What kinds of counterparty risk are there?
Firms usually look at a few types of risk.
- Credit risk: the other side cannot pay.
- Performance risk: the other side cannot deliver the goods, quality, or work agreed.
- Compliance risk: the other side fails know-your-customer, anti-money-laundering, or sanctions checks.
- Country risk: events in the other side's country stop payment or delivery.
How do firms check a counterparty?
Common checks include company registry records, ownership and beneficial owners, audited accounts, trade references, sanctions screening, and site visits.
Risk can then be reduced with security such as letters of credit, guarantees, credit insurance, escrow, or staged payments.
What is counterparty access?
In commodities, energy, and infrastructure, many deals never reach a public tender. The hard part is getting a direct, credible conversation with the person who decides on the other side.
Counterparty access means opening that conversation directly, with a clear commercial brief, so both sides can start their own checks early.
Where does Vektron Merchants fit?
Vektron Merchants is a marketing agency for energy, commodities, infrastructure financing and industrial firms. We find buyers, offtakers, lenders and partners for companies in these four industries, and we secure meetings with the people who sign.
Frequently asked questions
Does counterparty access replace due diligence?
No. Access opens the conversation. Each side must still run its own checks before signing.
How is counterparty risk reduced in commodity trades?
With checks on the other side, plus security such as letters of credit, guarantees, credit insurance, or staged payments.
Related
General information, not investment, legal or tax advice. Facts are from the public sources listed and may change.