STANDBY LETTER OF CREDIT AND
BANK GUARANTEE (BG) PROVIDERS
The lease and purchase of bank/financial instruments in form of Standby Letter of Credit popularly known as SBLC and Bank Guarantee popularly known as BG from us is achieved through what is referred to as “Transfer of collateral” or “Collateral transfer”.
The mechanism is activated when a client approach us as the provider to issue a BG or SBLC in return for a return/contract fee.
Both parties agree to enter into a contract that governs the issuance of the guarantee as guided by International Standard Practices of the industry and the ICC. Such contractual agreement is referred to as a Deed of agreement (DOA) or a Collateral Transfer Agreement (CTA).
The term “leasing a Bank Guarantee or Standby Letter of Credit” is loosely used for such transactions but it is logically impossible to physically hand out a Bank Guarantee or Standby Letter of Credit, and, rather it should be clearly represented in a form of securities/bank instrument collateral lending. This is why there is never a reference to the word “lease” in a Bank Guarantee (BG) or Standby Letter of credit (SBLC) verbiage. This single fact helps the beneficiary of such lease to
SBLC & BG Providers
The Standby Letter of Credit and Bank Guarantee is provided by our bank (as the provider) to the beneficiary’s account/bank and it is transmitted interbank only through SWIFT (MT760). During the lifespan of the instrument, the beneficiary may utilize it for the two main and popular purpose of credit enhancement (raise loan, enhance credit line) or as a payment guarantee (Trade positions of a buy and sell contract for good and/or services to be rendered). At the end of the tenure of the agreement that guided the issuance, the beneficiary is expected to return the bank guarantee to our issuing bank without encumbrances or liens and the beneficiary also has the obligation to indemnify us against any loss incurred against such instrument. In addition, the beneficiary also has the option of extending the contract because our collateral transfer agreement or Deed of agreement always comes with an option of rolls and extension of up to 5 years and in some cases 10 years depending on how strong the beneficiary is placed and our due diligence.
Our Bank Guarantees and Standby Letter of Credit are available from the range of $/€5 million to United States $/€ 20 Billion. Any amount over $/€500 Million is achievable in tranches till the maximum limit is expended. All depends on the intake capacity of the beneficiary/applicant.
Our Bank Guarantee and Standby Letter of Credit is issued from AAA rated banks only and it is widely accepted in all banks in the world with some exception that we may not be willing to send out a SWIFT to some banks/financial institutions based on our previous experience and relationship with such bank/institutions. There is always an option for the applicant/beneficiary to submit their verbiage for review depending on the approval of our bank otherwise, our bank’s standard verbiage will be used in SWIFT transmission of such bank instrument which will be made available in the contract which is usually in the ICC758 (UPC 600) format which is widely accepted for activation of credit line.
Our contract fee is charged at a rate of 5% to 8% and there are variables that determines this which all falls on our due diligence on the beneficiary/receiver and obviously, the contract size also has an effect on the pricing.
Why Choose Us As Your Bank Guarantee (BG) Provider And Standby Letter Of Credit (SBLC) Provider
Our Bank Guarantee and Standby Letter of Credit BG/SBLC are all cash backed.
It is a well-known fact that banks are prohibited from soliciting for applicants to issue them a bank guarantee and standby letter of credit by international law. Hence, we as an intermediary, having put in place a concrete relationship with our bank, and a huge portfolio, we have mitigated them by creating a conducive ground for Bank Guarantees (BG) and Standby Letter of Credit (SBLC) in secondary markets while profiting from such ventures.
We have a well-designed structure and business to also defend any Bank Guarantee or Standby Letter of Credit facility being issued by our bank.