Services

 

 

 

We facilitate the lease and purchase of bank/financial instruments, such as Standby Letter of Credit (SBLC) and Bank Guarantee (BG), through a process known as "Transfer of collateral" or "Collateral transfer". This process is initiated when a client approaches us as the provider to issue a BG or SBLC in exchange for a return/contract fee.

Both parties agree to enter into a contract that governs the issuance of the guarantee, following the International Standard Practices of the industry and the ICC. This contractual agreement is commonly referred to as a Deed of Agreement (DOA) or a Collateral Transfer Agreement (CTA).

Although the term "leasing a Bank Guarantee or Standby Letter of Credit" is often used in these transactions, it is important to note that physically handing out a Bank Guarantee or Standby Letter of Credit is not possible. Instead, these instruments are represented in the form of securities/bank instrument collateral lending. This is why the word "lease" is not mentioned in the verbiage of a Bank Guarantee (BG) or Standby Letter of Credit (SBLC). This fact is beneficial for the beneficiary of such a lease.

Bank Instrument Providers

 

 

 

The Standby Letter of Credit and Bank Guarantee are provided by our bank to the beneficiary's account/bank. It is transmitted interbank only through SWIFT (MT760). The beneficiary can use the instrument for credit enhancement or as a payment guarantee for trade positions. At the end of the agreement, the beneficiary must return the bank guarantee without any encumbrances or liens and indemnify us against any loss. The contract can be extended for up to 5 or 10 years, depending on the beneficiary's strength and our due diligence.

Our Bank Guarantees and Standby Letter of Credit are available from $/€5 million to $/€10 billion. Amounts over $/€250 million can be achieved in tranches. The instruments are issued from AAA rated banks and widely accepted worldwide, with some exceptions based on our previous experience and relationships. The applicant/beneficiary can submit their verbiage for review, but our bank's standard verbiage will be used unless approved. The contract fee is 4% to 8%, determined by our due diligence and the contract size.