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The monetization of a Standby Letter of Credit (SBLC) consists in securing a proportional release of funds from an existing credit facility collateralized by a lien on the SBLC, which is one of the clearest and most transparent forms of collateral, as they carry the same credit rating as the issuing bank. There is therefore no lengthy due-diligence process.
Ideally monetization is best suited for projects which are short-term and self-liquidating in nature. These instruments are easily transmitted via the SWIFT messaging system to or from more than 11,000 banks in more than 200 countries worldwide. This simplifies the ability to release credit facilities for projects in foreign jurisdictions without having to actually transfer cash. Other features, such as being irrevocable, divisible and transferable, make it a desirable form of collateral for monetizing.
Structured Facility Solutions
Stantonreed specializes in facility finance for trade related transactions.
Our firm is an experienced origination agency providing back-office support to financial principals in underwriting trade finance facilities.
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