COLLATERAL TRANSFER OF

STANDBY LETTER OF CREDIT

Collateral Provider Procedures

 The collateral provider provides a callable Standby Letters of Credit (SBLC) from one of the top banks.

The 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

The 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.

The procedures are as follows:

1. Collateral Provider will require the Client completes and returns our KYC / CIS document.

2. We then require evidence of the client's financial capability to pay the Fee for the instrument.

3. 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.

4. 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 receiving bank.

5. On receipt of the 799 by the Receiving Bank, the Receiving Bank will confirm acceptance and verification by SWIFT to the Issuing Bank.

6. 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.

7. 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”).

8. 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)

9. 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

Cost

The cost of the SBLC is 13%. + 2%

 Term

The 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.

Monetisation

These SBLCs have been routinely monetised by previous clients. If the client needs assistance, Collateral Provider can work with the client to facilitate monetisation.

Documentation

Please 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.