London Metals Market - LC's for DMA and other clients

[kurt535]

As per heading......have a pal on the lookout for a bank able to consider offering LC's to a number of clients he has that can't currently trade through him as they don't have a line of credit facility.

Anyone here able to consider/know a company/bank interested in this type of financing?

Ty

[TooLateForAName]

Just to be clear, he wants to have a bank offer credit for people to dabble in derivatives?

[kurt535]

Majority of the potential customers are currently parked at various wholesale banks who can offer the LC. They are, by all accounts, pretty active and generally professional investors, some are also companies. A number have the capability to become CTA's as well. Hope this helps.

[stongle]

Plenty of PBs out there, but if they are struggling with the bigger ones try the mini primes like Jeffries or Cantors.

[kurt535]

stongle said:

Plenty of PBs out there, but if they are struggling with the bigger ones try the mini primes like Jeffries or Cantors.

No, my buddy doesn't want them going to Cantors et al, he wants them coming to him but they need an LC, hence the enquiry here

[DonkeyApple]

kurt535 said:

As per heading......have a pal on the lookout for a bank able to consider offering LC's to a number of clients he has that can't currently trade through him as they don't have a line of credit facility.

Anyone here able to consider/know a company/bank interested in this type of financing?

Ty

Do they all currently use the same PB?

[kurt535]

err, good point...i think they are all tucked up between several banks such as Goldies, etc

[DonkeyApple]

So why not set up with one of them and bring all the other clients in through it?

[kurt535]

cos he doesn't want to leave where he is as it would be a ball ache moving the DMA's he has got to somewhere else.

so, bottom line, he is on the lookout for a bank able to offer the customers who'd move to him but they need an LC.

[williaa68]

I think he will find that the LCs will need to be provided against collateral or the costs will be extremely high. Eg if I have my assets with Standard Chartered, they will happily write me an LC for a modest cost. If i dont have my assets with them I will really really struggle - almost no-one does unsecured trade finance any more unless third party collateral (eg govt export guarantee). Sorry I cant be more constructive / positive.

[kurt535]

williaa68 said:

I think he will find that the LCs will need to be provided against collateral or the costs will be extremely high. Eg if I have my assets with Standard Chartered, they will happily write me an LC for a modest cost. If i dont have my assets with them I will really really struggle - almost no-one does unsecured trade finance any more unless third party collateral (eg govt export guarantee). Sorry I cant be more constructive / positive.

ty

the clients have the cash but the broking house doesn't/cant receive client money for their particular market, hence the need for a bank to park them and then have a bi lateral agreement with the broking house. we did this kind of thing quite a lot in the electricity markets