Non-recourse Loan
We fund international projects using a non-recourse loan through monetization of SBLC/BG
Monetization Of SBLC
Providing an exclusive service structure for SBLC issuance and its monetization for project financing.
Project Loan
Project Loan is provided to corporate borrowers for the purpose of capital expenditure including setting up of new or additional manufacturing facilities, construction, etc.
Trade Finance
Growth for your energy business means growth for our company. At Bayrock Services Ltd, we invest in your success.
Commercial / Project Finance
We fund an international business project using a non-recourse loan through the monetization of SBLC/BG.
Bayrock Services Ltd has extensive experience in the areas of conventional and commercial real estate financing and in the representation of borrowers and lenders in connection with the acquisition, leasing of bank instruments, financing oil & gas trade. We have also developed experience in more specialized financing transactions such as leveraged leasing, synthetic and master lease transactions, and structured financings, including conduit mortgages loans, on behalf of developer clients.
What is a Non-recourse Loan?
A non-recourse loan is a type of loan secured by collateral, which is usually a bank instrument like SBLC or BG. This bank instrument will then go through a monetization process and enter a Private Placement trade program. Therefore, through careful planning, the trade program can make a huge profit and is sufficient to cover the cost of the instrument and the loan granted to the borrower.
We Monetize SBLC to Obtain a Non-recourse Loan
Monetizer gives a non-recourse loan against the SBLC/BG from the applicant borrower. SBLC is the collateral against which a credit line can be made available.
Financial Services
Hence, when an applicant borrower leases an SBLC, he can then get hold of a monetizer. After that, the monetizer can take over the SBLC paper and provide a non-recourse loan against it. A non-recourse loan is a loan that the applicant doesn’t need to pay back. On top of that, top-rated bank leases SBLC the price is between 12–14% inclusive of commissions. So, the applicant must pay 12–14% of the face value of the instrument to the provider after the SBLC is monetized. The instrument is valid for 1 year 1 day. As a result, the monetizer who takes over the SBLC can provide the loan amount of 75% Loan-To-Value (LTV) of the SBLC face value. In other words, the monetizer is willing to pay such a high LTV because the SBLC can trigger his/her credit line in the bank. With the credit line, monetizer can make profits through trade programs over a period of 1 year. Since private placement programs usually trade Medium Term Notes (MTN), the monetizer can reap huge profits that can easily cover the cost of the loan and SBLC cost.
In summary, it is a two-step process – get a bank instrument from a provider and then use it to secure a loan from a monetizer.
We Offer 75% Loan-To-Value Of SBLC
Transaction Terms And Conditions
- Countries eligible – All countries except sanctioned countries.
- Industries eligible – All industries except Military, illegal money laundering
- Accept start-up projects or projects in progress.
- Can loan up to 100% of project needs.
- Minimum amount – EUR 6 million – Maximum amount – EUR 300 million.
- No need to pay back the loan.
- Funds disbursement in tranches.
- First tranche – 20% of the total LTV value.
- Second tranche – 30% of the total LTV value.
- Third tranche – 50% of the total LTV value.
Closing Procedures
- Borrower/client to fill up the application forms, including1- Customer Information Sheet (CIS)2- Letter Of Intent (LOI)3- Company Resolutions (CR)
- Applicant signs Non-Circumvention and Non-Disclosure Agreement (NCNDA).
- Borrower/applicant must pass the KYC process and pay the SBLC transmission cost during the application stage.
- The borrower must demonstrate the capability to provide a collateral deposit to the funder as a project financial guarantee.
- Only for serious borrowers/applicants who can accept the use of bank instruments for project funding.
- Borrowers/applicants must adhere to the funder’s procedures.
- The closing procedure is nonnegotiable.
Monetization of a SBLC / BG
Monetization of BG for Energy Transaction
When offered a choice of monetizing a Standby Letter of Credit or a Bank Guarantee, monetizers will favor a Bank Guarantee as it is non-transferable, whilst the Standby Letter of Credit is a transferable instrument. The LTV, (Loan to Value), for both instruments is the same, however, the exact figure will depend on the contingent liability, of the underlying transaction.
What does it mean to ‘Lease’ a Standby Letter of Credit?
The word ‘leased’ in a ‘Leased’ Standby Letter of Credit, is not an official banking term and is a technical inaccuracy, the proper description being Collateral Transfer and it is thought to have originated from a commercial leasing contract that has similar attributes to a Leased Standby Letter of Credit.
What is a Standby Letter of Credit?
A Standby Letter of Credit is a banking instrument. A buyer and the seller from two separate companies will enter a contract, under instructions from the buyer, their bank will transfer a Standby Letter of Credit to the sellers’ bank, and if the buyer does not honor their financial commitment to the seller, which are stated under the terms of the Standby Letter of Credit, the issuing bank will claim against the Standby Letter of Credit.
Apply With Bayrock Services Ltd
To find out more information about Standby Letters of Credit or to apply for monetization via Bayrock Services Ltd, please contact us to discuss your requirements. Alternatively, please apply using our contact form section to submit your details. Combining two simultaneous facilities effectively, Collateral Transfer is the injection of investment capital via the medium of a Bank Guarantee (or Demand Guarantee) and the fusion of a Lombard loan.
NON-RECOURSE LOAN
OIL & GAS
TRADE
FINANCE!
We are Bayrock Services Limited, a professionally managed, responsible, and ethical company, determined to be widely recognized for our bespoke financial services specially designed for your Bank Guarantee (BG) and Standby Letter of credit (SBLC) lease.
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