Monetize Your Financial Instruments
Complete Recourse Loan & Non-Recourse Loan Monetization of Leased Bank Guarantee (BG) for the intention of Project Funding.
Monetizing bank instruments in the process of liquidating bank instruments by converting them into cash. We monetize Bank Guarantees (BG’s), Stand-By Letters of Credit (SBLC or SLOC), Bank Draft, Medium Term Notes (MTN’s) and some Long Term Note (LTN) for our clients. To monetize a bank instrument you must be in possession of the BG, SBLC, Bank Draft, MTN or LTN.
We never require our clients to pay upfront fees for monetization, we monetize your instruments, by giving you a Loan, that our group is capable to negotiate, through a properly established Facility Provider, a loan that in most cases, you do not need to pay back, or even if you do, it will have a very low interest rate. Our clients will receive their loans disbursements from an attorney trust bank account with a legal opinion so our clients won’t have to deal with releasing their funds with their 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.
Monetization LTV for a Non-Recourse Loan:
- Loan to Value (LTV) for a Leased Bank Guarantee (BG) of 5 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:
- 5 to 500M Leased Bank Guarantee (BG) – 100% Recourse Loan with a Non-Rated Bank instrument or 200% 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. (Bank Instrument will have to be blocked or renewed until the loan’s duration is complete).
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.
Notes:
- Disbursement of the loan in 12 months.
- The bank of the Monetizer can answer with a Payment Undertaking for up to 10% of the face value of the purchased Bank Instrument which can be paid within 5 days after the MT-760 is authenticated.
- Any payment that occurs with the Payment Undertaking is taken from the disbursement of the loan
Brokers & Consultants:
- Always 100% Protected & Respected
- Healthy Commissions Paid
- Be Direct to the Finance Source, NOT in a Broker Chain!
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Bank Guarantees (BG’s)
A Bank Guarantee (BG) is an irrevocable commitment done by a bank on behalf of its client and promised to meet all financial obligations of its client in case of default. A BG is the European form of the well-known “Stand by letter of Credit” (SBLC or SLOC) issued by most banks in the USA. In practical and financial terms, a BG and an SBLC are essentially the same things; when they are cash-backed, they are used as collateral. BG’s can be used to enhance your ability to apply for a line of credit with your bank; they can be used as collateral when your bank is asking for additional comfort when you ask them to fund your project.
Now, a BG is obtained from a bank by “someone” blocking their funds on your behalf; if this “someone” is you as well, then you “own” the BG because you own the funds backing it up too But if you do not “own” the whole amount of funds to be blocked so the bank issues the BG, then it is what most people will call a “leased” BG; in other words the BG is owned by the issuer/owner of the funds, and you are only the beneficiary of the Bank Guarantee.
No matter if the BG is owned or leased, for us to monetize it, in the body of the BG, they must be callable, Irrevocable, Unconditional, fully Transferable and Assignable.
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Stand-by Letters of Credit (SBLC or SLOC)
A Stand-By Letter of Credit (SBLC’s or SLOC’s) is an irrevocable commitment done by a bank on behalf of its client, and promised to meet all financial obligations of its client in case of default. A SBLC is the USA form of the well-known “Bank Guarantee” (BG) issued by most banks in Europe. In practical and financial terms, a BG and a SBLC are essentially the same thing; when they are cash-backed, they are usable as collateral.
Now, while BGs can be used to enhance your ability to apply for a line of credit with your bank; SBLC’s cannot be used directly in the same form. Bank Guarantees can be issued as the primary means for meeting the loan or facility repayment terms; however, SBLC’s are issued as a contingent liability of the issuing banks and are issued in conjunction with a primary means of underwriting being considered. In effect SBLC’s are as they sound… in a “Stand-by” position to a primary means of repayment. Bank Guarantees can be issued to be the primary means for repayment, in which case they are not necessarily contingent in nature. Because of the contingent and secondary means of collateral nature of the SBLC, it would be considered counter-intuitive for a bank to underwrite a loan or facility strictly on the basis of receiving an SBLC. A bank lending against an SBLC alone in such a manner would in effect be purposefully underwriting a loan with the expectation that there was to be a default… Which is not something your typical bank regulators would approve. This is why you cannot just go to your bank and ask them to monetize the SBLC for you, and why our services are so important in the monetization process; because we provide the primary means to secure the loan, and the SBLC is used to enhance said primary means.
Now, just like with a BG, an SBLC is obtained from a bank by “someone” blocking their funds or assets on your behalf; if this “someone” is you, then you “own” the SBLC because you own the funds/assets backing it up. But if you do not “own” the whole amount of funds to be blocked so the bank issues the SBLC, then it is a “leased” SBLC; in other words, the SBLC is owned by the issuer/owner of the funds, and you are just the beneficiary.
No matter if the BG is owned or leased, for us to monetize it, in the body of the BG, they must be callable, Irrevocable, Unconditional, fully Transferable and Assignable.
SBLC’s are generally issued for 1 year and 1 day, but we need them to be issued for 1 year and 1 month, or 13 months; this can easily be arranged with your bank. Once issued, the SBLC is transferred to your bank via the SWIFT Message type MT-760.
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A bank draft is a check drawn on a bank’s funds, similar to a cashier’s check. The funds might be held in the same bank that creates the draft, or the money behind the draft might be held in the bank’s account held at a different bank.
The term bank draft is used for other situations, and use varies from country to country.
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Medium Term Notes (MTNs)
A Medium Term Note (MTN’s) is a tradable and discountable debt instrument issued by banks, collecting an annual interest before expiring upon maturity with a specified face value. MTNs can be provided to Clients in need of recourse collateral, non-recourse collateral or for credit-enhancement purposes.
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Long-term notes are similar to bonds, since they both carry a stated or implied rate of interest and have a known maturity date. Unlike a bond, notes payable are not issued to the public and traded. They are typically bilateral agreements between the issuing company and a trade partner or financial institution. For example, a three year loan obtained from a bank would be classified as a long-term note payable.
General Terms for the Monetization of instruments
We, through a properly established Facility Provider, monetize your instruments: Bank Guarantees, Stand-by Letters Of Credit, Bank Draft, or Medium Term Notes; by giving you a Loan, a loan that in most cases you do not need to pay back, or even if you do, it might be at a two percent interest rate per annum.
The instrument needs to be a Bank Guarantees (BG), Stand-By Letters Of Credit (SBLC or SLOC), Bank Draft, Medium Term Notes (MTN), or Long Term Note (LTN) We cannot monetize any other kind of instruments.
The instruments need to have a face value from 10 to 500 million Euros or USD per tranche. Smaller amounts are not enough to justify a Non-Recourse Loan.
We do not buy the instruments, we only give you a Loan. Furthermore, we need to block them for “One Year and One Month” or “Thirteen Months” by an MT-760 SWIFT Message, EUROCLEAR or DTCC. No other method of blocking is accepted.
The bank issuing the instrument must be one of the TOP 100 words Banks.
The documents you send to us, need to be unaltered in any way or form.
The procedure mentioned by us for obtaining a Loan using a BG, SBLC, Bank Draft, LTN or an MTN as collateral has another great advantage to the owner/beneficiary of the instrument: there is no lengthy and sometimes absurd paperwork, like several months of project planning and preparing, submission to several banks for credit committee approval and so on. The monetizer takes care of that in just a few days, and then the owner/beneficiary of the instrument can receive the proceeds of the Loan, and start immediately to invest in his/her projects without having to worry about payments or interest rates, since in most cases there will be nothing to pay back.
To be clear, the instrument gets returned back to the owner/beneficiary after the 13 months had passed, free of any liens or encumbrances of any kind, the instrument’s owner/borrower does not have to pay back the loan itself. Yes, we do give a low LTV when compared to others, but then again, there is nothing to pay back, it is like free money, and you can really use the proceeds of the loan for whatever humanitarian project you might want to use the money for. Of course, if there are any taxes you might need to pay for ANY reason, you will be the only one responsible to pay them too.
The procedure used by us is slightly different from other monetizers: simple and easy. However our procedure cannot be easily bent; you either comply with it and get a Non-Recourse Loan, or, NOT comply with it, and get nothing.
However, do not forget that there is no advance payment or up-front fees of any kind from you to us. Our bank first receives the MT-760 by SWIFT, EUROCLEAR or DTCC Delivery, and then the owner/beneficiary of the instrument/borrower and the intermediaries get paid, all at the same time.
Monetizers bank can reply with a Payment Undertaking after the pre-advise has been received for up to 10% of the face value of the Bank Instrument payable in 5 banking days after confirmation and authentication of the MT-760 in case client needs to pay banking processing fees it is necessary.
Now that you know the kind of instruments we deal with, and the conditions we have for such operations, if you are still interested, here is the procedure:
Procedure for Monetizing your Instruments:
- Bank Guarantee Monetization (BG) – Leased
- Standby Letter of Credit Monetization (SBLC) – Leased
- Bank Guarantee Monetization (BG) – Owned
- Standby Letter of Credit Monetization (SBLC) – Owned
- Bank Draft Monetization – Owned
- Mid Term Note Monetization (MTN)
- Long Term Note (LTN)
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