Redwood Markets and One Source Risk Management have chosen EH Energy, a division of Euler Hermes North America Insurance, to lead a syndicate of underwriters to handle trade credit insurance for the liquefied natural gas (LNG) market through its online trading platform, the Redwood Marketplace.

The insurance is intended as a replacement for letters of credit (L/Cs) that are currently used to execute deals brokered on the platform.

Customised suite

The new programme will utilise a customised suite of trade credit insurance products to provide trade credit and political risk insurance that will protect transacting counterparties in the event of a failure to pay.

Sellers of cargoes of physical LNG who enter into transactions using the Redwood Marketplace online trading platform will be able to buy trade credit and political risk insurance at the point-of-sale.

Unlocking working capital

According to Redwood Markets, buyers benefit from unlocking working capital that may be tied up posting L/Cs.

The firm claims the platform, coupled with its online trade confirmation system, simplifies the transaction process for traders and helps provide a more complete range of risk management products.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.