Risk participation / Forfaiting

Risk participation is an important product to strengthen cooperation among Financial Institutions. As a participant, Bank of China U.S.A. bears part or all of the credit risks of the obligor under international settlement and trade finance, on a funded or unfunded basis. Funded risk participation/forfaiting means that BOC U.S.A. funds the deal in risk participation. Whereas unfunded risk participation means that BOC U.S.A. does not provide funding, however if the obligor fails to fulfill payment obligations at maturity, the bank will make corresponding payments in accordance with its pro-rata share.