Services

Monetization

Raising liquidity against a bank instrument without disposing of the underlying asset.

Zentrix Global arranges the monetization of bank instruments, including Bank Guarantees (BG), Standby Letters of Credit (SBLC), and Irrevocable Documentary Letters of Credit (DLC). This allows a holder to raise cash liquidity against an instrument without selling the underlying asset.

Monetization rests on the legal mechanics of assignment and pledge. The instrument is delivered bank to bank over the SWIFT network, by MT760 for guarantees and standbys, or MT700 for documentary credits, with MT799 pre-advice where required. The holder assigns the proceeds of the instrument, or grants a security interest over it, to the funding party. Against that security, a credit facility or non-recourse advance is made available.

Monetization is governed by the same International Chamber of Commerce rulesets that govern issuance, namely UCP 600, ISP98, and URDG 758, read together with the assignment and pledge provisions of the applicable law and the terms of the facility agreement. Title, control, and the conditions of release are documented in full before any value is advanced.

Instruments monetized

  • Bank Guarantees (BG)
  • Standby Letters of Credit (SBLC)
  • Irrevocable Documentary Letters of Credit (DLC)

Advance rate (LTV)

The amount available against an instrument is not fixed. It is determined by analysis, including the credit standing of the issuing bank, the type, operative wording and tenor of the instrument, its assignability, and the structure of the transaction (recourse or non-recourse). Indicative terms are provided only after review of the instrument and the issuing bank. No advance rate is confirmed before due diligence is complete.

How a transaction is conducted

  1. 01

    Preliminary assessment

    Review of the instrument and the issuing bank, confirmation of the accuracy of the information provided, and a preliminary appraisal of value.

  2. 02

    Consultation and documentation

    Development of the transaction structure, and the preparation and agreement of all required contracts and security agreements.

  3. 03

    Identification and compliance

    Client onboarding, AML and KYC review, and confirmation of the origin of the instrument and the source of funds.

  4. 04

    Delivery of the instrument

    Bank to bank delivery over the SWIFT network (MT760 or MT700, with MT799 pre-advice where required) and execution of the assignment or pledge.

  5. 05

    Verification and financing

    Authentication of the instrument by the receiving bank. Following perfection of the security, the funding party advances the funds on the agreed terms.

Compliance

Every transaction is conducted under rigorous AML and KYC standards, with source of funds verification, and held in strict confidence. Transactions that cannot be fully evidenced and documented are not accepted.

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Remember

Zentrix Global LTD. acts as a structuring arranger and independent adviser. It is not a bank, deposit-taking institution, investment fund or securities broker. Zentrix Global LTD. does not itself issue, confirm or guarantee any financial instrument, including any Standby Letter of Credit (SBLC) or Bank Guarantee (BG); such instruments are issued by regulated partner banks.

Suspected fraud, prior exposure to it, or an unverified transaction? Contact our Transaction Risk Assessment team.

Legal Information

This is a marketing communication from Zentrix Global, which is the main advisory business within the Zentrix Global Group. Advisory services are delivered by various Zentrix Global companies around the world, depending on local laws and regulations. The services described in this document may be provided by different Zentrix Global entities, and members of the Zentrix Global Group may also trade in the products mentioned here.

This document is not independent investment research under the European Markets in Financial Instruments Directive ("MiFID") or other relevant regulations and is not subject to restrictions on dealing ahead of its distribution. This means Zentrix Global and its staff may have an interest in the products or services mentioned before this document is shared with you.

The information in this document is for general information only and is intended for Zentrix Global clients. It does not constitute, and should not be construed as, legal, tax or investment advice, or a solicitation, offer, or recommendation to buy or sell any financial products or services.

Some Zentrix Global Group offices may act only as representatives of Zentrix Global and are not permitted to sell products, provide services, or offer advice to customers. Not all products or services are available in all jurisdictions.

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