Providers of Collateral Transfer

Providers are the life-blood of Leased Bank Guarantees, the technically correct term being, Collateral Transfer, without which, there would be little access to loans and lines of credit, referred to as Credit Guarantee Facilities. Providers have one big similarity, big balance sheets, they are found in all the major financial centres, and are recognisable as Sovereign Wealth Funds, Private Equity Funds, Hedge Funds, and Larger Family Offices.

Providers or Provider Groups, all have access to large portfolios of assets, allowing them provide Bank Guarantees, for Collateral Transfer. There are many companies seeking Providers in order to enter into a contract to lease a Bank Guarantee, known as a Collateral Transfer Agreement.

Two companies, the Provider and another company looking to lease a Bank Guarantee, (known as the Beneficiary), will sign a Collateral Transfer Agreement enabling the Provider to transfer a Bank Guarantee to the Beneficiary for the usual period of one year. The Beneficiary will have to make payment to the Provider for utilising the Bank Guarantee. This payment is known as the Collateral Transfer Fee.

Providers utilise underperforming assets as security to provide Bank Guarantees for Collateral Transfer. These assets tend to be securities such as bonds or Long-Term Notes, (LTN’s), that carry a small coupon, and when collateralised for Bank Guarantees, the Provider will receive an increased return on this particular asset.

IntaCapital Swiss, have been teaming up with Provider Groups for many years, and utilising the Collateral Transfer Facility, which employs Bank Guarantees, are making available loans and credit lines, also referred to as Credit Guarantee Facilities, to companies who have been unable to access such credit facilities.