Washington, DC, October 19, 2022—IFC and HSBC Bank USA N.A. ("HSBC") are partnering to support trade finance for Emerging Market Issuing Banks which will help the flow of critical goods to regions in Latin America, Central Asia, the Middle East, and Africa, that continue to face financing challenges as a result of COVID-19 and ongoing geopolitical disruptions.
The Global Trade and Liquidity Program is designed to provide a much-needed solution through the partnership and includes a 50-50% risk-sharing facility in a portfolio of trade-related assets for up to US$600 million.
This is the first-ever long-term trade engagement between IFC and HSBC, and the partnership will complement IFC's strategy to leverage HSBC's broad network to promote trade flows in key markets across the globe. HSBC is the largest trade finance bank globally, and this engagement will hopefully be the first of many future partnerships between IFC and HSBC.
"HSBC is excited to embark on this program with IFC," said Luis Torres, Regional Head of Product and Propositions and Portfolio Management and Distribution for Global Trade and Receivables Finance at HSBC. "The Global Trade and Liquidity Program will enable us to provide further financing opportunities to a segment of the market that requires significant investment. We look forward to expanding the relationship to include further programs targeting the varying needs of Emerging Market trade finance."
IFC's portfolio-based risk participation facilities with global banks provide critical financing support to address trade finance gaps in Emerging Markets whose trade flows have been interrupted and economies squeezed due to the pandemic and surging inflation across the globe. This is accompanied by the pressure for much-needed extended trade terms due to supply chain and logistics delays as well as the need for increased financing limits to support the higher prices of food and critical imports.
"The COVID-19 pandemic led to disrupted supply chains, surging inflation, and overall market anxiety along several value chains," said Nathalie Louat, Director of Trade and Supply Chain Finance at IFC. "By expanding IFC's capacity to deliver trade finance using the Global Trade Liquidity Program through an important partner as HSBC, our institutions can help businesses maintain their operations and speed up recovery as the pandemic eases and disrupted value chains rebuild in several key markets."
The facility will use the Global Trade Liquidity Program (GTLP) platform, an innovative and well-received trade finance program launched by IFC in 2009.
About HSBC
HSBC USA Inc. ("HUSI") is a Maryland corporation and its principal business is to act as a holding company for its subsidiaries including HSBC Bank USA, N.A. Through HSBC Bank USA, N.A. and its subsidiaries, HUSI offers a full range of traditional banking products and services to individuals, including high net worth individuals, small businesses, corporations, institutions and governments. HSBC USA Inc. is a wholly-owned subsidiary of HSBC North America Holdings Inc.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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