Korea Trade Insurance Corporation and Deutsche Bank Collaboration
POSCO International Singapore Subsidiary Becomes First Beneficiary
"Reducing Debt and Improving Trade Terms"
POSCO International announced on the 26th that it has become the first domestic company to receive the No. 1 security for 'Global Sales Insurance (Securitization)'.
Lee Gye-in, President of POSCO International (from left), Park Hyun-nam, Head of Deutsche Bank Seoul Branch, and Jang Young-jin, President of Korea Trade Insurance Corporation, are posing for a commemorative photo at the 'Global Sales Insurance (Securitization)' No. 1 bond delivery ceremony held on the 26th at the Trade Insurance Corporation in Gwanghwamun, Seoul. Photo by POSCO International
At the securities handover ceremony held at the Korea Trade Insurance Corporation in Gwanghwamun, Seoul, on the morning of the same day, Lee Gye-in, President of POSCO International, Jang Young-jin, President of Korea Trade Insurance Corporation, and Park Hyun-nam, Head of Deutsche Bank Seoul Branch, attended. They discussed the importance of global financial cooperation and future expansion directions.
Launched in November last year, Global Sales Insurance (Securitization) is a financial product in which banks purchase overseas subsidiaries' accounts receivable of Korean companies under the condition of non-recourse (meaning the bank does not hold additional liability even if the receivables become bad debts). The insurance policy from the Korea Trade Insurance Corporation acts as a guarantee.
Overseas subsidiaries can secure operating funds even before collecting payments, and banks do not classify these as risky assets, reducing the burden of loan loss provisions. Additionally, since this is a sale rather than a loan secured by accounts receivable, it has the advantage of reducing the company's debt burden.
The Korea Trade Insurance Corporation provided the insurance policy to support stable funding for overseas subsidiaries, and Deutsche Bank purchased the accounts receivable based on this, helping to quickly secure liquidity. Through this, POSCO International was able to reduce its debt scale and conduct trade transactions under more favorable conditions.
The first beneficiary of this insurance policy is POSCO International's Singapore subsidiary. POSCO International explained that it was able to receive the No. 1 security by being recognized for its years of international trade performance based on a global network spanning over 80 countries worldwide.
This cooperation is evaluated as a new successful model that supports stable funding while lowering corporate debt burdens. POSCO International expects it to serve as an opportunity to further strengthen the overseas expansion and financial procurement competitiveness of domestic companies.
President Lee Gye-in said, "Through this product, our local subsidiaries can secure working capital at low interest rates and improve financial ratios, which will further enhance POSCO International's business competitiveness," adding, "It will be an important milestone in global trade finance."
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