Trade Finance

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The principal terms and conditions applicable to the PTA Bank’s project and infrastructure finance loans are as follows:

a) Interest Rate: The interest rates for direct financing and Lines of Credit will be determined by the PTA Bank reflecting the cost of funds, risk exposure and margin. Rates can be fixed or floating depending on nature and source of funds.

b) Fees and Expenses: Fees levied on project finance are: commitment fees on the undisbursed portion of the loan effective a given number of days from the date of loan; facility fees on the loan amount payable in advance of appraisal; arrangement fees; guarantee fees. These fees depend on the type of project and complexity of the proposal. The borrower also pays all related and incidental expenses to providing the

c) Repayments; Repayments usually follow the borrower’s Trade Cycle and/ or L/C tenors of 30 days. 60 days, 90 days 180 days up to a maximum of 270 days.

d) Exchange Risk: The Borrower bears the entire foreign exchange risk by repaying all loans granted in foreign exchange in the same currencies of disbursements.

e) Procurement: Loan proceeds shall be utilised to procure goods and services as approved by the Bank following internationally accepted methods of competitive and prudent procurement.

f) Refinancing: Refinancing of Letters of Credit shall only be done on an exceptional basis

g) Insurance: The Bank requires that projects maintain comprehensive insurance policy covers on all assets pledged against the loan, with the Bank’s interest noted.

h) Tenors: Loans will typically have tenors dictated by the project’s ability to repay and cash flows and will not exceed 10 years inclusive of a grace period not exceeding 3

i) Security: Loans can be secured in a variety of ways the most common of which are :

i. first charges on fixed assets, fixed and floating charges created by debentures
o List of properties to be pledged.

o Value of each property (as supported by a professional valuation).

o Whether the property is being used to secure loans from another lender and if so, details of commitments are needed.

o Location of the property proposed as security.

ii. Guarantees – Personal and Corporate

j) Present banking relationships

The Bank requires full details of credit facilities being enjoyed at the moment. In particular:

i. Types of facilities.
ii. Amount approved.
iii. Date approved.
iv. Outstanding balance.
v. Repayment terms.
vi. Due date.
vii. Securities provided.
viii. Ability of the company to meet its current borrowing obligations.

k) Timetable envisaged for project implementation and completion.

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