SBLC for $ / Euro 20 million or more from any one of the top banks like HSBC UK, Deutsche Bank Germany, RBS London, or Barclays UK are all acceptable for monetization.
VERY IMPORTANT: SBLCs, BGs and BANK DRAFTS must be issued in the NAME OF THE MONETIZER. All bank instruments issued in the name of the client or any other third party can not be monetized unless these are re-issued in favour of the designated bank account of the Monetizer
1. The Client will send us a complete KYC pack with full banking coordinates. The name of the Monetizer and the information for Monetizer’s bank will be provided only after the client submits their KYC, POF and RWA letter and that is accepted / approved.
2. If the SBLC is already issued:
The Client will send copies of original SBLC and also ATV to verify on Bank to Bank basis. The SBLC owner must be willing to re-assign / reissue the bank instrument in favour of the monetizing group backed by MT760. LTV for non-recourse monetization might be 70% of its face value [subject to confirmation, verification and if it is originating from a top AAA rated bank].
3. If the SBLC is yet to be issued:
If the SBLC is not issued as yet, the client will arrange to send a RWA letter from the SBLC issuing bank with his KYC pack. After the positive verification of the Bank RWA letter, the client’s SBLC issuing bank will send a free message MT199 to the designated bank of the monetizer as per desired verbiage. We will need a free message MT199 direct from the issuing bank sent to our designated bank confirming that it is RWA to issue MT760 within the next 2 to 3 days. Then we can issue a contract and offer an agreed percentage of the issued bank instrument.
4. The Monetizer’s Bank will then reply by MT 199 that it will accept the SBLC or bank guarantee and follow instructions of the monetizer as explained in the DOA after positive verification of the bank instrument.
5. The Client will then send the SBLC in favour of the Monetizer and Swift MT 760 to the designated bank account of the Monetizer. The Issuing Bank will also post the hard copy of the Bank draft to the Monetizing bank by bank courier.
6. After positive verification of the SBLC, the Monetizer’s Bank will follow instructions of the monetizer as explained in the DOA and might remit the agreed amount to the designated bank account of The Client by Swift MT 103.
7. At the same time commission will be paid to all named intermediaries as mentioned in the DOA.
Payments of the monetized amount will be made as follows.
1. If this is a leased bank instrument, then the LTV might only be 60 to 70% [minus the agreed commission]
[Note: LTV changes with issuing bank & face value of the instrument]
2. If they own the BG or SBLC and want to sell it then the client might get 70 – 80% [minus the agreed commission]
3. If the client wants to put the monetized amount on trade, the trader might offer 70% [minus the agreed commission] and put the monetized amount on trade. A separate trade agreement sent by the trader will spell what they might earn from such trade.
4. Pay out will be in three instalments:
10% of the agreed LTV within first 10 days after positive verification of MT760,
40% of the agreed LTV within next 10 days.
Balance 50% in the last 10 days – total pay-out within 30 days.
5. Non recourse monetization will not need to be paid back. We will claim our one time success fee after the monetization is complete. The commission we get may be shared with any intermediary managing this deal.
We can not give out the name of the bank which might be used by the monetizer. You have to send us full KYC of the client and his bank instrument details. That will then go to the intake officer. He will do a Due Diligence on the client and the bank instrument. If the DD is cleared then he might receive a contract – which if signed by the client and the monetizer – will then be implemented. The SBLC will then be sent to the designated bank account of the monetizer and the client will get his agreed percentage in 30 banking days. This procedure has to be followed.