COLLATERAL TRANSFER OF
STANDBY LETTER OF CREDIT
Collateral Provider Procedures
collateral provider provides a callable Standby Letters of Credit (SBLC) from one of the top banks.
role of Collateral Provider is to initiate the transaction and ensure it is completed
smoothly. The collateral provider utilises a dedicated Advisor and Facilitator
with a London lawyer regulated by the SRA in England.
procedures are based on payment after delivery. This means that the premium is
payable after the recipient bank has received and verified the SBLC. The
payment mechanics are automated through English lawyers using a letter of
undertaking from the client’s law firm to the collateral provider’s law firm.
are as follows:
Collateral Provider will require the Client completes and returns our KYC /
We then require evidence of the client's financial capability to pay the Fee
for the instrument.
After execution of the Introduction and Advisory Agreement, the Client will
instruct his Law Firm to issue a fee undertaking to the nominated Law Firm of
the collateral provider’s facilitator.
On receipt of the Fee Undertaking, the Issuing Bank issues a pre-advice via
bank SWIFT in the form of MT799 as prescribed in the contract to the client’s
On receipt of the 799 by the Receiving Bank, the Receiving Bank will confirm
acceptance and verification by SWIFT to the Issuing Bank.
Following receipt of the 799 by the Receiving Bank, the Issuing Bank will issue
the SBLC via bank SWIFT in the form of MT760 (the “760”) as prescribed in
the contract to the Receiving Bank.
On receipt of the 760 by the Receiving Bank, the Receiving Bank will confirm
acceptance and verification by SWIFT to the Issuing Bank (the “Receipt”).
After the actions defined above are completed and evidenced by the Issuing
Bank’s receipt, the client instructs Law Firm to invoke the Fee Undertaking and
to transfer the fee as described in the undertaking. (MUST BE UK LAW FIRM OR INTERNATIONAL LAW FIRM WITH OFFICE IN THE UK)
Following transfer of the fee as defined by the Fee Undertaking, the receiving
Law Firm will confirm receipt of the fee and the procedures close
The cost of the
SBLC is 13%. + 2%
term of the SBLC is 12 months. The SBLC is commonly referred to as a usance
SBLC which means it is callable at the end of its term.
SBLCs have been routinely monetised by previous clients. If the client
needs assistance, Collateral Provider can work with the client to facilitate monetisation.
confirm that these procedures are agreed to and then the standard documentation
which includes a blank contract and example of the wording will be issued. This
differs according to the requirements of the recipient bank.