Beware of Imitations!

Over the last few years, the industry has experienced a major up-turn in the popularity of using ‘leased’ bank guarantees and standby Letters of Credit (and other types of instruments) to secure credit lines, commercial loans and project finance.

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The Benefits of the Collateral Transfer Provider

When a private equity firm or other types of funding institutions make an investment into companies on an international platform, several laws come into play. If an equity company made an investment (or indeed a loan) into a company outside of their own jurisdiction (i.e. they physically lent funds in a different country), they may need Government permissions, licenses and other forms of financial authority registrations in that jurisdiction in order to make such investment or lending commitment.

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Bank Guarantee ‘Lease’ or StandBy Letter of Credit Providers

A Provider is the party who enters the Collateral Transfer Contract (or the Collateral Transfer Agreement, “CTA”) with the Principal or Recipient. A Provider will typically be a private equity firm, a hedge fund or wealth manager or indeed a family office, managing funds on behalf of their clients or investors.

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