Transferable DC

A special DC for trading and outsourcing business

• Enables your buying agent to source goods from suppliers without having to secure funds or credit facilities
• Provides your buying agent the flexibility to source from many individual suppliers using one credit
• Retains control over the entire transaction as all parties involved follow the same terms and conditions with only a few changes allowed
• Allows your supplier to transfer the credit to the ultimate supplier(s) and source goods without having to secure funds or credit facilities

Do you regularly deal through an intermediary party when conducting trade? Does your intermediary have problems obtaining credit facilities? If so, HSBC can help facilitate this trade with Transferable Documentary Credits.

A Transferable DC is basically a normal DC with an option which allows the intermediary (First Beneficiary/Transferor) to transfer his/her rights and obligations to the ultimate supplier (Second Beneficiary/Transferee). If transferred, the ultimate supplier is also required to supply the goods under the terms and conditions set out by you (Applicant).

It is normally used when the intermediary:

• is unable to supply some or all of the merchandise called for in the DC and thus wishes to transfer part, or all, of the credit;
• is unable to secure Back-to-Back credit facilities from his bankers but the ultimate supplier demands settlement by DC; or
• acts as the sourcing agent and be responsible for distributing the portions of the DC (usually a large amount) to various suppliers.