Description of the instrument: foreign purchasers are allowed to make instalment payment for the period of 3-5 years, given the possibility to receive a discounted payment upon shipment by means of forfeiting.

Consumers of the product: Russian exporters of equipment, raw materials, consumer commodities etc. – customers of Promsvyazbank.

Structure of the transaction:

• Negotiations with Promsvyazbank / gaining of an obligation of PSB to buy-out export proceeds
• Entering into the agreement with instalment payment (documentary L/C is a customary way of payment)
• Purchaser opens a L/C with instalment payment
• Delivery, furnishing of documents by the Exporter to Promsvyazbank
• Negotiation of the exporter’s L/C – cash payment to the exporter immediately upon delivery

Advantages:

• Risk deduction:
• irrevocable documentary L/C issued by a prime bank of the Purchaser’s country.
• obligation of Promsvyazbank to purchase proceeds.
• Competitiveness upgrade:
• prolonged instalment period for the Purchaser
• reasonable cost of instalment payment for the purchaser.
• financing without bank loans.
• Expansion into new markets:
• new sales markets with seesaw economic and political position
• increase in customers due to attractive terms
• Reasonable cost:
• discount rates may be fixed for the period up to 3 months prior to delivery
• discount rates are lower than the average ones in Russian banks
• funding of up to 100% of contract value.