SBLC Monetization Service

SBLC Monetization Service

SBLC Monetization Service

Convert an eligible SBLC into upfront cash. We arrange assignment and proceeds control, distribute to funding counterparties, and advance against face value. Instruments must be genuine, irrevocable, issued under ISP98, delivered by MT760, and tied to an eligible network of contracts (offtake, supply, EPC, leasing). No double pledge under any circumstances.
Who this serves
  • * Corporates holding issued or confirmed SBLCs and seeking cash
  • * Traders and project sponsors with verifiable contract cash flows
  • * Beneficiaries preferring assignment and control over cash collateral
When it fits
  • * SBLC is operative (MT760), under ISP98, free of liens or prior assignment
  • * Issuer or confirmer is rated; tenor up to 24 months
  • * Network of underlying contracts supports the undertaking
What we deliver
  • * Underwriting, structure, assignment, and account control
  • * Distribution to funders and clean settlement workflow
  • * Proceeds disbursed net of agreed fees and costs

Indicative Advance Rates (LTV)

Profile Issuer / Confirmation Tenor Advance Rate (of Face)
Top-tier confirmed SBLC Top-25 global bank with A/A2 or better confirmation ≤ 12 months 75% – 80%
Strong issuer, unconfirmed Top-50 bank; BBB+/Baa1 or better ≤ 12 months 60% – 70%
Longer tenor / EM risk Rated issuer; no confirmation > 12 to 24 months 50% – 65%
Performance / complex structures Rated issuer; structure-dependent Up to 24 months 40% – 60%

Basel III, CCF, and how monetization works

Banks treat standby letters of credit as off-balance-sheet exposures. Under Basel III, a Credit Conversion Factor (CCF) converts the standby into a credit-equivalent amount before risk weighting. CCF levels differ by purpose and approach: direct credit substitutes typically attract higher CCFs than short-term, self-liquidating trade contingencies, and institutions may apply the standardized approach or internal models. Funders reflect this regulatory capital effect—together with issuer/confirmation ratings and effective tenor—when setting advance rates and discount yields.

Discounting (assignment + proceeds control): the SBLC is assigned to our funding vehicle and acknowledged by the issuing/confirming bank; we establish control over proceeds and advance a single upfront amount against face value, net of discount and fees. Discounting suits one-off liquidity needs tied to a specific standby where the beneficiary is comfortable with assignment and acknowledgment.

Collateralization (borrowing-base support): the SBLC is pledged as collateral to secure a revolving facility. Funding is drawn against eligible receivables, milestones, or collections rather than via a single upfront discount. Collateralization fits repeat draws and dynamic cash cycles where borrowing-base tests, account controls, and sweeps are preferable to outright assignment.

Indicative Term Sheet (Non-Binding)

Instrument Standby Letter of Credit under ISP98, operative by MT760; genuine and irrevocable; assignment or strict proceeds control required.
Purpose Monetization for cash via discounting or collateralization, supported by an eligible contract network.
Tenor Up to 24 months; preference for ≤ 12 months.
Advance Rate Per LTV grid; final rate set after underwriting and investor allocation.
Pricing Discount yield quoted case-by-case based on issuer/confirmation, tenor, and structure; bank, custody, and SWIFT charges are pass-through.
Retainer 105,000(USD/EUR/GBP) non-refundable on engagement; covers underwriting, legal coordination, and distribution.
Success Fee 2.75% of gross funded amount (minimum 125,000 in funding currency), deducted at closing.
Minimum Size USD 15,000,000(or EUR/GBP equivalent). Larger tickets welcomed.
Conditions Precedent KYC/AML and sanctions clearance; no-double-pledge certificate; issuer/confirming-bank verifications; beneficiary assignment or account control; signed funding documents.
Settlement Target 5–10 banking days from clean MT760 and satisfaction of CPs (timeline guidance, not a guarantee).

Closing procedure

1
RFQ submission

Client submits SBLC draft text, issuer/confirmation details, tenor, contract pack, and KYC.

2
Engagement

We issue indicative terms. Client signs the engagement letter and pays the retainer.

3
Structure and underwrite

We finalize wording, run diligence, set proceeds control, and size the advance rate with investors.

4
Distribution

We place the SBLC with funding counterparties and issue a closing checklist with CPs.

5
Issuance

Client delivers operative MT760 to the designated account and completes all CPs.

6
Funding and settlement

Funds are advanced against the SBLC. Our success fee and costs are deducted before disbursement.

7
Servicing and release

We monitor covenants and amendments. On expiry or cancellation, the instrument is released per the documents.

Eligibility and no double pledge

Eligibility
  • * ISP98 SBLC, operative via MT760, issued or confirmed by a rated bank
  • * Clear linkage to eligible contracts and verifiable cash flows
  • * Tenor ≤ 24 months; clean draft wording; minimum size USD 15,000,000
No double pledge
  • * No liens, prior assignments, or parallel financing of the SBLC
  • * No-encumbrance certificate and issuer/confirming-bank verifications required
  • * Beneficiary assignment or strict proceeds control at close

SBLC monetization FAQ

Do you accept leased SBLCs?

No. Only genuine, issued SBLCs tied to a legitimate commercial purpose are eligible.

How does confirmation affect LTV?

A well-rated confirmer can lift the advance rate by improving expected loss and regulatory treatment for many funders.

Is discounting always better than collateralization?

Not always. Discounting delivers upfront cash; collateralization suits revolving use with borrowing-base logic. We recommend the model that fits your contracts and issuer stance.

Which currencies are supported?

USD, EUR, and GBP as standard. Other currencies are case-by-case.

How fast can funding settle?

Typical 5–10 banking days after clean MT760 and conditions precedent, subject to parties and documentation.

Are proceeds net or gross of fees?

Proceeds are disbursed net. Our success fee and agreed costs are deducted at closing.

Disclaimers

We arrange on a best-efforts basis through regulated partners. This is not a deposit, investment advice, or an offer where prohibited. All terms are subject to full KYC/AML, sanctions screening, legal and technical diligence, investor appetite, and issuing-bank acceptance. Basel III and CCF references are general and may be applied differently by each institution. Final pricing, LTV, and timelines may change with structure and market conditions. We reserve the right to decline any mandate.

Apply To Monetize Your SBLC — Request A Term Sheet

Send the SBLC draft, issuer details, tenor, contract summary, and KYC. We reply with indicative LTV, discount yield, and a closing checklist.

Apply

Eligibility depends on KYC/AML, sanctions checks, instrument verification, and approval by funding counterparties and issuing banks. Nothing here is a commitment to fund.

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.

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