FINANCIAL INSTRUMENTS


Collateral Transfer Program

 

Collateral Transfer

Discover the key elements about the “leasing” of Bank Guarantees, also referred to as Collateral Transfer. Bank Guarantee “leases” provide solutions for the following:

a) Raise Urgent Collateral to Secure Credit
b) Simple Underwritting Procedure
c) Business Acquisition / Trading Positions
d) Short to Mid Term Financing

The “Lease” or “Leasing” of Bank Guarantees or indeed the “leasing” of Standby letters of Credit (SBLC’s) are undertaken through Collateral Transfer facilities.

Collateral Transfer is the provision of assets from one party (the Provider) to the other party (the Beneficiary), often in the form of a Bank Guarantee. This occurs whereby the Provider agrees (through his issuing bank) to issue a demand guarantee (the Bank Guarantee) to the Beneficiary in return for a rental or return known as the “Contract Fee”. The parties agree to enter into a Collateral Transfer Agreement (CTA) which governs the issuance of the Guarantee.