A financial instrument can technically be leased from an account holder, asset owner, or asset management company in practice.

We have received numerous inquiries from brokers worldwide, via email each week, asking how to monetize a leased bank instrument (SBLC, BG, MTN, Bank Draft).

From what they assume, something cannot be monetized if it is leased, as it does not belong to the lessor anymore. VERY SIMPLE, they say!

While brokers are correct in treating a bank instrument as a simple asset, they are mistaken when it comes to monetization. The use of a financial instrument is primarily for credit enhancement, and the monetizer, along with the receiving bank, requires a credit facility. When a company or individual leases various types of assets, such as a car, they gain the right to use the asset for a specified period. Similarly, the lessor can monetize a leased bank instrument.

Does the Bank Instruments worth something?

The answer is YES; it does.

1. Bank Instruments (assets) are of value.

2. It can come under the usage of any individual or company able to monetize it with a credit facility, in turn generating profit – enough to pay for the provider fees, any loan granted to the beneficiary, and monetization cost.

How is the Attorney’s Trustees Office able to provide a Non-Recourse or Recourse Loan with a Leased Bank Instrument?

We can assure you that it is not for charity!

Our attorney’s trustees have a carefully devised financial strategy through various trading programs, which is why they are willing to accept any owned or leased Bank Instrument. In return, they provide a Non-Recourse or Recourse loan that covers the monetization and the loan given to the provider. Throughout this process, they will also generate significant profits.

Finance A Business Using A Bank Instrument

Bank Guarantees (BG) and Standby Letters of Credit (SBLC) can be used to fund a business, particularly those looking to expand or grow. Monetizing a BG/SBLC is one of the quickest and most efficient ways to secure essential funds for a company. Bank securities can be monetized and used to create markets for trading, offering a valuable alternative method to access capital.

Swift Fees

When a client applies for a Bank Guarantee or Standby Letter of Credit, many do not fully understand the procedures involved in the transaction. Some buyers mistakenly believe that issuing a bank instrument comes with no fees and assume that the SWIFT messaging service is free. This is entirely false. Banks from both parties use SWIFT messages to communicate, and sending a SWIFT message is not inexpensive. These bank charges typically amount to at least 2% of the face value of the BG or SBLC.

How Do BGs and SBLC’s leasing Work?

When a corporation completes the leasing application for a BG/SBLC, they are essentially offering collateral through what is technically referred to as a temporary “CTA” (Collateral Swap Agreement). For example, let’s say you’re a petroleum refining company looking to purchase €100 million worth of oil from ABCD Oil. If you have €18 million on your books, you don’t have to use your own bank account. Instead, you can request a Standby Letter of Credit from another provider, bypassing your own bank entirely.

There are many ways to use BGs / SBLC’s, all in the MT760 language. We may issue a BG or SBLC for:

• Trade and exchange (to buy goods).
• They could also be used to back up credit lines provided by banks and/or projects finance.

Additionally, we can issue monetizable cash-backed BGs/SBLCs. However, in order to grant the BG/SBLC in favor of the Monetizer, we must first know the identity of the monetizer to properly assign the BG or SBLC on their behalf.

Lease An SBLC

You can lease a BG/SBLC in one of two ways. One option is to register with your bank for a Standby Letter of Credit, or alternatively, you can work with a bank instrument provider like us and complete a Deed of Agreement (DOA). Please note that the terms and timelines are NON-negotiable. We strongly advise buyers to fully understand the documents before signing. Double-check all your information to ensure consistency and accuracy, as even a small mistake can lead to significant costs.

What Parts Do Banks Play in BG / SBLC Transactions?

The Bank not the Initiator but is the Deliverer of the Transaction.

Technically speaking, banks do not issue Bank Guarantees or Standby Letters of Credit. Instead, the bank serves as the deliverer, not the initiator of the transaction; they confirm that their client has sufficient funds. The bank is merely the courier for the BG and SBLC, working on behalf of the actual asset owner, asset holder, or asset manager. For example, consider a courier delivering a parcel to a customer. In this scenario, you are the Provider of the parcel, and the courier is simply the delivery agent responsible for transporting the parcel from your location to the receiver’s location. The courier is not the provider of the parcel; they are just the agent facilitating the delivery.

Using the example above, banks treat Bank Guarantees and Standby Letters of Credit in the same manner. The bank acts as the courier, receiving a financial order from the supplier to send one of the provider’s assets (BG or SBLC) to the receiver’s bank. In other words, the banks, acting as couriers, are primarily involved in sending and receiving SWIFT messages such as MT760, MT799, and others, between the sender and the recipient.

Beyond receiving fees for “cutting” (initiating) and “delivering” the bank instrument, the bank holds no interest in the transaction. Once the financial instrument is issued and secured against the provider’s cash position in their bank account, all responsibility for the asset lies with the provider.

Reasons Why Banks Don’t Issue Bank Instruments BGs & SBLCs

If a bank wants to raise Capital, it DOESN’T uses BGs or SBLC because the bank either issues:

• A/ Bank Bonds
• B/ MTNs (Mid Term Notes)
• C/ Bank Stock or Shares
• The Bank NEVER uses its cash to secure or encumber a Bank Instrument BG or SBLC. In the Bank, BG or SBLC are secured against client cash accounts of the Provider.
• BGs and SBLCs are niche market client products instead of Bank products created at high net worth Bank clients’ requests with significant cash holdings at the Bank.
• Tell the Bank Officer at your local World Top 25 Bank Branch that you want to buy a Leased Bank Guarantee. As BGs and SBLC is NOT a publicly offered Bank product.

Genuine Bank Instruments Providers

Finding genuine BG/SBLC providers can be challenging. Banks do not market BGs/SBLCs as their own products because they are not authorized to do so. Bank Guarantees and Standby Letters of Credit are typically issued by high-net-worth clients with substantial capital reserves, such as private equity firms, hedge funds, pension funds, and large corporations. Not only is it difficult to connect with providers of bank instruments, but they also have stringent requirements and do not engage in unnecessary dealings.

Authentic providers, like ourselves, implement several safeguards to ensure that only approved mandate representatives associated with providers are involved. This is beneficial for us, as it guarantees that we are conducting legitimate business. However, any company we work with must adhere to these protocols. Due to these strict regulations, Prestige will inform you of the necessary requirements. Generally, we will ask for Proof of Funds (POF) and a Bank Comfort Letter (BCL) to verify that you can pay 10% of the face value of the bank instrument. We want to ensure that any company we engage with is capable of paying the lease fee.

Why are Bank Instruments Providers so Hard to Find?

1. Issuing BGs and SBLCs requires a highly specialized financial skillset, which is why there are very few genuine providers. Most high-net-worth investors lack the expertise and time to manage the complex process of issuing these bank instruments themselves.
2. The reality is that you need the bank instrument provider far more than they need you. Genuine providers are extremely selective about who they do business with, as they already have more clients than they can accommodate.
3. High Net Worth corporations are usually the Bank Instruments Providers who have other ways of investments available.
4. As the Monetizer fails to perform as per transaction procedures, 80% of BGs and SBLCs provide deliveries to third Party’s Monetizers FAIL.
5. The bank instrument world is filled with uninformed investors who have little understanding of how bank instruments work or their purpose. Many mistakenly believe that BGs and SBLCs simply appear out of nowhere for free, without any upfront fees, and that the world owes them a living.