Collateral Transfer


The ability of IntaCapital Swiss to arrange a Collateral Transfer Facility has proved very popular amongst their client base, especially as most clients will be arranging a line of credit upon receipt of the Bank Guarantee on their bank account.

As in most cases, the client will already have arranged (upon receipt of the Bank Guarantee on their account) a credit line with their bankers. However, said bankers sometimes refuse a credit line to their clients. This can be for differing reasons such as limited turnover on the account or the bank not agreeing the clients figures on future profit.

IntaCapital Swiss as part of their dedicated service to their clients, are able to arrange credit lines where their client’s bankers have refused them a credit line facility.

The Collateral Transfer Facility is one of the most sought-after facilities by our client base. Our ability to provide Bank Guarantees for our clients has indeed proved a valuable asset in their cash flow predictions, especially as most clients will be arranging a line of credit against the Bank Guarantee.

Once the Bank Guarantee has arrived on the clients account, in most cases their bankers will have arranged a line of credit against the Bank Guarantee. However, from time to time, bankers will turn down a request for a line of credit. This can be for a number of reasons but it is at the Banks Credit Committee’s discretion.

In such instances, IntaCapital Swiss can assure their clients that in the absence of a line of credit from their bankers, they are in the unique position of being able to arrange a line of credit for their client.

IntaCapital Swiss are Europe’s leading Boutique Finance Company in Collateral Transfer and Collateral Transfer Agreements. A Collateral Transfer Agreement is between two parties, the company that owns the Bank Guarantee, (See What Is a Bank Guarantee), known as the Provider, and company that will lease the Bank Guarantee, (See What Is a Leased Bank Guarantee), known as the Beneficiary.

Within the terms of a Collateral Transfer Agreement, a Bank Guarantee usually has an expiry date of one year, but the Beneficiary can contract for multiple years, up to and including seven years, where the Bank Guarantee will rollover automatically. However, if the Beneficiary has only contracted for one year, and wishes to rollover the Bank Guarantee for another year, it is incumbent upon them to advise IntaCapital Swiss, at least one month before the expiry date.

The costs for leasing a Bank Guarantee in year one are greater than the costs in year two. In year one the Beneficiary must bear the costs of the Provider’s fees, the cost of borrowing for one year, booking fees, legal fees, due diligence and arrangement fees. In subsequent years, the Beneficiary only has to bear the cost of borrowing and the Provider’s fees.

It is normal for the Provider’s fees to be fairly static, however, the cost of borrowing is subject to market fluctuations, and therefore 12-month Euribor and 12-month Libor are both subject to change. Any increase in the 12-month interest rates will be for the account of the Beneficiary.

IntaCapital Swiss know banking.

Enquire now and find out how IntaCapital Swiss can help you with your finance needs.

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