Category: Credit Enhancement and Guarantees
Credit Enhancement and Guarantees
BG – Bank Guarantee explained by Geordon Saraveloz
A bank guarantee is a type of financial backstop offered by a lending institution. The bank guarantee means that the lender will ensure that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. KEY TAKEAWAYS• A bank guarantee is when […]
SBLC – Standby Letters of Credit explained by Geordon Saraveloz
A standby letter of credit (SBLC) is a legal document that guarantees a bank’s commitment of payment to a seller in the event that the buyer–or the bank’s client–defaults on the agreement. The buyer is certain to receive the goods and the seller certain to receive payment. An SBLC is often sought by a business […]
LC and DLC – Letter of Credit and Documentary Letter of Credit explained by Geordon Saraveloz
A documentary letter of credit serves as a written promise of payment provided by a buyer to a seller. With a letter of credit, the buyer’s funds for the required payment are held in a separate account for use when needed, similar to the process for escrow. The seller receives payment when all of the […]
Probably the only way to get access to valid credit enhancement collateral
If your own bank asks you to provide collateral to support your loan request, then Securities Borrowing and Lending is probably the only way to access and benefit from a prime bank instrument. You will need experts to structure and emit your Prime Bank Instrument in the format of an SBLC, a Standby Letters of […]
Securities Borrowing and Lending is probably the only way to generate a valid Bank Guarantee or Standby Letter of Credit – if your own bank refuses to provide you with this service.
With this Securities Borrowing and Lending concept you probably have the only way to generate a valid Bank Guarantee or Standby Letter of Credit if you do not have at least 100% of face value on account with your bank, and your own bank therefore would not issue such an instrument for you. A valid […]