ITFA AMERICA’S 25TH ANNUAL CONFERENCE – SUMMARY OVERVIEW, July 2022

Contributed By ITFA’s Americas Regional Committee – ARC

After a 3-year hiatus, ITFA Americas (AMRC) staged a warm, well-attended and engaging annual conference in Miami in mid-June.  Arranged in a much shorter timeframe than normal – thanks to mask mandates only being lifted in March – the in-person gathering attracted over 120 practitioners and featured 10 high-quality panel sessions plus a keynote presentation from the US Small Business Administration (SBA).

Preceding the conference, outgoing ITFA Americas Chair Lynn Galkoski (BNY Mellon) hosted its annual general meeting whereat Hernan Mayol (SBA) and Diana Bustamante (Lloyds Bank) were elected as the new Chair and Vice-Chair of the AMRC.  Azi Larsen (Marsh), Toddy Lynady (LiquidX) and Brendan Herley (Levantor Capital) were also elected to AMRC’s board.  ITFA is thankful to Ms Galkoski for overseeing the transition of ATFA into ITFA during the last 3 years while also hosting numerous networking events, growing membership, and strengthening ties and information flow between the Americas and the rest of the world during the Covid pandemic. Our New AMRC Advisory Board: (Top) Lisa Varney, Hernan Mayol, Todd Lydany, Scott Ettien, Lucio Feijo, (Bottom) Diana Bustamante, Lynn Galkoski, Nasrin Nourizadeh, Azzizza Larsen.

In keeping with tradition, the conference began with a lively discussion about today’s global economic and geopolitical environment moderated by Harpreet Mann (Amynta Group) where Steve Ricchiuto (Mizuho Securities), Jonathan Ablett (S&P) and Matt West (Baker Botts) shared their perspectives.

While it remains unclear just how much the US economy will grow in 2022, it’s quite evident that growth forecasts of approximately 3% (stated by the Federal Reserve in March) need to be revised down significantly.  Direct attributable causes include the Russia-Ukraine war, disrupted supply chains, sharp increases in commodity prices, commensurately higher inflation and increases in interest rates.  The panel discussed the ramifications of these factors as well as the impact geopolitical shifts and sanctions on conducting business globally.

Turning to Latin America, insights on prevailing opportunities and challenges were shared by Claudio Soloaga (John Deere Financial), Lucio Feijo Lopes (Feijo Lopes Advogados), Amable Bueno (Komgo) and Daniel Franca (Willis Towers Watson) in a panel moderated by Hernan Mayol (US SBA).

The upcoming presidential election in Colombia (June 19th) was cause for concern in some circles and uncertainty surrounds Brazil’s elections in October.  However, rising commodity prices and improving manufacturing data are helping to lower unemployment levels and boost consumer confidence.  Naturally, the panelists advised that investors conduct due diligence before entering the region or increasing their investments.  But the outlook is more optimistic than a year ago.

The highly topical commodities panel featured 3 excellent speakers – Christine McWilliams (Citibank), Will Tully (Brown Brothers Harriman) and Anton Posner (Mercury Resources) – who advised, among other things, that ‘traders are having the time of their lives’ and that smart trading companies have secured a diverse set of funding partners and solutions such as insurance coverage, securitizations, repos and private placement bonds.

Moderated by Dan Bakle (Marsh), the panel noted these are vital responses to the changing landscape which also include Basel 3 and 4 guidelines, tighter compliance procedures, ESG pressures, and the need for lenders to be able to access information more quickly and completely.

The subject of ESG featured in several of the panels – reflective of its indisputable importance generally – but defining exactly what each of the 3 letters means is surprisingly difficult. For instance, should all 3 parts be treated equally? Should every deal have a ESG ‘consideration’ or score and who sets such guidelines? Is ‘greenwashing’ real and measurable? What happens after the initial goals, KPIs or metrics are met? 

Given the closely aligned interests and emphasis on ESG across the financing and insurance sectors, Ms Azi Larsen (Marsh) moderated a progressively minded panel featuring Andrey Gurevich (IFC), Leonardo Melhem (Deutsche Bank), Harpreet Mann (Amynta) and Lucio Feijo Lopes. 

Less rosy were the views from the legal panelists – Mark Hanchet (Mayer Brown), Michael Sullivan and Roy Andersen (Sullivan & Worcester) – who dissected and dissented on the applicability and enforceability of the numerous fundamental but vital questions raised to date.

Evidently, there seem to be many more questions than answers but what was consensually agreed is that ESG is ‘here to stay’ and ‘related funding needs to be balanced with traditional forms of financing.’

Also new to AMRC’s conference agenda, was involvement from the US Small Business Administration.  During his Keynote speech, SBA Associate Administrator Gabriel Esparza shared a few key stats such as there are 32m small businesses in the US and SBA issued $1.3trn in funding support in 2021 from its 68 district offices vs $50bn in a normal year!

Mr Esparza’s team sits within the Office of International Trade and is determined to raise SBA’s profile, make the agency do a better job marketing itself, and engage more often with private-sector partners.  Future workshops and webinars are expected, just as ideas and additional funding support are welcomed.

The ever-expanding reach of technology also needs to be harmonized with traditional forms of trade funding.  And here, Kunjan Kapadia (360tf), Mariya George (Cleareye.ai), Andrew Holmes (Demica) and Jeff Blumenfeld (MonetaGo), under the watchful eye of Todd Lynady, shared their insights which included trying to improve the review and processing time of supporting documentation, decreasing dual use of goods and fraud risk, and matching sellers and buyers of trade deals depending on geography and preferred debt instruments.

Encouragingly, Fintechs are no longer regarded suspiciously as ‘disrupters’ or ‘dis-intermediators’ but more often seen as collaborators who partner with banks and non-bank investors in a complementary manner, especially when it comes to innovation.

The challenges affecting supply chain finance have been well documented over the last 12-18 months.  But the manner of AMRC’s panel discussion (on SCF) was novel and enlightening, adjudicated by Ms Bustamante.

Rather than re-hash previously reported struggles, Adrian Banks (Mizuho), Emy Ruiz (Fifth Third), Casey Dunn (Deutsche) and Shalako Weiner (Jefferies) openly shared their views on what does and doesn’t constitute a ‘red flag’ when reviewing a corporate client’s invoicing habits and payment trends, the variety of suitable payment structures, and the importance of free cash flow.

Trade credit insurance is a perennial mainstay of ITFA’s conferences for many reasons.  Moderated by Scott Ettien (Willis Towers Watson), the seasoned panelists, André Python (FCIA), Matthew Herzog (Amynta), Ryan Oehrle (SMBC) and Tommy McNamara (Rabobank) advised that while there’s been a surprising steadiness in the number of claims made and paid during the pandemic, one area of potential concern relates to ‘buy now, pay later’.

Depending on the terms of the BNPL contracts, a rise in non-payments may be forthcoming, according to the panelists. Another new area highlighted was the need for cyber coverage as opposed to non-payment coverage. While the two are closely related they are distinctly different, it was claimed.

Where the conference traditionally closed with a discussion on liquidity, this year panelists from Goba Capital (Peter Ryan), Pemberton Asset Management (Steve Elson) and Peridot Financing Solutions (Chad Hildebrandt) shared their views on how and why so-called ‘alternative’ credit providers have grown so swiftly in recent years.

Not limited by the need for ancillary business or a multi-product relationship, such non-bank fund providers are able to support corporate clients with meaningful amounts of capital across the industrial spectrum in a time-sensitive manner.  This is clearly a growing arena that should help close the ‘funding gap’ or at least prevent it from widening further.

ITFA members will be pleased to read that AMRC’s board is actively planning its next networking event in New York in the fall/autumn.  We look forward to seeing you soon.

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