments in soft commodities and real estate. Previously he has worked at
Investment Banking Division of JP Morgan in London-based European Financial Institutions Group. Earlier Ilya was responsible for trade financing and European
business development in Barens Chocolate LLC. Ilya holds MSc in Finance & Investment, M&A, Private Equity degree from London School of Business and
Finance.
Gary Corby has more than 40 years experience in business with retail, manufacturing as well as trading in commodities. He has travelled extensively during this
time to most parts of world working with well known companies developing their business in emerging markets. Gary`s experience is wide ranging from trade
finance for commodities, securing finance for real estate mainly in the hotel sector. His contact list is extensive working with large companies, direct with board room
members in respect of investment funds. Gary has many direct contacts to banks giving him access to source of funding for areas such as Oil, gas sector, real estate,
renewable energy, as well as trade finance. Since returning from early retirement to the world of business Gary formed IOC Advisory Limited working closely with a
group of investors to support their business interests with commodity trade finance, oil & gas exploration, renewable energy, as well as low cost housing.
Matthew Edwards has over 27 years’ experience in financial services. He began his career with Tullet and Tokyo in the city of London in 1990 where he
quickly established himself as a leading broker. Matthew worked for two other leading brokerage houses in London before moving to Athens in 1997. He was head of
all foreign exchange activities for Sigma money brokers who under his guidance became the global benchmark for GRD brokerage. He has since acted as a business
development consultant for ICAP London, BGC Partners and Cleaves Securities. Throughout his career Matthew has developed and managed key client relationships
and maintains strong relationships with banks, brokerages and private equity firms
Key Personnel at Synthesis
Sébastien B. J. Moerman Born in France, Sébastien was educated at University in Lyon, moving on to King’s College, London where he gained a Masters
in Law. His experience in the world of fiduciary services ranges through trust and company management in the Channel Islands, Hong Kong, Singapore, Gibraltar,
Belize, Anguilla and Switzerland. Sébastien is a Member of the Society of Trust & Estate Practitioners (STEP), and has been the founding Chairman of its branch
in Lucerne-Zug. He has also been the Chairman of Verein STEP as well as STEP Gibraltar. Sébastien is a member of the Advisory Committee of the Asia Offshore
Association and a member of the International Tax Planning Association. Sébastien is the Chairman of the Noble Group and runs the Swiss office as well as being a
member of the board of Noble Trust Company Ltd. in Guernsey.
Jörgen Jessen has more than 35 years of experience within the financial sector and has been working in Denmark, Germany, and Luxemburg. Since 1993 he has been
working in Luxembourg for organizations like UBS & Deutsche Bank among others as executive and managing directors. He holds an Executive MBA from IMD in
Lausanne, has been awarded the IDP-C Certificate in corporate governance by INSEAD and is a ILA certified director. Jörgen has built a personal international network
through extensive traveling within Europe, Middle Ease, and Brazil, with recognized responsibilities in Real estate, Private Equity, Debt Financing Asset, Portfolio and
Wealth Management. He is fluent in German, English, Danish, Swedish, and Norwegian. He has a good understanding of French and Luxembourgish. He is of Danish
nationality and is residing and domiciled in Luxembourg.
Joseph Samuel With more than 15 years broad experience in the legal and financial sectors, Joseph is an experienced management professional, having grown,
re-organized and coordinated a number of funds, businesses, teams and departments, with full P&L responsibility and an excellent track record. A key element of his
work has been doing business face to face internationally, having undertaken business trips across five continents to more than 50 countries, and with clients in more
than 150. In 2015, he founded Old Park Lane Consultancy Ltd, through which he consults on fund structuring, capital raising, product development, international
business and communications for a number of clients.
This communication is being furnished solely on a confidential basis to the recipient. This communication is directed at persons having
professional experience in matters related to investments and any investment or investment activity to which this communication relates is
available only to such persons or will be engaged in only with such persons (or other persons to whom such investment can lawfully be
made available or with whom such investment activity can lawfully be engaged). If you do not have professional experience in matters
relating to investments you should not rely on this communication.
Neither this Comm unication nor any of the associated documents may be reproduced, re- transmitted or further distributed to any other
person or published, in whole or in part, for any other purpose than that stated above. The information in this document, which is in d raft
form and incomplete, is subject to updating, completion, revision, further verification and /o r amendment. In particular, the documents
refer to certain events having occurred which have not yet occurred at the date these documents are made available, but which are
expected to occur prior to the publication of an approved
prospectus in final form. Recipients of this Comm unication (or any of the associated documents) who are considering purchasing or
subscribing for Notes in any of the issuers are reminded that any such purchase or subscription m ust be made only on the basis of information
contained in the approved prospectus its final form, which may be different from the information contained in this document. Notes may not
at this time be offered by any of the issuers directly to the public. Neither this Comm unication nor any of the attached documents constitutes
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By accepting delivery of this Comm unication, you agree to keep it and its content (including the attached documents) confidential, and not
copy, publish,
distribute, pass on or disclose any of it except with the prior written consent of Synthesis.
To the extent permitted by applicable law and regulation, Synthesis Trade Finance S.A. and its affiliated companies expressly disclaims and
excludes any and all liability that m ay be based on this communication and the attached documents, any errors in it/ them or omissions from
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