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    Technical Questions

Is Collateral Transfer the same as ‘leasing’ a bank guarantee?

Yes. The phrase ‘Collateral Transfer’ is used as it is the correct terminology. Find out more

What is the wording of the Bank Guarantee?

The bank guarantee’s issued under these types of facilities are standard ICC758 (UPC 600) Credit Facilities Guarantee wordings.

Can we have a copy of the Bank Guarantee wording we will receive?

Yes of course. The draft of the Guarantee is enclosed within the Term Sheet provided if the application is successful.

Can we nominate to use our own preferred Bank Guarantee wording?

Yes. Most Providers will issue the Guarantee to the wording required by the Beneficiary.

Is the Bank Guarantee received under the facility cash-backed?

“Cash backed” Bank Guarantees are a misnomer. Any Bank Guarantee, regardless of what security the issuing bank has taken for its issue, is demandable and callable by the beneficiary. It makes no difference whether the underlying asset is cash, gold, stocks or any other type of security.

Once issued, can the Bank Guarantee be cancelled prematurely?

No. The bank guarantee issued will be fixed for the term agreed. Bank guarantees with terms longer than 12 months may be issued on renewable annual terms, depending on the Provider and the status of the applicant.

What are the minimum and maximum amounts I can apply for?

Currently, we have Providers that will issue collateral transfer facilities from a minimum of €10 million to a maximum of €100 million per contract.

What happens if I need more than €100 million?

It is possible to apply for multiple contracts allowing more than €100 million. However, it should be noted that for amounts of €100 million and upward most Providers will only consider for investment and trade programme purposes. Multiple contracts are applied simultaneously and are often structures to be effected sequentially.

What is the minimum and maximum term?

Generally, most Providers will issue these types of facilities from as short as 3 months to as long as 60 months (5 years). Most collateral transfer facilities are granted on a 12-month renewable contract. Contracts may be renewed year on year up to 5 years or longer. Longer terms may be negotiated for larger projects where multiple contracts are issued.

Does the Contract Fee get lower the longer the term?

Yes, naturally. As most contracts are based on a 12-month renewable term, the pricing is relatively stable. However, for shorter terms of 3 to 6 months, it is often more economical to apply for a 12-month contract as the pricing and costs are relatively similar.

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Technical Questions

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