Bank Instruments
WHAT YOU SHOULD KNOW

Bank instruments can be used to enhance your ability to apply for a line of credit with your bank. It can be used as collateral when your bank requires more collateral than what you have when you ask them to fund your project. Through our providers we can arrange for a bank instruments ( BG/SBLC ). These instruments are 100% cash-backed and can be used as collateral.
Our provider only offers instruments that are from the top 25 World Banks – from North America and Europe like HSBC, Deutsche, UBS etc. This makes the instruments more likely to be acceptable to banks anywhere in the world.

To successfully apply for an SBLC you need to be aware of these vital points: 

  • You need to have a good project requiring at least 100M USD/EURO
  • You need to have the money to pay for the leasing of the instrument, you may also need to pay intermediaries if they are involved in the transaction.
  • You need to have a believable and realistic exit strategy to repay the loan and return the instrument at the end of the term.

All the instruments that are leased through our provider are callable, assignable, fully transferable and lienable.

It is not possible to use an instrument to secure a commodity trade and pay for the instrument out of the profits from the transaction. When paid for and used correctly, these instruments provide numerous lucrative options. we can provide BG’s, MTN’s, BOND’s, SBLC’s and CD’s, which can be blocked or delivered via SWIFT.

MTN Buy/Sell Programs
WHAT YOU SHOULD KNOW

ENTRY INTO A MTN MANAGED BUY/SELL PROGRAM ( ALSO KNOWN AS A PPP OR HIGH YIELD PROGRAM ) IS A PRIVILEDGE AND NOT A RIGHT, AND IS ENTERED INTO ON AN INVITATION BASIS. YOUR ENTRY INTO THESE PROGRAM ARE STRICLY BASED ON YOU FIRST PASSING COMPLIANCE WITH THE TRADE PLATFORM.

Our clients enjoy privileged direct access to four (4) of the seven (7) largest Licensed Traders and trade platforms in the world. These are the preeminent Traders and trade platforms in the business; highly skilled and supremely qualified, with all the necessary approvals, License and registrations – and the muscle and “firepower” – to get the job done. Not all Platforms are created equal.

The Private Placement Programs or High Yield Investment Programs are Private Programs based on the purchase/sale of bank financial instruments mainly Medium Term Notes (MTN). These instruments are bought fresh-cut with a significant discount on their face value to then be resold at a higher price in the secondary market. The difference between the sale price and the purchase price is the Trader/Investors gain. These programs are offered to clients with high spending power and can only be executed by Traders with a license to carry out such operations. An important part of the returns is destined to humanitarian causes and to the financing of your project.

Platform trading utilizes the expertise of qualified traders who are capable of engaging in the purchase and sale of investment- grade bank debentures in the wholesale market. The trading operation is normally referred to as “controlled” or “managed” bank debenture trading because the supply side of the financial instruments and the “exit buyer” for the financial instruments have already been pre-arranged, and the price of the instruments already contracted for, thereby ensuring that the financial instruments will be sold to the stipulated “exit buyer” at a pre-agreed higher price. Hence, each and every completed trade contractually guarantees a net profit to the trader (and never a net loss). It’s a legal arbitrage.

Traders, for their part, normally trade against a non-depleting, tradeable line-of-credit established on behalf of the client. That’s because Traders, under present rules, can’t use their own assets to trade against. Traders work with standard banks that offer credit facilities. These credit-issuing banks, though, impose strict requirements on borrowing, most notably that credit lines must be “capitalized” by an acceptable form of collateral held in the “care, custody and control” of the credit-issuing facility. Hence, the need for trade platforms to implement exacting procedures which fully satisfy the credit- issuing bank’s “care, custody and control” standard for activating credit lines and the requirement that interested clients comply fully with.

1. Submission of Documentation
WHAT YOU SHOULD KNOW

The client must provide all required documentation for the submission of the operation at the Traders Office:

Set Compliance: After the initial contact with the client and after studying the viability of the operation, the client will be provided with the compliance set for its proper completion and signature.

Asset: The Proof of Funds (POF) and all bank documents must be manually signed by two bank officials currently in charge of the client’s account. Electronic signatures will not be accepted. In the case of documents requiring a verification by the Euroclear system/DTCC, it will be imperative to print the 12 pages. IMPORTANT: We do not accept any kind of procedure that prohibits all telephone calls from “Bank to Bank” since this is necessary to verify and ensure that we are dealing with a real signatory of the account, and that funds and/or assets are not an object of “leasing”.

Once the operation is submitted at the Trader’s Office, they will immediately proceed to the verification of the assets and the realization of the “Due Diligence” (under study for acceptance) of the client and the submitted assets. The client must not be connected with the mafia, drug traffic, weapons, or any other illegal activity. Also, the asset must be good, clear, clean, with a non-criminal origin and must be freely available for the customer.

SOVEREIGN GUARANTEE MONETIZATION
WHAT YOU SHOULD KNOW

Sovereign guarantees are given by host governments to assure project lenders that the government will take certain actions or refrain from taking certain actions affecting the project. Although a blanket sovereign guarantee of all project risks is impossible to obtain in any project finance transaction, many of the legal and political risk categories typically encountered in an infrastructure project will be well within the host government’s ability to control and may therefore be fairly allocated to such host government.

In theory, the government is forced to accept risks such as exchange rate and political risk because it is better able to manage it through sound economic policies. In practice, however, the heavy debt burden under which many a developing country is laboring may be compounded when, during a period of economic difficulties in the host country, the beneficiaries of a guarantee ask the sovereign to make good on its promise.

As the current financial crisis in Asia shows, very few emerging market nations are able to withstand the resulting stampede. The value of a sovereign guarantee is further constrained by the sovereign debt ceiling. As a result, many lenders are taking a second look at, and in some cases finding ways to avoid, the need for such guarantees through, for example, other risk mitigation measures such as political risk insurance from multilateral, bilateral and export credit institutions as well as private insurance companies.

But even where the government is financially strong, a government’s willingness to give a guarantee will depend as much on the degree to which it is committed to the project as on its perception of what the market will bear. As competition to win deals in these emerging markets heats up, more and more sponsors are finding it harder to convince host governments to execute guarantees, particularly where competitors exist who have found other ways to mitigate the offending risks

HARD ASSET MONETIZATION
WHAT YOU SHOULD KNOW

OBJECTS OF ART, PRECIOUS STONES, MINES, REAL ESTATE, ETC:

INVESTOR MINDSET

An investor wanting to monetize a hard asset and/or take it into trade must clearly understand and focus on the fact that a trader’s credit lines are not triggered by an Investor’s asset(s) itself. What triggers a trader’s credit line is a blocked message coming from the Investor’s Bank, which guarantees (with full banking responsibility) the asset blocking towards the monetization and/or trading bank.

It is not uncommon for a bank to be unwilling to assume full responsibility for the securitization of a hard asset since the bank lacks the facilities to reasonably assign a value on the asset. In these situations, the solution is often as simple as obtaining a policy of underwriting that securitizes the assets for the bank to support the assets with full banking responsibility. This insurance policy/underwriting contract is also known as an “insurance wrap.” The bank can then support the underwriting/wrap towards the monetization and/or trading bank(s).

The bottom line is that you need a bank that supports you, your assets and any other supporting parties (such as underwriters) with full banking responsibility. All parties and paperwork must be professionally synchronized.

REQUIRED ITEMS FOR SUCCESS:
  1. Copies of proof of ownership of the asset(s)
  2. Copies of any paperwork that supports the asset’s authenticity and value such as appraisals, attestations, receipts and/or other reports
  3. Any safe-keeping receipts (SKR)
  4. Client Information Sheet (CIS) that includes client attorney info
  5. Letter of Intent (LOI)
  6. Letter of Non-Solicitation
  7. History of the asset
  8. Attestation Letter from client’s attorney/advocate demonstrating that the attorney has verified the authenticity of the client, the authenticity of the asset, any underwriting, as well as the client’s relationship with client’s bank.

Tip: Non-solicitation and asset history language can be intelligently worded and included within the LOI to avoid creating multiple documents.

VENEZUELAN BOND MONETIZATION
WHAT YOU SHOULD KNOW

RT Capital Inc. has direct access to various financial instrument monetization sources.

In order for the monetization to occur, the instrument is blocked on behalf of a recourse or non-recourse lender, typically for a year and a day.

The quality of a compliance package is the key issue and critical factor in achieving successful monetization at the highest LTV.

REQUIRED ITEMS FOR SUCCESS:
  1. Copy of the instrument(s) or a ready, willing, and able (RWA) commitment letter from the issuer.
  2. Copy of safekeeping receipt (SKR) to show that the instrument is in a safekeeping custodial situation
  3. Copies of any other paperwork that supports the instrument’s authenticity, ownership, and/or value
  4. Copies of any underwriting policies
  5. Client Information Sheet (CIS) that includes client attorney info
  6. Letter of Request (LOI) on client letterhead, which includes non-solicitation language and description of the history of the asset
  7. Corporate resolution (if applicable)
  8. Copy of banker’s business card
  9. Copy of attorney/advocate’s business card
  10. Attestation Letter from client’s attorney/advocate attesting that the attorney has verified the authenticity of the client, the authenticity of the asset with the central bank, as well as the client’s relationship with client’s bank
  11. Euroclear pages (22 pages) if loaded on Euroclear
  12. Central bank documents:
    • Custody Certificate (SKR)
    • Affidavit
    • Certificate of Ownership
    • Authorization to Verify and Authenticate (ATV)
    • Commitment Letter confirming custody and readiness to transfer and assign
    • Account Statement
  13. Letter on client’s bank letterhead confirming the authenticity and ownership of the bond