Ease and Sale of Financial Instrument Bank Guarantee (BG) And Standby Letter of Credit (SBLC) from AAA rated banks. Direct Pay Letter of Credit (DPLC) funding.

All monetization ends up as a recourse loan. With our cash backed Bank Guarantee or Standby Letter of Credit, you are expected to get an 100% LTV because it is cash backed and not asset backed (which has so many variable that has to be considered before determining the LTV by the beneficiary/beneficiary bank of the receiver of such asset backed Bank Instrument), but no bank will give you a 100% LTV except you have an arrangement with them before approaching us for the Standby Letter of Credit or Bank Guarantee. But you can be rest assured to get a maximum value ranging from an 80% to 95% LTV on any Standby Letter of Credit (SBLC) or Bank Guarantee (BG) issued by us. This basically equates to using the Standby Letter of Credit or Bank Guarantee as a collateral for a loan with your financial institution in simple terms.

In conflict to the point raised above, if you are using an intermediary for your monetization, some has structures in place for a fee or interest who can monetize your Standby Letter of Credit or Bank Guarantee for a non-recourse loan that they intend to personally guarantee. This is not a miracle, but with our experience in the industry, some of the power play monetizer have an exit in place that need a paper from a third party for them to enter into a trade that probably makes up to 400% on the paper. This gives them the play-ground to cover the interest on the credit line/recourse loan from the bank, pay you the LTV on the Standby Letter of Credit or Bank Guarantee and still make great profit. Unfortunately, it is not easy to come by such power players.

This is often referred to as PPP or PPIP. The main aim of every PPP is to create wealth and the first thing every client needs to understand that in this new age, Private placement programs are transactions of privilege and before you are invited into such programs, you must have gone through rigorous due diligence by any trader who puts you in such program. PPP creates wealth through anticipated profit. For Example: A person (individual, company, or organization) is in need of $100. He generates a debt note for $120 that matures after 1 year, and sells this debt for $100. This process is known as “discounting”. Theoretically, the issuer is able to issue as many such debt notes at whatever face value he desires – as long as borrowers believe that he’s financially strong enough to honor them upon maturity.

Off-Ledger Funds in the Banking System

Off-ledger banking systems allow institutions to conduct complex financial transactions outside of traditional ledgers, supporting access to non-recourse loans, historical assets, and commodities-backed securities for global development projects. Innovations like SWIFT GPI, Alliance Lite2, and RTGS enable secure, real-time, and compliant transactions, advancing international operations and humanitarian efforts. Through secure networks and efficient protocols, off-ledger banking supports fast, accurate transactions vital for large- scale investments and NGO activities.

Key Features:

Humanitarian and Economic Development: Focused on infrastructure, healthcare, and education across 150+ countries.
Historical Asset Utilisation: Utilises gold-backed assets and commodities for secure transactions.
Advanced Financial Systems: Uses RTGS and Alliance Lite2 for efficient large-scale transfers.

Off-ledger banking enables greater investment, poverty reduction, and alignment with global financial strategies.

Off-ledger funds, also referred to as off-balance sheet funds, denote transactions or accounts maintained separately from a bank's main accounting system. These assets or liabilities are excluded from the balance sheet but can influence a bank’s financial condition. They typically represent potential obligations or contingent assets that may arise under specific circumstances. For instance, a bank may hold special funds for purposes such as employee welfare or discretionary expenses, which are not reflected in primary financial statements.

Off-Balance Sheet Funds in Banking

Banks engage in off-balance sheet activities including issuing letters of credit, trading derivatives, and securitizing assets. An example is contingent liabilities like letters of credit, where the bank agrees to pay a beneficiary if set conditions are met. These commitments are not recognized as liabilities on the balance sheet until the specified conditions occur, though they constitute potential obligations.

These practices can affect a bank's reported financial position and risk profile. Off-balance sheet activities can alter a bank's risk exposure without directly changing metrics such as reported debt levels.

Differences Between Off-Balance Sheet Items in Banks and Central Banks

Distinguishing between on-balance sheet and off-balance sheet items helps in the assessment of the risk profile and financial position for commercial and central banks. The nature and implications of these items vary between the two types of institutions.

Commercial Banks

For commercial banks, on-balance sheet items include conventional assets and liabilities, such as loans, deposits, securities, and equity capital, which directly impact financial statements and are subject to regulatory capital requirements.
Off-balance sheet items for commercial banks do not appear on the balance sheet. These can include guarantees, letters of credit, derivatives contracts, or securitized loans, which are contingent on certain events or conditions. These instruments are used in risk management and may help address regulatory capital requirements. However, they may also introduce additional risks; for example, during the 2008 financial crisis, off-balance sheet securitized mortgages contributed to notable losses.

Central Banks

Central banks differ from commercial banks in their primary functions, which involve managing the national money supply, setting interest rates, and maintaining financial system stability.

On-balance sheet items for central banks generally consist of foreign exchange reserves, gold reserves, domestic government securities, and loans to commercial banks. These resources are utilized in monetary policy implementation and foreign exchange management.

Off-balance sheet items for central banks may include commitments to provide liquidity to commercial banks or to intervene in foreign exchange markets. These are not immediate liabilities but could result in future cash outflows depending on developments.
For central banks, the distinction between on-balance sheet and off-balance sheet items does not pertain to regulatory capital requirements, unlike in commercial banks, as central banks are not subject to such regulations. The focus is instead on risk management and monetary policy execution.

Converting Off-Balance Sheet Funds to On-Balance Sheet Funds

Transforming off-balance sheet funds into on-balance sheet funds can affect a bank's capital structure, liquidity, and risk exposure. Institutions need to weigh the advantages and disadvantages before proceeding and must comply with relevant regulatory standards for on-balance sheet assets.

Standby Letter of Credit (SBLC) and Bank guarantee (BG) from AAA rated banks Private Placements – Customized and cost-effective medium-term financing to help quickly maximize profits. It monetizes such bank instruments as clients Bank Guarantees (BG), Standby Letters of Credit (SBLC) , Irrevocable Letter of Credit, Bank Draft, Medium Term Notes and some Long-Term Notes. Why does a trader need your Bank Guarantee, Standby Letter of Credit or Medium-Term Notes:

No private placement program can start unless there is a sufficient quantity of money backing each transaction. It is at this point the clients are needed, because the involved banks and commitment holders are not allowed to trade with their own money unless they have reserved enough funds on the market, comprising unused money that belongs to clients, never at risk.

For Example: The trading banks can loan money to the traders. Typically, this money is loaned at a ratio of 1:10, but during certain conditions this ratio can be as high as 20:1. In other words, if the trader can “reserve” $100M, then the bank can loan $1B. In all actuality, the bank is giving the trader a line of credit based on how much money the trader/commitment holder has, since the banks won’t loan that much money without collateral, no matter how much money the clients have. Because bankers and financial experts are well aware of the open market, and equally aware of the so-called “MTN-programs”, but are closed out of the private market, they find it hard to believe that the private market exists.

HOW SAFE IS PPP:
Such programs never fail because they don’t begin before all actors have been contracted, and each actor knows exactly what role to play and how they will profit from the transactions. A trader who is able to secure this leverage is able to control a line of credit typically 10 to 20 times that of the principal. Even though the trader is in control of that money, the money still cannot be spent. The trader need only show that the money is under his control, and is not being used elsewhere at the time of the transaction. For Example: Assume you are offered the chance to buy a car for $30,000 and that you also find another buyer that is willing to buy it from you for $35,000. If the transactions are completed at the same time, then you will not be required to “spend” the $30,000 and then wait to receive the $35,000. Performing the transactions at the same time nets you an immediate profit of $5,000. However, you must still have that $30,000 and prove it is under your control. Confusion is common because most seem to believe that the money must be spent in order to complete the transaction. Even though this is the traditional way of trading – buy low and sell high – and also the common way to trade on the open market for securities and bank instruments. This is why client’s funds in Private Placement Programs are always safe without any trading risk.

Compared to the yield from traditional investments, these programs usually get a very high yield. A yield of 50%-100% per week is possible. For example: Assume a leverage effect of 10:1, meaning the trader is able to back each buy-sell transaction with ten times the amount of money that the client has in his bank account. In other words, the client has $10M, and the trader is able to work with $100M. Assume also the trader is able to complete three buy-sell transactions per week for 40 banking weeks (one year), with a 5% profit from each buy-sell transaction.

The Standby Letter of Credit and Bank Guarantee is provided by our bank(as the provider) to the beneficiary’s account/bank and it is transmitted interbank only through SWIFT (MT760). During the lifespan of the instrument, the beneficiary may utilize it for the two main and popular purpose of credit enhancement (raise loan, enhance credit line) or as a payment guarantee (Trade positions of a buy and sell contract for good and/or services to be rendered).

At the end of the tenure of the agreement that guided the issuance, the beneficiary is expected to return the bank guarantee to our issuing bank without encumbrances or liens and the beneficiary also has the obligation to indemnify us against any loss incurred against such instrument. In addition, the beneficiary also has the option of extending the contract because our collateral transfer agreement or Deed of agreement always comes with an option of rolls and extension of up to 5 years and in some cases 10 years depending on how strong the beneficiary is placed and our due diligence.

Our Bank Guarantees and Standby Letter of Credit are available from the range of $/€5 million to United States $/€ 20 Billion. Any amount over $/€500 Million is achievable in tranches till the maximum limit is expended. All depends on the intake capacity of the beneficiary/applicant. Our Bank Guarantee and Standby Letter of Credit is issued from AAA rated banks only and it is widely accepted in all banks in the world with some exception that we may not be willing to send out a SWIFT to some banks/financial institutions based on our previous experience and relationship with such bank/institutions.

There is always an option for the applicant/beneficiary to submit their verbiage for review depending on the approval of our bank otherwise, our bank’s standard verbiage will be used in SWIFT transmission of such bank instrument which will be made available in the contract which is usually in the ICC758 (UPC 600) format which is widely accepted for activation of credit line. Our contract fee is charged at a rate of 2.5% and there are variables that determines this which all falls on our due diligence on the beneficiary/receiver and obviously, the contract size also has an effect on the pricing.

Due Diligence before an investment: why it is important and what it involves. What we talk about when we talk about due diligence

What is meant by "due diligence"? It is an investigation to gather information about the target company, whether it is an established company or a startup, in order to verify and assess any risks associated with the deal to enter the company. Due diligence becomes a key tool for managing all aspects of the deal, including establishing appropriate collateral, setting conditions for closing, delineating the seller's liability, and allocating risk to the buyer/investor.

Legal due diligence

Due diligence can focus on different aspects of the target company. In particular, legal due diligence plays a central role in assessing risks in consolidated or scaleup companies. Think of liabilities from ongoing or potential litigation and the risk of penalties for regulatory noncompliance. In startups, such risks are often mitigated, but it is still essential to focus on corporate documentation, such as bylaws clauses, that are enforceable against third parties and can affect investor choices. For example, co-sale clauses that can result in forced share assignments or veto rights over strategic choices given to individual shareholders. In addition to corporate documentation, it is critical to verify the existence and ownership of intellectual property held by the target company, including patents, in all countries in which the company intends to operate.

Assessing risks in consolidated or scaleup enterprises

Financial due diligence

Alongside the legal due diligence is the so-called financial due diligence, aimed at "taking a snapshot" of the economic magnitudes that influence the value of the deal, such as net financial position, EBITDA, and enterprise value. An assessment is made of whether economic value can be generated in the future and the conditions for negotiating an appropriate price are verified.

Defining the economic value of the business

Often, however, in the early stages of a startup's life, many aspects are left out because the startup has not developed adequate metrics to be properly valued. Therefore, investor entry is made by subscribing to equity financial instruments, which will give the right to conversion into a corporate stake when it is possible to evaluate the innovative enterprise, preliminarily skipping some typical due diligence steps. In this case, however, it is necessary to consider some prior information that may affect the investor's participation. One must inquire about the presence of other previous investors and the percentage of participation they will have as a result of the future capital increase. Another aspect to consider is a prospective valuation of the company at the time of conversions, that is, a kind of posthumous valuation of the company and post-money valuation ceilings.

In addition to these trading-relevant aspects, prior verification of the company's approved equity instrument regulations is appropriate to understand the rules of operation also from the perspective of loss sharing of the dedicated reserve.

The stages of due diligence

Conducting due diligence usually involves no binding commitment. Therefore, no obligation can arise from its conduct.

The non-binding term sheet

Usually, the initiation of the investigation is done through the signing of a non-binding term sheet, except for the confidentiality of information and the conduct of negotiations in good faith.

The term sheet includes the terms and conditions of the investment transaction and is a preparatory document for due diligence. Its successful completion, in the opinion of the investor, is a condition for signing the agreement. Due diligence may also result in other elements becoming conditions for closing, such as the target company signing a relevant contract or acquiring a certain license to operate in a specific sector.

Fee od Due Diligence

The analysis resulting from due diligence often incurs costs, for example for consultants who assist the investor in the technical analysis of corporate information and documents. Generally, as a matter of practice, such costs are borne by the person incurring them, with no provision for reimbursement. However, it is possible to provide for the reimbursement of due diligence costs in the event that a party withdraws from negotiations without cause after they have matured to a certain extent through a break-up fee equal to the costs incurred.

The final full report

At the end of the due diligence, the full report is prepared in which all the information acquired and critical issues that emerged from the analysis are noted. The conclusions of the due diligence are indicated with a mapping of the critical issues highlighted in different areas of focus. In carrying out the investigation, so-called "red flags" or indicators to keep in mind during due diligence are useful, which can lead to further investigation if there are possible critical issues.

It is also possible for the target company itself to prepare a disclosure letter, a spontaneous statement on facts relevant to the investor's decision or potentially critical to the target company, such as the possible emergence of litigation or possible liabilities.

It is also possible for the target company itself to prepare a disclosure letter, a spontaneous statement of facts relevant to the investor's decision or potentially critical to the target company, such as the possible emergence of litigation or possible liabilities.

In this way, the founders or the company releases itself from liability for future losses by allocating the risk to the intended successor, who is aware of and accepts the situation represented. All of this information will then be transferred into the representations and warranties made by the founders, which may relate to, for example, the absence of potential litigation, the accuracy of accounting records, the ownership of intellectual property, and the existence of permits, authorizations, or licenses.