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Leased Standby Letter of Credit (SBLC) Monetization
INSTRUMENT AND SERVICE DESCRIPTION:
Complete Recourse Loan & Non-Recourse Loan Monetization of Leased Standby Letter of Credit (SBLC) for Project Funding
We provide loan monetization services for Leased Standby Letters of Credit (SBLC) aimed at project funding. Clients are not required to pay upfront fees for monetization; we only receive compensation upon project completion. This policy is part of our contractual agreement with our clients and Exeter Group.
How It Works
Through a Leased SBLC, we can monetize the instrument and offer a loan by working with an attorney-trustee office in the USA. This loan often does not require repayment, and if repayments are necessary, they are structured at a low rate. Funds are disbursed from an attorney trust IOLTA federal bank account with a legal opinion to ensure smooth release processes with local banks.
There are 4 Monetizations that We Utilize:
1. Euroclear – The Euroclear process is extremely fast, and the best part is there are no SWIFT fees. Euroclear is one of the most established financial transaction networks in the world and was founded by JP Morgan in 1968.
2. Bank SWIFT – This (BG) is delivered between the two banks through SWIFT MT799 and SWIFT MT760.
3. DTCC – The Depository Trust and Clearing Corporation issue BGs that we accept. Again, through this process, there are no SWIFT fees, and this company was founded in 1999 and is seen as one of the leaders in the industry.
4. Bloomberg – The Bloomberg process is extremely fast and there are no SWIFT fees. Bloomberg was founded in 1981 and is one of the most established financial transaction networks in the world.
Important: We have to option to purchase the Leased Standby Letter of Credit (SBLC) in its entirety or the client can retain their ownership and take out a non-recourse loan. Most clients want to take the route of the Non-Recourse loan payment.
The Monetizer must return the Leased Standby Letter of Credit (SBLC) to the Issuing bank 15 days before the Standby Letter of Credit (SBLC) expiration.
Monetization LTV for a Non-Recourse Loan (this loan have a lower LTV but you don’t have to pay back):
- Loan to Value (LTV) for a Leased Standby Letter of Credit of 10M to 500M – 65% Non-Recourse Loan with a Rated Bank instrument or 45% Non-Recourse Loan with a Non-Rated Bank instrument.
Monetization LTV for a Recourse Loan:
- 10M to 500M Leased Standby Letter of Credit – 65% Recourse Loan with a Non-Rated Bank instrument or 80% Recourse Loan with a Rated Bank instrument – This loan has an interest between 2% to 7.5% per annum and can span up to ten years in length.
Note: 5 % commission is paid on Non-Recourse and Recourse Loans.
How Long Does it Take?
- Up to two weeks after the paperwork is completed or a week after the instrument is SWIFT, DTCC, or Euroclear.
Disbursement of Loan:
- The loan is disbursed in 12 months.
- Once the MT-760 is authenticated, three weeks later 20 percent of the loan will be disbursed.
- A month after the original disbursement 20 percent more will be given.
- Finally, the last 60 percent of the loan will divide over the ten month period and will occur monthly.
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Leased Standby Letter of Credit (SBLC) Monetization
- Once the paperwork is completed, the client’s sends SWIFT MT799 to the bank to set up the release.
- The Monetizer’s bank, after receiving the SWIFT MT799 from the client’s bank, will reply with a SWIFT MT799 RWA to received.
- Once the clients’ bank receives the RWA to received the bank instrument, the client’s sends SWIFT MT760 to the monetizer’s bank.
- Once these SWIFT MT760 are received and authenticated, the monetizer’s must respond within a week to grant the non-recourse loan.
- At the end of a year, the Monetizer has to return the SBLC within 15 days of the anniversary of the contract.
Euroclear & Bloomberg Closing Process:
- Once the contract is signed, the client will talk to their institution and instructs them to use the Euroclear Delivery to coordinate the delivery of the BG.
- The client’s institution must email a certified receipt of the BG delivery through Euroclear.
- Once the receipt is acknowledged the Monetizer has a week to grant the LTV Non-Recourse Loan.
- The BG has to be returned no more than 15 days before the contract has been signed for a year.
Required Documents:
- Fill out the Bank Instrument Monetization Application
- Complete all parts of the Bank Instrument Monetization Application and email it to [email protected]
Compliance Standard:
- Accepted Standard: Bank Instruments HAVE to be from Rated Banks and Delivered through Euroclear, Bloomberg, DTCC, or SWIFT.
- Rejected Standard: Bank Instrument that comes from the Forbidden Assets and Financial Instrument Providers List.
Important Information:
- Please note that the days are banking days and no weekends or holidays are counted.
- Banking Days & Holidays Calculator
- With our bank instruments monetization services, everything is non-negotiable. We will not alter the procedures of this service.
- We don’t issue RWA or BCL letter. This tactic is normally used by clients to shop around for a bank Instrument with a provider institution with a banking letter confirming there is a credit line ready to incentive the provider on sending a bank instrument on their behalf. We will never allow this to happen under our company name.
Recourse Loan Disbursements Example (100 Million Euros):
Bank instrument face value: €100,000,000.00
Recourse Loan disbursement (80%): €80,000,000.00
Loan commission fees (5%): €4,000,000.00
Total Loan Disbursement: €76,000,000.00
Example of Recourse Loan Disbursement Schedule:
Non-Recourse Loan Disbursements Example (100 Million Euros):
- Bank instrument face value: €100,000,000.00
- Recourse Loan disbursement (65%): €65,000,000.00
- Loan commission fees (5%): €3,250,000.00
Example of Recourse Loan Disbursement Schedule:
Read the Leased Bank Instrument Monetization Application & Agreement Below
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Exeter Group
Broker Today!