Loan Guarantee Fee Calculator

SBLC Loan Guarantee For Junior Tranche | Calculator and Term Guide

SBLC Loan Guarantee For Junior Tranche

We arrange Standby Letters of Credit that guarantee the junior tranche or equity so senior debt can close. The guarantee is backed by treasury bonds or cash. Loan to value on the guarantee is 100 percent. Upfront fee is USD 32,500 per USD 1,000,000 of guarantee. The SBLC fee is 6%, and we show the total cost for the period that applies. Many clients refinance soon after closing, often within 90 days, which cuts the cost. Loan pricing is set by your bank. For loans secured by treasuries, the spread over Prime is usually on the low end. You can click here to check the current Prime Rate.

How this works

The SBLC is issued under ISP98 and delivered by MT760. It guarantees your junior piece so the senior lender is protected. The guarantee can include a grace period of up to 6 months. The calculator shows the total SBLC cost for the billed period, not an annualized number.

Example. USD 1,000,000 junior tranche guaranteed inside a USD 3,000,000 transaction
  • LTV on guarantee is 100 percent, so the loan amount on the guarantee is USD 1,000,000
  • Upfront fee is USD 32,500 which is USD 32,500 per USD 1,000,000 of guarantee
  • SBLC total cost for 12 billed months at 6% is USD 60,000. With a 3 month grace the billed period is 9 months which is USD 45,000
  • If Prime is 8.50% and your bank prices at Prime plus 0.75%, the loan rate guide is 9.25%. If you refinance in 3 months, simple interest on USD 1,000,000 is about USD 23,125
  • Illustrative first period cash cost with 3 month grace and 3 month refinance timing is USD 32,500 upfront + USD 45,000 SBLC + USD 23,125 interest = USD 100,625

Loan Guarantee Calculator

Results

Item Amount
Loan Amount at 100% LTV $0
Upfront Fee $0
SBLC Billed Period 0 months
Total Cost of the Guarantee $0
Guide Loan Rate 0.00%
Estimated Interest To Refinance Point $0
Total Estimated Cash Cost To Refinance Point $0
Monthly SBLC Equivalent
$0
For context only. Grace months are not billed.
Monthly Interest Guide
$0
Simple, no amortization assumed.
Why this can be cheaper
Grace reduces SBLC billing. Early refinance trims interest. Treasury-backed loans usually price close to Prime.

How Issuance Works

Step What Happens
Underwriting KYC, sanctions, structure review, contract review, and credit file
Collateral and Controls Cash or treasuries, reimbursement agreement, blocked accounts, reporting
Text and Rules ISP98 wording with objective draw conditions tied to the exposure
Issuance MT760 to the beneficiary bank. Confirmation can be added on request

Quick FAQ

Can the SBLC include a grace period?

Yes. Up to 6 months. The billed SBLC period excludes the grace months in this calculator.

Do many clients refinance within 90 days?

Yes. That is common. Early refinance reduces interest and keeps the SBLC cost to the billed window only.

Are the loan terms shown final?

No. Your bank sets them. The guide uses Prime plus a low spread because the loan is secured by treasuries.

What is the minimum guarantee amount?

USD 1,000,000.

Is the SBLC always valid for a full year?

Typical validity is one year. If the facility is refinanced earlier, your cost is only for the billed months.

Request Indicative Terms

Share the guarantee amount, validity, grace preference, and whether treasuries or cash will back it. We will revert with wording, controls, and a closing plan.

Contact Us

Estimates only. Actual pricing depends on underwriting, collateral verification, credit approval, and documentation. We act as arranger and advisor through regulated partners. We are not a bank and we do not hold client funds.

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