Real Estate Real Estate

Raising Capital for Real Estate Ventures

Written by Jenny Bowler on . Posted in Industry, News & Reports, Real Estate.

There are three types of real estate, Residential Real Estate, Commercial Real Estate, and Industrial Real Estate. As the underlying values and business all differ from one sector to another, it follows that financing for these three separate sectors will differ as well. Here at IntaCapital Swiss, we have facilitated many real estate projects across the globe. We explain how we facilitate such projects via the means of Collateral Transfer – raising capital or credit for businesses to push forward with their planned projects. Read on to understand more detail or get in touch with one of our financial advisors today for bespoke information, tailored to your project.

Residential Project Finance 

Residential project development can take differing forms, from pulling down existing buildings for a rebuild, purchasing land for residential development, expanding development next to existing properties and renovation of properties that are run-down. 

Developers looking to fund the above projects will look to secure residential real estate development loans or investments. Critical to the success of a residential project is choosing the appropriate financial model as there are many financing options available for residential construction. 

There are several specialist companies, (property investment firms) that provide loans /investment for smaller and larger property developments. Banks provide straight secured debt. Larger projects are funded by venture capitalists, private equity funds, vulture funds, senior family offices and hedge funds with either a debt-equity split or straight equity funding. In some cases, a bank may provide debt funding on a syndicated basis if the loan amount is of significant value and the client is considered as a “blue chip”. 

Finance can be made available from the start to the finish of the project. This means that the lender/investor will finance the purchase of the land, finance the construction of the project to turnkey, and finance the marketing operations. In another case, the developer may already own the land and may just require construction finance.  

In other cases, the developer may suffer a liquidity problem halfway through construction and will seek funds so they may complete the project. If there is no significant debt and the developer has self-funded the build, a bank may well offer debt financing and as security take a lien over the land and buildings. Other finance on offer will be straight equity investment or a debt/equity split from the companies mentioned above. 

Commercial Real Estate 

As opposed to residential real estate, which is used solely for domestic home inhabitancy, commercial real estate is property (land or buildings), that will generate a profit either from business activities, capital gain or rental income. Commercial real estate is generally broken down into six categories, 

  • Office Buildings  
  • Apartment Buildings 
  • Restaurants and Retail  
  • Healthcare 
  • Land 
  • Industrial 

Financing Commercial Real Estate Projects 

Commercial real estate is designated as an income-producing property, and as can be seen from the above there is an array of different income-producing properties. As such, the finance will differ from category to category 

Finance for commercial real estate projects is usually made to business entities both small, large or conglomerate. Such entities can be corporations, developers (again both small and large), limited partnerships and on occasion trusts.  

There are many types of business loans for commercial real estate projects such as lines of credit, term loans, equipment financing, construction loans and bridging loans. These of course are generally debt loans, but for more sophisticated investment/loans, these can be debt/equity splits, straight equity financing and sometimes government grants or loans. 

Banks are very big into commercial property finance, but so are the specialist financiers such as commercial real estate development funds, private equity funds, vulture funds, hedge funds, sovereign wealth funds, venture capitalists and private investment companies. The private equity giant Blackstone was at the end of 2020, declared the world’s largest corporate landlord by devoting USD163 billion of equity capital to commercial property on a global basis. 

Financing Industrial Real Estate Projects 

Industrial real estate project finance is supplied by the exact same lenders/investors as set out in commercial real estate. Many of the bigger projects such as refineries, steelworks etc, will take a longer period to start turning a profit. The companies being financed for such projects are usually conglomerates, so a debt only package is usually utilised with a bi-annual interest rate, with the land and construction being secured by the lender.  

Brownfield Site 

These are large industrial sites that are scheduled for demolition. Such sites such as refineries will be demolished, and the land and subsoil cleaned of any pathogens. The land is usually designated for sustainable commercial and residential development. This is particularly attractive to developers as they can build homes, supermarkets etc on the land.  

Therefore, diverse funding will be needed across the board. There will be a mixture of debt, debt/equity, straight equity finance for the different builds that will take place upon the land. In some cases, specialist Brownfield Funds will finance much of the project, leaving the remaining funding to banks and other lenders/investors. 

IntaCapital Swiss and Real Estate Funding 

We can give access to credit facilities to those companies being denied by banks and other traditional financial institutions, as well as the non-traditional financiers and more exotic lenders and investors. 

Located in the heart of the financial district in Geneva, Switzerland, we can offer our clients highly motivated and exceptionally skilled financial managers and consultants. We offer an array of financial products and solutions, from mergers and acquisitions, private bond issues, securitisation and IPO’s to mention but a few. 

However, the jewel in the crown is our Collateral Transfer Facility, a financial product that has gained in popularity over the last decade in Europe, the Middle and the Far East, Asia and South East Asia, the Pacific Basin and parts of the African Continent. 

Collateral Transfer 

Collateral Transfer is the process whereby one company, referred to as a Provider, will transfer an asset or collateral, usually a Demand Bank Guarantee, to another company, known as the beneficiary 

Essentially IntaCapital Swiss will match Providers with those companies, (Beneficiaries) who need credit facilities. The provider and beneficiary will sign a contract, a Collateral Transfer Agreement, whereby the provider agrees to transfer a Demand Bank Guarantee to the beneficiary for one year, (or longer) for a fee. This fee is known as a Collateral Transfer Fee. 

Real Estate Projects – providing applicants, (beneficiaries), can prove they own the land on which the build is to take place, plus have a successful history in completing real estate projects, IntaCapital Swiss, subject to successful due diligence will be able to provide access to credit facilities in the amounts of Euros/GBP 10,000,000 – 150,000,000. 

Demand Bank Guarantees 

Whilst there are many bank guarantees in circulation, the one guarantee that can be monetised is the Demand Bank Guarantee. Demand Bank Guarantees come under the purview of the International Chamber of Commerce, ICC who set the standards and rules for international trade which includes Demand Bank Guarantees.  

Whilst, not law, all the 45 million members in over 100 countries adhere to these rules and regulations including most banks. The particular rule that is applicable to Demand Bank Guarantee guarantees is the ICC Uniform Rules for Demand Guarantees, (URDG), 758.  

URDG 758 states that all Demand Bank Guarantees verbiage will dictate their end-use. In the case of monetising, a Demand Bank Guarantee the verbiage will be so precise that any lender will immediately know they are 100% secure. Under this rule, Demand Bank Guarantees are payable on first demand. 

Monetising a Demand Bank Guarantee  

Once the Collateral Transfer Fee has been paid and the beneficiary has received the Demand Bank Guarantee on their account, they have a financial instrument that can be monetised. The beneficiary can now present a credit facility application to their bankers offering the Demand Bank Guarantee as security.  

Conclusion 

Any companies that have real estate development projects, be it industrial, commercial or residential, and are unable to get funding, are able to benefit from IntaCapital Swiss financial services – subject to due diligence. IntaCapital Swiss have been providing access to finance for over a decade and are one of Europe’s leading specialists in this area. 

Sports Stadium Sports Stadium

Project Funding for the Sports Industry

Written by Jenny Bowler on . Posted in Industry, News & Reports, Sports.

How does the sports industry obtain finance? This is a complex question as there are multiple avenues to explore. Due to the high number of sport types, funding will differ across the industry.  

Typically, in the UK, premier league football acquires revenue from team owners, sponsorship, entertainment and media contracts, merchandise, ticket sales and football funds. This is similar within the rugby field too, however often on a smaller scale. Cricket differs from the above as funds are generated from mostly match ticket sales and membership fees.  

When it comes to international sporting events, these often include other forms of funding. The UK Olympics for example is funded by a government department, UK Sports – focusing on providing Olympians with a salary. The International Olympic Committee also funds a large part of the budget – USD 1.5 billion went towards the 2016 Rio de Janeiro Olympic Games. Other events such as the FIFA World Cup is both government and private sector funder. Often, the largest beneficiary of the funding/investments is transport infrastructure and construction of sporting facilities.  

Alternative Sports Funding 

Here, at IntaCapital Swiss, we can offer those within the sports industry access to business capital by the means of Collateral Transfer. Those looking to build, expand or upgrade their sports clubs or facilities across any of the sectors can benefit from our financial services.  

What is Collateral Transfer and how can it raise capital for your business? This financial facility is not new, and in fact, is becoming increasingly more popular. As the name implies Collateral Transfer is the transfer of an asset, in this instance a Demand Bank Guarantee, from one company to another. We have a network of companies that supply Demand Bank Guarantees for Collateral Transfer – recognised as Sovereign Wealth Funds, Hedge Funds, Private Equity Funds. These are referred to as Providers. The Provider transfers a Demand Bank Guarantee to the account of the beneficiary (company seeking capital) in return of a Collateral Transfer Fee. 

Once the beneficiary has received the Demand Bank Guarantee on their account, they can with confidence approach their bank and present their application for a loan or line of credit, often referred to as Credit Guarantee Facilities. In most cases, the bank will happily approve this application, as they are being offered first-class security in the shape of a Demand Bank Guarantee. 

From time to time a bank will reject a credit application despite the offer of a Demand Bank Guarantee as security. In this instance, IntaCapital Swiss will be able to provide alternative lenders or third-party lenders who will replace the bank and lend against a Demand Bank Guarantee. 

To conclude 

The sports industry is complex when it comes to funding. However, there are alternatives available, which IntaCapital Swiss can facilitate. Over the years, we have facilitated project funding for new sporting facilities, club buyouts, golf courses and several other ventures. Collateral Transfer has become increasingly popular worldwide as it enables companies to obtain credit facilities when other financial institutions have rejected their applications.  

At IntaCapital Swiss, we are Europe’s leaders in facilitating Collateral Transfer, so if your business requires project funding get in touch today. Our team of financiers and client relationship managers will offer advice, and should your business plan pass due diligence, a designated CRM will see your application through to fruition. 

Precious Stones Precious Stones

Financing within the Precious Stone Industry

Written by Jenny Bowler on . Posted in Industry, News & Reports, Precious Stones.

Here we examine the financing of precious stones or gemstones from mining to markets. However, before we start, what is the difference between precious stones and semi-precious stones? The distinction between precious and semi-precious goes back to ancient Greece and today precious stones are recognised as diamonds, sapphires, rubies and emeralds. All other gemstones are recognised as semi-precious.  

Financing Precious Stones  

Many of the larger mining companies can self-finance their mining operations, such as De Beers and Rio Tinto. Operations are financed from their own balance sheets or from banks and other traditional financiers.  

In the diamond industry banks have been providing more than USD12 billion to the diamond midstream. This post-mining finance is made available from rough diamonds through to cutting, polishing and onto jewellery wholesaling. Thus, the whole supply chain is financed from mining to the shop window. Similar finance can be found in other mineral markets. 

But what about the start-ups and the smaller miners known as junior miners? Most banks and traditional financiers risk models and compliance will negate any lending to these companies, who must search for alternative finance. 

However, there are specialist funds that now look at investing in these miners, as well as several hedge funds or private-equity funds. These alternative lenders are likely to engage with the mining company if they are in possession of approved documentation showing that valuable deposits of precious stones are held within their concessions. 

  • Junior Miners – These companies may already have a mine ready to go with proof that precious stones are in abundance within their concession. There are a few options available. The most common is a joint venture, usually with a reputable miner where there will be a division of profits. 
  • Mid Cap Miners – Some of these companies may already be mining precious stones and need capital to expand their operations. Again, there are a few options available through alternative finance options. 
  • Streaming and NSR’s (net smelter returns) – Funding can be made available through the sale of part or all the future mine production. Future production is sold at a discounted rate in exchange for a percentage of future profits and in return, the miner will receive an up-front payment.  
  • Net Profits Interest (NPI) – This is where miners can receive an up-front payment by selling a fixed percentage of mining profits. The particular form of finance is usually available after capital costs have been paid.  

So, what happens if no finance is made available to the smaller miner? Do they pack up and go home? Many miners in the past have done exactly that. However, this is where IntaCapital Swiss can help. We have enabled access to finance for many companies on a worldwide scale – who have been denied access to investment, loans, and lines of credit.  

IntaCapital Swiss   

IntaCapital Swiss have been providing access to investment and credit facilities for over a decade. Based in the financial district of Geneva Switzerland, we are Europe’s leading exponents of Collateral Transfer. Many companies who have been unable to secure finance for their business plans have, through the expertise of IntaCapital Swiss, been able to secure capital investment and credit facilities. 

Collateral Transfer 

Many companies may not have heard of Collateral Transfer, probably because it is incorrectly referred to as Leased Bank Guarantees. However, as the name suggests this is the transfer of assets from one company to another. IntaCapital Swiss offer their highly popular Collateral Transfer Facility which utilises Demand Bank Guarantees, which enable the recipients of this asset to obtain financing. 

IntaCapital Swiss have a database of companies, referred to as Providers, who offer Demand Bank Guarantees to the Collateral Transfer market. Companies looking to raise capital finance will sign a contract with the Provider, a Collateral Transfer Agreement, to receive a Demand Bank Guarantee. These companies are referred to as the Beneficiary and they will pay a fee to the Provider, referred to as a Collateral Transfer Fee for the use of the Demand Bank Guarantee 

Monetising Demand Bank Guarantees 

Once the beneficiary has signed the Collateral Transfer Agreement and paid the Collateral Transfer Fee the Provider will instruct their bank to transfer the Demand Bank Guarantee to the account of the Beneficiary.  

The Beneficiary now has first-class security sitting on their account. The Beneficiary can now apply to their bank for a loan or a line of credit offering the Demand Bank Guarantee as security or collateral. In this case, the bank will be happy to lend against this asset as they know they are 100% covered should the Beneficiary/borrower default on their fiduciary duties. 

Why Demand Bank Guarantees? 

Demand Bank Guarantees are one of the few financial instruments that can be monetised. This is because the verbiage contained within a Demand Bank Guarantee controls the end-use of the instrument. For example, a Customs Guarantee is a Demand Bank Guarantee and  

Customs will know they will be paid should a customer default on paying the revenue owed.  

Similarly, a Demand Bank Guarantee that will be monetised is written in such a way that any lender will understand that they are totally covered should the borrower default on repayment. It is important to note that Demand Bank Guarantees are governed by ICC Uniform Rules for Demand Guarantees, (URDG), 758 and are payable on first demand. The ICC stands for International Chamber of Commerce and all banks abide and adhere to their rules and regulations which include Demand Bank Guarantees.  

Conclusion 

Any precious stone mining company that has an operational mine and are struggling to obtain finance should look no further than IntaCapital Swiss. They are assisting companies all over the world to obtain finance where finance has been denied by the more traditional financiers and the alternative finance options.  

In the world of mining precious stones, finance and investment in this market have been declining over the last decade. Therefore, those precious stone miners outside of the recognised Big Miners – who have little difficulty in securing finance, who struggle to obtain the necessary finance for their business plans, should look no further than IntaCapital Swiss. 

How do I get a Line of Credit?

Written by Jenny Bowler on . Posted in Collateral Transfer, News & Reports, Raising Lines of Credit.

For those of you unsure of what exactly a Line of Credit represents, here is a brief description… 

A line of credit is a predetermined amount borrowed from a bank. The loan may be used for a variety of pre-agreed purposes. Unlike a standard loan a line of credit is revolving. In other words, the borrower can keep borrowing up to the credit limit even if they have made repayments.

Applying for a Line of Credit

When a line of credit is applied for, the lender will be requested to fill out copious amounts of forms. The essential details will be how much, the expiry date and the reason(s) for the line of credit. All the documents will be accompanied by an extensive business plan, which must contain a strong exit strategy. This is very important regarding the lender’s due diligence. A strong exit strategy will show the bank that their line of credit can be repaid on the due date.

In most cases a bank will offer a secure line of credit. This means the company will be asked to provide collateral or security to the lender. Once the collateral has been agreed and approved, the client will be made a formal offer.

Due Diligence

Due diligence forms a major part in obtaining a line of credit. The company’s accounts will be gone over with a fine-tooth comb. Updated World checks and Dunn and Bradstreet checks will be carried out on all directors.

Cash flow projections will form a significant part of due diligence. The company must show sufficient cash flow that will allow the Exit Strategy to come into play.

Despite all the above, banks continue to decline loan or credit applications. Banks have been cutting their loan books or they have been kept static for many years. You may find this article somewhat annoying to say the least. 

If a company has their loan application rejected what do they do?

Alternative Funding for a Line of Credit

Here in Geneva, many companies have turned to Collateral Transfer to obtain lines of credit. Not just Swiss companies, but companies from Europe, India and Pakistan, The Middle East, the Far East and S/E Asia.

IntaCapital Swiss are Europe’s leading exponents of Collateral Transfer and are based in Geneva. They have been successfully providing access to lines of credit for over a decade. Their clients are companies that have had their loan applications rejected by their banks and other traditional lenders.

What is Collateral Transfer?

Collateral Transfer is the means by which one company “leases” a financial instrument to another company. The most popular instrument is a Demand Bank Guarantee as this is the only guarantee that can be monetised. Once monetised by a lender the beneficiary of the Demand Bank Guarantee can obtain a line of credit.

If a company wishes to obtain a line of credit utilising Collateral Transfer, they must sign a contract with a Bank Guarantee Provider. The contract is referred to as the Collateral Transfer Agreement. The process is quite simple but IntaCapital Swiss will carry out the same due diligence procedures as banks and other financial institutions.

There has been a significant increase in the number of companies applying for Collateral Transfer, especially during the Pandemic. Collateral Transfer has been around for years but it has now become a significant medium for accessing a line of credit.

Companies suffering cash flow problems and rejection by their banks and other lenders should contact us today, to discover the opportunities that Collateral Transfer can bring to corporates around the world.

Gold & Bitcoin Gold & Bitcoin

Will Bitcoin Become the New Gold?

Written by Jenny Bowler on . Posted in News & Reports.

With Bitcoin being one of the most talked about cryptocurrencies, will this decentralized digital currency overtake Gold? We briefly explain the history of gold coins, the future of Bitcoin and how IntaCapital Swiss facilitates Gold Projects.

The Gold Standard 

The first gold coins were initially struck around 550 BC by Royal Decree of King Croesus of Lydia. However as life moved on, paper currency was introduced to the world and by the late 19th century many of these currencies were fixed to gold, known as “The Gold Standard”. 

The definition of the Gold Standard is where countries linked their currency to a specified amount of gold, and countries with no gold reserves linked their currency to a country whose currency was on the Gold Standard. This meant that fiat currencies were freely transferable into gold. 

For countries using the Gold Standard, their money supply was linked to gold, and a legal minimum amount of gold to currency issued was employed. There are many factors under which the Gold Standard operated, but for the purposes of this blog this is just an outline. 

Gold Today 

Great Britain left the Gold Standard in 1931 and the United States followed but not until August 1971. Today gold is used in many products with jewellery accounting for about 74% of gold consumption. 

On the investment side, gold is used as a hedge against inflation, financial market turbulence and geopolitical problems. In today’s world, the Covid-19 pandemic has seen central banks increase the money supply giving the perception that fiat currencies such as the Euro, USD and GBP were being devalued. As a result, investors have fled into gold to protect themselves from currency devaluations whilst preserving their purchasing power. 

Why is gold so attractive to investors? There are a number of reasons but the fundamental reason is, it’s perceived as a commodity of stored value. For hundreds of years and up to today, investors have always seen gold as easily exchangeable, attractive in appearance, durable and importantly scarce. It is these inherent qualities that give gold its attraction and value today. 

Bitcoin 

Bitcoin is a digital currency and was created on 3rd January 2009 when Satoshi Nakumoto, the inventor of Bitcoin, mined the first block in the blockchain, known as the Genesis Block. The first Bitcoin transaction took place in 2010, when two Papa John pizzas were bought for 10,000 bitcoins by a certain Mr Laszlo Hanyecz. 

At the time of Mr Laszlo’s purchase a bitcoin was worth a fraction of a cent, but it crossed the USD 1 threshold in February 2011. Bitcoin is still maturing as a cryptocurrency/asset and over the past decade has suffered massive volatility where double digit swings in price has not been uncommon. 

Volatility 

Bitcoin is famous for massive price swings, the first of which occurred in April 2011 when the price jumped from USD1 peaking in June at USD32, a staggering gain of 3,200%. However, by November of that year, bitcoin had bottomed out at USD2. 

Bitcoin began 2013 trading at USD13.40 and reached USD220 by the beginning of April, before receding to USD 70 by the middle of the same month. However, by October bitcoin was trading at USD123.20 reaching a high of USD1,156.10 in December before virtually halving in price 3 days later to USD760. 

Bitcoins price has continued to fluctuate massively over the years, having to contend with problems in their ecosystem, fraudsters, scams, hacking and absence of any regulation. However, thanks to some serious investment, these problems have become a thing of the past. 

Today 

There is only a finite supply of bitcoin. The total amount of coins that can be mined is 21 million of which 18.5 million have been mined and estimates suggest of these 20% have been lost forever reducing overall supply. 

At the time of writing Bitcoin stands at USD62,151.20, the highest it has been since April of this year, despite losing 17% on 7th September and despite being banned from China.  

America’s regulators have approved a Bitcoin ETF (Exchange Traded Fund), despite bitcoin not being regulated. An ETF mimics the price of an asset allowing investors to buy that asset but eliminating any personal trading. In the case of Bitcoin, the ETF would also erase any complex security and storage procedures. 

This new ETF, which starts trading on the New York Stock Exchange on Tuesday 19thOctober, is expected to attract a serious number of new investors into the Bitcoin market. Analysts are predicting a price of anywhere from today’s price of USD62,151.20 up to USD90,000 in November and then amazingly after a correction up to USD150,000 to USD200,00 early next year. 

Bitcoin & Gold – Conclusion 

The question many investors are mulling over is “Will Bitcoin become the new gold?”. For many, Bitcoin is still a young digital currency and needs to grow and mature before any comparisons can me made. Pro bitcoin analysts are already saying bitcoin is now a hedge against inflation. However, the Bank of England and HSBC both say bitcoin has a long way to go. 

Gold is still way ahead in the custodial and security stakes. Despite much publicising that the cryptocurrency world is so much safer, there have been massive hacks already this year, so perhaps a cryptocurrency is not as safe security wise as we are led to believe. 

Official statistics show that 2 ½ to 3 thousand tons of gold are mined each year with an estimate of 190,000 tons being above ground. There 18 ½ million bitcoins that have currently been mined, with a maximum availability of 21 million. So what happens when Bitcoin issue no more coins?? 

Gold is priced in different currencies in individual markets all over the world. This means that gold can be hedged against currencies, whilst bitcoin is priced just in the US Dollar and therefore comes nowhere near the flexibility of gold. 

As a hedge against the future, gold is so much less volatile than bitcoin which taken together with all the above points shows that bitcoin has yet to become the new gold.

IntaCapital Swiss & Gold

At IntaCapital Swiss we have facilitated projects within the mining industy, specifically gold. Learn more from our case study, which benefited from a Collateral Injection that would Guarantee the clients’ suppliers for the payment of Gold export from Brazil to Canada.

Business Lease Business Lease

What does it mean to ‘Lease’ a Bank Guarantee

Written by Jenny Bowler on . Posted in Bank Guarantee, News & Reports.

Below is an explanation for “leasing” Bank Guarantees. However, for those not in the know the term “Leased” Bank Guarantee is factually incorrect. The technical term is actually Collateral Transfer. 

Financial experts have suggested that the term “leased” was plagiarised from a Commercial “Leasing” Contract. This is perhaps due to a “Leased” Bank Guarantee contract and a Commercial “Leasing” Contract being very similar.

The term “Leased” Bank Guarantee will not be found in any financial almanac or lexicon. “Leased” Bank Guarantee has been used for many years in financial conversations and correspondence. It has become an indelible part financial reference and is here to stay.

What is a ‘Leased Bank Guarantee? 

A “Leased” Bank Guarantees are utilised solely for raising loans and lines of credit. As such the only type of Guarantee that can be used is a Demand Guarantee (or Bank Guarantee) or indeed a Bankers Letter of Guarantee. The Demand Guarantee’s format contains very exact and specific verbiage. It is governed by ICC Uniform Rules for Demand Guarantees, (URDG). It is payable on first demand.

Utilising a Demand Guarantees in this way means banks are happy to accept this instrument as collateral for loans or lines of credit. In other words, a “Leased” Bank Guarantee is successfully used for monetisation purposes providing the issuing bank is of suitable standing.

The market leader in providing access to loans and lines of credit via “Leased” Bank Guarantees is right here in Zurich, Switzerland. Further details will be outlined below.

How does a company obtain a ‘Leased’ Bank Guarantee?

A company looking to raise credit facilities must enter into contract with a Bank Guarantee Provider. This contract is known as a Collateral Transfer Agreement. There are Bank Guarantee Providers in India, the Middle East, The Far East, South East Asia and Europe. These companies are usually recognised as Sovereign Wealth Funds, Hedge Funds, Private Equity Funds and larger Family Offices.

The company “leasing” the Bank Guarantee will sign the Collateral Transfer Agreement with the Bank Guarantee Provider. They will now be referred to as the beneficiary. Bank Guarantees are usually “leased” for one year. 

The beneficiary will pay a fee to the Bank Guarantee Provider for “leasing” the Bank Guarantee. This is referred to as a Collateral Transfer Fee. Ownership of the Bank Guarantee will revert to the Bank Guarantee Provider upon expiry of the Collateral Transfer Agreement.

Monetising a “Leased” Bank Guarantee

The Bank Guarantee Provider will instruct their bank to transmit the Demand Bank Guarantee by Swift to the beneficiary’s bank. Once received on their account the beneficiary can now apply for a loan or line of credit. 

These facilities are often known as Credit Guarantee Facilities. The beneficiary will offer the Demand Bank Guarantee as collateral in return for a Loan Against the Bank Guarantee. 

These transactions have been successfully completed over many years. To enter into a Collateral Transfer Agreement please see below.

Important

Are you a company that is continually refused access to credit facilities? Then please contact IntaCapital Swiss SA Geneva. They are the recognised market leaders in collateral finance.

For over a decade IntaCapital Swiss have been providing access to credit facilities to companies starved of working capital. Their highly popular financial model the Collateral Transfer Facility utilises “Leased” Bank Guarantees. 

IntaCapital Swiss have an envious data-base of Bank Guarantee Providers. Utilising the Collateral Transfer Facility, they match Bank Guarantee Providers with companies requiring “Leased” Bank Guarantees. Subject to due diligence, both parties will go on to sign a Collateral Transfer Agreement. To get in touch, please fill out our online enquiry form.

Global Introduction of Central Bank Digital Currency Global Introduction of Central Bank Digital Currency

The Global Introduction of Central Bank Digital Currency (CBDC)

Written by Jenny Bowler on . Posted in News & Reports.

81 countries are exploring the possibilities of introducing Central Bank Digital Currency into their economies. These 81 countries represent over 90% of global GDP, so now is the time to start thinking about the possible effects this may have on the future of the global financial sectors. 

Currently, five countries have launched a digital currency – the first of which was the Bahamas with the Sand Dollar. The other four are Grenada, St Lucia, St Christopher and Nevis and Antigua and Barbuda. Below, we concentrate on some of the more advanced economies and their plans for a Central Bank Digital Currency. 

China 

China is without a doubt the furthest down the road of any G20 country regarding the introduction of CBDC. They introduced their CBDC special task force in 2014 and will soon be adopting E-Yuan which will be backed by the Chinese Central Bank. The Chinese government has confirmed E-Yuan will be used for shopping. Visa have announced that they have expressed interest in helping E-Yuan move into mainstream markets. 

Interestingly, China did house in excess of 50% of the world’s digital miners. These miners are now moving to Texas, USA, as China took their power away and Texas is offering them cheap power supplies.  

Russia 

On June 29th 2021 the Bank of Russia launched their CBDC pilot scheme together with twelve Russian commercial banks. The largest of these banks is Sberbank, together with Alfa Bank, VTB and Gazprombank. The Bank of Russia wishes to ensure their commercial banks are able to convert their systems so there is an easy transition from paper and coin currency to digital currency. A prototype for the digital rouble is planned for the first quarter of 2022, following which the Bank of Russia will issue a roadmap for future incorporation. 

Part Survey of the G7 

United Kingdom 

Although a discussion paper was issued in March 2020, The Bank of England have announced that they have yet to make a decision on whether or not to introduce CBDC. If CBDC were to be introduced just like fiat currency it would be denominated in Sterling.  

A taskforce has been created on instructions from HM Treasury and the Bank of England. They have also created the CBDC Technology Forum and the CBDC Engagement Form. Both forums will gather and collate strategic input from their stakeholders. We await further updates, but it would appear that the United Kingdom is lagging behind in the CBDC arena. 

France 

The Banque de France has been concentrating their CBDC tests on the wholesale market rather than the consumer market. Recently the bank utilising a wholesale CBDC, completed a simulated securities settlement. The upshot was a more transparent and efficient capital markets system. Furthermore, the Banque de France has completed, in conjunction with the Monetary Agency of Singapore, wholesale settlement and cross-border payment trials utilising CBDC. Similar successful trials have been completed with the Swiss National Bank. 

Canada  

Whilst there have been no CBDC trials or experiments, the Bank of Canada has echoed the need for a Canadian digital currency. Like other countries they feel that a decline in utilising cash is an emphatic reason for going digital. The other reason is monetary sovereignty that again may well be challenged by alternative or non-domestic digital currencies. Facebook’s Diem, (previously Libra) was again singled out as potential competition. They also singled out the high cost to merchants that take debit and credit cards. CBDC would alleviate this problem. 

Japan  

IN early July 2021 a Japanese lawmaker announced that in 2022 there will be improved clarity on what form the digital yen will take. The lawmaker, Heidi Murai is responsible for overseeing the digital currency plan proposed by the ruling Liberal Democrat Party. Japan has yet to make any decision on the issue of CBDC. 

United States of America 

The USA is clearly the most advanced and digital ready country. It is therefore interesting that the chairman of the Federal Reserve Christopher J Waller opined that he was sceptical when it came to CBDC. He further advised that he did not believe that the US economy would become cashless. Furthermore, in a recent debate in congress a number of senators voiced their concerns regarding CBDC. 

European Central Bank 

The European Central Bank (ECB) has advised of the threat to those countries that choose not to incorporate Central Bank Digital Currencies. They fear that cross-border payments and domestic payments could become dominated by non-domestic providers. 

An example of such dominance is Facebook’s Diem (previously Libra), which has the potential to issue artificial currencies. Such dominance is a potential threat to financial stability leaving both businesses and consumers vulnerable. 

By launching CBDC domestic payments, it would retain their autonomy as would the usage of the currency in a new international digital world. The ECB in partnership with the European Commission have been discussing launching the digital Euro since January 2021.  

Central Bank Digital Currency – Conclusion  

The reticence of the United States towards CBDC is interesting considering that 81 of the world’s countries are actively considering launching a digital currency. However, those who wield the power in the USA no doubt still feel that as the largest economy in the world, the US Dollar will always be the currency of last resort. Also, congress’s attempt to bring cryptocurrencies within the realm of the IRS, could well devastate the crypto market in the USA. 

It seems inevitable that in some G7, G20 and lesser developed countries, change is inevitable and Central Bank Digital Currencies will start to appear. In many countries, cash is becoming a scarce commodity and coupled with the fear of non-domestic digital currencies, posing a threat to sovereign autonomy, the case for Central Bank Digital Currency has pretty much been decided. 
 
 
 

Regulating Stablecoins Regulating Stablecoins

Regulating Stablecoins

Written by Jenny Bowler on . Posted in News & Reports.

Stablecoins are a class of cryptocurrencies that offer financial stability being underwritten by a Fiat Currency such as the USD Dollar. Currently the global market for stablecoins is valued at USD 130 billion. The top stablecoin is Tether with a market capitalization of USD68 billion. 

Stablecoins have gained in popularity by offering not only the instant payment processing with security and privacy as offered by cryptocurrencies but also enjoy the financial stability by being pegged to Fiat currencies such as the US Dollar. 

A Fiat currency is backed by the government that issued the currency and means that these currencies are not backed by physical assets such as gold or silver. 

International Regulators for Stablecoins

Financial regulators across the global financial centres are getting increasingly worried that stablecoins (a digital asset), are beginning to exert a growing and unwanted non-regulated influence on the financial system. Earlier this week it was reported that authorities said stablecoins should be regulated in the same way that clearing houses and payment systems are regulated. They feel this is extremely important as stablecoins act as a bridge between cryptocurrencies and national currencies. 

IOSC, The International Organisation of Securities Commissions 

The IOSC is an umbrella group for regulators across the world and together with the Committee on Payments and Market Infrastructures (the CPMI, part of the Bank for International Settlements), have recommended steps to be taken to oversee the stablecoin market. 

There are several worries that concern these oversight committees. The first is that stablecoins should have no liquidity risks and little or no credit risks. They feel if stablecoins broke their one for one with fiat currencies, customers would become exposed. 

Another worry is stablecoin operators underpin their coins with different baskets of asset class. For example, Tether advises it holds in excess of USD30 billion in commercial paper, making it the seventh, YES seventh largest owner/holder of commercial paper in the world. One senior rating agency suggests that if there was a flight from cryptocurrencies to cash, it could well destabilise short-term credit markets. 

The Problems Posed by Tether 

Tether is a classic example as to why stablecoins should be regulated. Mystery upon mystery surrounds the organisation as critics scream “where is the proof of your holdings”. Tether takes in US Dollars and issues the same in stablecoins. However, there are no annual audited accounts or reports to regulators to show they have the assets or cash to back their stablecoins. The owners of the coins can invest in Bitcoin, Ether or any other cryptocurrency, and can redeem tether coins for cash at any given moment. Tether has now issued to date, 69 billion tether coins, and strangely of that 69 billion, 48 billion has been issued in 2021.  

This means according to Tether’s proclamations they hold the equivalent in cash or commercial paper. Tether has announced of the USD69 billion in cash and assets, USD30 billion is held in commercial paper. To look at this another way, if Tether was a bank, it would be in the top fifty US Banks. 

Interestingly, in the United States the commercial paper market is relatively small and therefore most of the players know each other or know of each other. Various traders from Wall Street were asked if Tether had been buying big in the market. To a person no one had seen Tether active in the commercial paper market. 

If as many regulators fear that Tether is in fact a Ponzi Scheme, it would eclipse Bernie Madoff with disastrous results. If there was suddenly a run-on Tether with customers scrambling to get their money out it could set off a nightmare chain of events.  

First Tether would have to sell or liquidate their assets at a loss, which could spill over into the regulated credit markets and cause a crash. It could well spill over into other cryptocurrencies causing a run on those companies.  

Tether is often used as a hedge, so if it lost its peg to the US Dollar it could take apart Bitcoin and Ethereum. Tether transactions in Bitcoin are greater than US Dollar transactions in Bitcoin. A run-on Tether could in fact cause the whole crypto market to fall into disarray with devastating effects. Many experts feel that Tether is part or is at the centre of Systemic Risk which means it has the ability to possibly severely damage or collapse an entire economy.  

Stablecoins – Conclusion 

The big question is do stablecoins such as Tether have the required assets to back their coinage in circulation? Currently there is no positive proof. Maybe a company such as Tether, likened to be in the top fifty largest United States banks be subject to Tier I and Tier ii Bank for International Settlement rules and regulations.  

These questions can go on and on, but it is time to stop pontificating. It has become incumbent upon regulators and government lawmakers to force these stablecoin companies to prove their assets. This is absolutely tantamount if a potential financial disaster is to be avoided. 

Invest in Bitcoin wihtout Buying Bitcoin Invest in Bitcoin wihtout Buying Bitcoin

Invest in Bitcoin without Buying Bitcoin

Written by Jenny Bowler on . Posted in News & Reports.

There are many individuals and investors across the globe who are understandably still not ready to invest in cryptocurrencies, such as Bitcoin, but would like to get some exposure to this market.  

There are several reasons as to why investors wish to avoid owning Bitcoin. These can range from not understanding the market, to understanding the market but wary of the volatility swings or being an owner of Bitcoin but looking for a more diverse crypto investment basket. 

Despite the volatility, Bitcoin has doubled in price in 2021, so how does one gain exposure without buying Bitcoin? 

Alternative Bitcoin Investment Options 

There are a few options that are available for those wanting exposure to Bitcoin without going through the rigmarole of opening a cryptocurrency account and becoming an owner of Bitcoin. 

Exchange Traded Funds (ETF’s) 

For those not aware, an Exchange Traded Fund is a type of security that tracks tradeable assets such as commodities, shares (FTSE 100), bonds or a mixture/basket of investment types. The ETF can be bought and sold on various exchanges, and the investor does not have to purchase individual commodities or shares etc.  

In the case of a Bitcoin ETF, this fund will track the price of Bitcoin, and allows investors to bet on the future of Bitcoin, without having to purchase Bitcoin themselves. These funds have been available in Europe and Canada for some time, but since October 2021 are now available In the United States.  

Briefly, US Bitcoin ETfs invest in Bitcoin futures, and they indirectly track the spot price of Bitcoin via contracts that are traded and overseen on the Chicago Mercantile Exchange. The regulators suggest that this is a safer way to invest in Bitcoin, (more investor protection), rather than through regular Bitcoin ETFs. 

These funds are not available in the United Kingdom as regulators (the FCA), refuse to authorise a crypto fund until they are satisfied the underlying market has the proper integrity.  

Purchase Shares in a Companies that are Bitcoin Related 

Many investors are used to investing in companies that have a board of directors that are accountable to shareholders, the regulatory authorities and produce annual financial results. Therefore, investors may find it easier to invest in Bitcoin related companies. 

An example is Coinbase Global Inc (known as Coinbase), which is a Nasdaq traded company that operates a crypto exchange, which is currently the largest US crypto exchange by volume traded. As filed with the SEC, (the US Securities and Exchange Commission), their main income is derived from the users of the exchange who deposit and trade funds. The valuation of the exchange will fluctuate in accordance with the price of Bitcoin.  

Investors may choose to invest in those companies that have an exceptionally large exposure to Bitcoin. An example will be Tesla Inc, who currently hold roughly USD1.26 billion in crypto assets on their balance sheet. There are other companies who also hold sizable assets in Bitcoin, but investors will have to due diligence the sectors they are trading in, to ensure a worthwhile investment. 

Crypto Technology Investments 

How is Bitcoin Created? A Bitcoin is known as a digital currency and each coin or unit is encrypted then stored on a digital public ledger known as a blockchain. The creation and storage of these coins is known as mining. Originally, individuals used advanced computing systems to solve extraordinarily complex mathematical equations to verify Bitcoin transactions. Their payment or reward being Bitcoins.  

This has morphed into companies who now used highly advanced computer systems to “mine” Bitcoins from scratch. Some of these companies have seen their share price go through the roof. The USA’s largest crypto miner was bought in April 2021 for USD 650 million cash and stock trade. 

Conclusion 

As shown above, there are many ways to invest in Bitcoin without having to purchase this sometimes-volatile digital currency. As with all investments, it is always prudent to diversify risk, so alternative bitcoin investment may well be the way to go for the more risk averse investor. 

Is time finally being called on Decentralised Finance Is time finally being called on Decentralised Finance

Is time finally being called on Decentralised Finance

Written by Jenny Bowler on . Posted in News & Reports.

Regulators throughout the world are finally taking the first steps to bring non-regulated digital currencies and their associated blockchains under regulatory control. The rapid growth in this alternative to the traditional financial system has finally brought global regulators to the conclusion that decentralised finance and defi apps need to come under regulatory control. 

Financial Action Task Force, (FATF) 

Paris, July 1989, the Financial Action Task Force or FATF was created as a joint-action intergovernmental task force at a meeting of the G7 nations. The initial remit was to develop global counter measures to money laundering. The remit was expanded in October 2001 to cover terrorist financing, and further expanded in April 2012 to cover the financing of proliferation of weapons of mass destruction. 

Money Laundering 

Last week FATF announced that they have urged global regulators to apply set rules and regulations to directors, shareholders and other individuals that control, own or exert influence on DeFi apps. These rules and regulations are designed to combat terrorist financing and money laundering and should also be applied to those who own, operate and create all decentralised finance. 

DeFi apps – are trading apps which allows any user to circumvent centralised exchanges, (such as Kraken, Binance and Coinbase), when engaging in crypto investment trading. 

Experts have suggested that Bitcoin has been and can be in the future used as an attractive way for the criminal classes to launder their ill-gotten gains. Due to the lack of regulation, and the security aspects of Bitcoin, makes large transactions in Bitcoin virtually untraceable, especially when converting Bitcoin to cash. Many exchanges and providers of wallets have no anti-money laundering regulations and do not request Customer Information Profiles, or KYC, Know Your Client profiles. 

Funding of terrorism is another problem that crypto industry has to live with. Again, experts suggest that terrorist organisations are currently using cryptocurrencies to deal weapons and drugs etc on the black market. There is a website on the dark web which apparently is associated with the transferring of Bitcoins to Islamic terrorists. 

Implementation of Crypto Policing 

The proposals as offered by FATF over the past few years have been delayed as jurisdictions across the globe have struggled to implement oversight on the decentralised finance. One of the big problems has been dealing with organisations that are run by algorithms instead of the usual board of directors who can be subject to oversight committees and investigations. 

However, one of the first moves will be to look at some of these decentralised projects where brochures suggest that they are a “Virtual Asset Service Provider”, which under today’s anti-money laundering rules makes them answerable to the relevant authority. Any person who is deemed to have authority or a major influence over the project will be subject to anti-money laundering rules and regulations. 

Conclusion 

Crypto trading projects or decentralised finance projects has increased by a figure of 500% in this year alone, reaching a staggering figure of USD100 billion. The term “The Crypto Industry is too Big to Ignore” is finally becoming relevant. 

Fraud in the cryptocurrency world is rife. In fact, it has been reported that over USD 197 million has been lost to fraudulent scams in this year alone. None of these losses are covered by FDIC, (federal Deposit Insurance Agency). Thus, investors or buyers of cryptocurrencies or investors in DeFi projects are not covered as they are investing in an unregulated market. 

FATF can only make recommendations to governments and their regulatory authorities. It is up to the governments concerned to pass the relevant laws that will bring decentralised finance within the purview of their regulators. Otherwise, investors will continue to be scammed, and money laundering and terrorism finance will continue unabated. 

Head office

IntaCapital Swiss SA,
Rue du Rhône 80 - 84,
CH - 1204 Genève,
Switzerland

Other facilities

Enquire

Legal

IntaCapital Switzerland | Copyright © 2025 | All Rights Reserved