Back-to-Back DLC & SBLC Issuance
Back-to-Back DLC & SBLC Issuance
A back-to-back structure lets one bank instrument serve as security for issuing another. It’s common in structured trade finance when a buyer’s bank issues a DLC or SBLC to an intermediary, and the intermediary’s bank uses that instrument as collateral to issue a matching (or adjusted) instrument to the final supplier or beneficiary. We manage the entire chain so both instruments are verifiable, aligned in terms, and acceptable to all counterparties.
Where back-to-back issuance makes sense
- Trader securing goods from a supplier using a buyer’s LC as collateral.
- Project contractor passing through payment security from a project owner to subcontractors.
- Commodity transactions involving multiple tiers of sellers and buyers.
- Cases where the final beneficiary will only accept an instrument from a specific bank or jurisdiction.
What we deliver
- Structure plan: terms, amount, expiry, governing rules, and mirror conditions.
- Issuer selection: matching banks for inbound and outbound instruments.
- Compliance alignment: KYC, AML, and sanction checks on all parties.
- SWIFT management: inbound MT700/MT760 monitoring, outbound issuance, amendments.
- Risk control: no issuance until inbound instrument is authenticated and operative.
- Closing plan: synchronized release dates and expiry management.
Indicative back-to-back term sheet
| Item | Range or term | Notes |
|---|---|---|
| Instrument types | DLC MT700, SBLC MT760 | Inbound and outbound may differ |
| Face value | USD/EUR 1m+ | Adjusted for fees/margins |
| Tenor | 90 days to 12 months | Extensions possible |
| Governing rules | UCP 600, ISP98, URDG 758 | Depends on instrument type |
| Issuance fees | 1.0%–3.0% p.a. | Per instrument |
| Risk controls | Outbound issued only after inbound authenticated | Full SWIFT trace |
Terms depend on credit approval, transaction flow, and beneficiary requirements.
Process
Eligibility at a glance
- Real underlying transaction with documented goods, services, or project scope.
- Applicants and beneficiaries cleared through KYC and AML screening.
- Inbound instrument from an acceptable issuing bank.
- Clear expiry and performance terms aligned between both instruments.
Frequently asked
Is this the same as “monetizing” an LC?
No. This is a direct use of an incoming instrument as collateral for issuing another — not a cash loan.
Can the second instrument be for a different amount?
Yes, but it must leave margin for fees and risk buffers.
How long does it take?
Typically 1–3 weeks from inbound instrument authentication.
Can the inbound and outbound banks be in different countries?
Yes, but correspondent relationships must exist for SWIFT confirmation.
Request a back-to-back issuance plan
Send the draft terms of the inbound instrument and the requirements of the outbound beneficiary. We will confirm feasibility, align issuers, and manage both sides to completion.
Start the ProcessThis page is informational. Any engagement and any back-to-back issuance are subject to independent credit approval, KYC and AML checks, and executed documentation. Terms, fees, and conditions vary by transaction, counterparties, and market conditions.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
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