Posted on by Swift Giants Swiss
The guarantor bank is not obliged to supply goods or perform work on the principals behalf. It will not, for instance, build an airport itself if its client fails to do so, neither will it manufacture or supply looms or chemicals if its client falls behind with deliveries. The banks commitment is solely a financial […]
Posted on by Swift Giants Swiss
Standby letters of credit (SBLCs) originated in the U.S., where old banking legislation forbade commercial banks to issue contingent liabilities in the form of guarantees (bonds) from the late 1930s onward. Documentary credits were therefore used for this purpose. Subject to the Uniform Customs and Practice for Documentary Credits (UCP), they were then modified into […]
Posted on by Swift Giants Swiss
In 1992, the International Chamber of Commerce (ICC) in Paris issued a new set of regulations titled ICC Uniform Rules for Demand Guarantees (ICC Publication no. 458). These rules were the product of a joint working group of representatives of the Commission on International Commercial Practice and the Commission on Banking Technique and Practice. The […]
Posted on by Swift Giants Swiss
In international trade dealings, buyers and sellers often experience problems of trust within each other to honour their payment obligations. A seller may find it difficult to ascertain the buyers willingness and ability to make payment, whilst the buyer may not be convinced that the seller genuinely intends to perform his side of the agreement […]
Posted on by Swift Giants Swiss
When applying to a bank or private lender to receive a credit line against a leased bank guarantee (often called monetization), banks and private lenders alike may also request the applicant (borrower) to offer a pledge over his share holding as security for the repayment of the credit. A bank or lender will not want […]
Posted on by Swift Giants Swiss
Whilst we experience a major up-turn in the popularity of using so-called leased bank guarantees to secure credit lines, commercial loans and project finance, many borrowers and principals do not fully understand the concepts. Firstly, there is no such thing as lease or leasing of bank guarantees. The correct term is Collateral Transfer. Where the […]
Posted on by Swift Giants Swiss
(Leasing Bank Guarantees) At this time of economic hardship and uncertainty, international companies are turning to sophisticated investors to raise adequate collateral through collateral transfer arrangements (lease of bank guarantees) and securities lending to raise their much needed project capital. It is common knowledge that lending banks, private equity investors and private lenders have all […]
