Bank Instruments, as specified and agreed upon by contract/agreement, are assigned in individual or corporate name and are primarily used for provision of a project, commercial endeavours, balance sheet and credit enhancement. The Bank Instrument is made available as an enhancement instrument only.

Applicants/Borrowers may assign the rights to use the Instrument, however, its ownership will not be transferred. It is not permitted to sell or pledge the Instrument. If Applicants/Borrowers wish to pledge the Instrument, arrangements can be made with the banks congruent with banking rules and regulations during any time of the validity of the Bank Instrument. If Applicants/Borrowers will use borrowed instrument as collateral, borrower’s Bank must undertake the irrevocable commitment to return leased instrument unencumbered, free and clear of any debts or claim.

Within the purposes of bank instruments lending program, Lenders offer following services, all available WITH or WITHOUT pre-advice:

• Application to borrow seasoned financial instruments (i.e.: BOND/MTN)
• Application to borrow seasoned financial instruments (i.e.: BOND/MTN) with option to receive fresh cut BG or SBLC issued by Lender’s bank once purchased bank instrument borrowed by client;

G.M.S.L.A. (Global Master Security Lending And Borrowing Agreement) is valid for 30 calendar days from issuing date. The contractual documentation is negotiated in line with Applicant/Borrower’s specific requirements. Once the parties have duly executed a Contract/Agreement, parties or their representative are only legal and authorized entities allowed to handle the Lending transaction, to receive the documents and to maintain all communication.

Lending Agreement can be issued for one only instrument (or tranche) and Borrower can have one agreement at a time. Once first agreement has been performed, Lender can accept another application form for another instrument

Specifications: Bank Instruments (list of which is supplied by lender) are issued by major international banks and assigned directly in the Borrower name. Applicant/Borrower have to be professional and familiar of how to use bank instruments. Lender do not educate or provide any advise as Borrowers can incorporate such financial confirmation into their financial plans.

Type of Instrument and re-delivery to Lender: Depending on availability, the Bank Instrument/Collateral is offered in the form of Certificate of Debt: which can be MTN, BONDS, EUROPAPERS, COMMERCIAL PAPERS, BG, SBLC. Lending period is 1 (one) year plus one  day from MT760 date. Applicant/Borrower must return the bank instrument unencumbered to the Lender 15 days before its maturity date; it is possible to extend, with 15 pre-advice days, the leasing period, early and for maximum 5 (five) years (yearly service fees remain the same of first year).

Minimum/maximum face value amount availability: Transactions for minimum face value amount of US$ or EUR 10,000,000.00 are acceptable immediately, subject to approval of the Applicant/Borrower application form. Lender always include in the list some instrument having  face value amount lower than ten million; to note that for these bank instruments service fees  must be paid by unconditional wire transfer. Applicant/Borrower who need amount lower than ten million, must select that instrument in the list and cannot have a tranche of higher face value amount bank instrument.

List of financial instruments supplied by lender: it is monthly updated and includes full details of the bank instruments (issuing bank name, currency, face value amount available at the date of the list, yearly leasing fees rate, maturity date and ISIN Code). Applicant/Borrower can select the instrument (for full face value amount or a tranche of it) which they like to borrow and note that on receipt of the application form, Lender will verify availability of selected bank instrument because contract/agreement is issued on a first come first is served basis. In case selected bank instrument is no more available, Lenders will offer another instrument at similar rate. Lender can definitively confirm instrument availability only after the call option.

Security Lending and Borrowing Agreement: The contractual documentation is negotiated in the line with Applicant/Borrower specific requirements. Once the parties have duly executed Contract/Agreement, the Applicant/Borrower is only legal and authorized entity, which is allowed to handle the lending transaction, to receive the documents and to maintain communication with the Lender or their representative.

Commencement of transaction: Upon receipt and acceptance of Application Form, Lender will send Lending Agreement for signature, issued according to Application form requests and in the same time Applicant/Borrower will receive the invoice covering bank expenses due to permit to cover the call option settlement fees to reserve bank instrument, in the following amounts:

Bank instruments with face value amount 5 million to 499.99 million: EUR 50000 (Fifty thousand Euro)

Bank instruments with face value amount from 500 million to 999.99 million: EUR 75000 (Seventy five thousand Euro)

Bank instruments with face value amount from 1billion: EUR100000 (Hundred thousand Euro)

Currency must be in euro no matter what currency the instrument is in.

Why Lender ask clients to pay call option: On many occasions Lender are asked why a client should pay a call option deposit a/o if he can make a deferred payment or add it to the service fee plus many other requests. This should not be interpreted as an upfront fee. This is a real costs that Lender must pay. The deposit is contractually guaranteed to be returned by the Lender upon successful completion of the transaction. As per below explanation, when Lenders receive a request to borrow a bank instrument they are obliged to take out an option for which fees must be paid; if for some reason the Borrower did not precede with the lending process the Lender would be out of pocket. It is therefore essential that anyone wanting to borrow a bank instrument must pay a Call Option fees which are either refundable on completion of the transaction or can be deducted by Borrowers when they arrange for payment of service fees.

What is a call option: In finance options are types of contracts, including and, where the future payoffs to the buyer and seller of the contract are determined by the price of another security, such as a common stock. More specifically, a call option is an agreement in which the buyer (holder) has the right (but not the obligation) to buy an asset at a set price (x y) and the seller has the obligation to honor the terms of the contract. A put option is an agreement in which the buyer has the right (but not the obligation) to exercise by selling an asset at the strike price on or before a future date and the seller has the obligation to honor the terms of the contract. Since the option gives the buyer a right and the seller an obligation, the buyer pays the option premium to the seller. The clearing houses guarantee that an assigned seller will fulfill his obligation if the option  is exercised.

Pre-advice (option): At request of the Borrower, Lender is ready, willing and available to organize the delivery of a Pre-Advice which can be sent as follows:

By Swift MT799/MT999 – nor from US or European banks due to non-solicitation regulations, due to the fact that at this step of leasing process, Lender have not yet purchased the bank instrument therefore are not its owner – to the Borrower’s designated bank at the cost of EURO € 100000;

By certified email sent by lender compliance officer to the Borrower’s designated bank at the cost of EURO 50,000.

When pre-advice is issued, instrument reservation (call option) is valid for further 30 days from the date of pre-advice swift or certified e-mail.

Delivery of documents: After signature of lending agreement and wire transfer of the call option fees in the above agreed mentioned amount, within 48 hours after receipt of funds on the Lending Manager Account, call option of the bank instrument will be arranged by the Clearing and Settlement Company (Lending Manager). After that Lender will send their Corporate Pre-advice of Invoice with all details of the Bank Instrument including Corporate Deed of Assignment, Bond Power, Euroclear, Clearstream and Bloomberg Printout (if available), Security Card of the Stock Exchange market where the instrument is quoted, Prospectus of the Issuing Program of the Bank (if available), to permit the designated Borrower’s Bank Officer to check and authenticate bank instrument.

1. Payment of Service Fees: Borrower must provide for the payment of service a/o leasing fees, not later than 20 calendar days from Corporate Pre-advice of Invoice date, according to following terms (which drafts are attached and cannot be amended by Borrower or their bank) :
2. conditional ICPO (Irrevocable Corporate Pay Order) endorsed by an acceptable borrower bank (attachment 1) or
3. unconditional bank backed Promissory Notes (attachment 2), with expiring date from 180 to 270 days as negotiated between the parties (having the endorsement per aval of an acceptable bank) or
4. conditional swift MT103 or MT700 (attachments 3 and 4)

No other payment terms and conditions, no payment from profits that Applicant/Borrower expect in the future through trading/platform or loans, are acceptable. Lender are not willing to evaluate joint venture arrangements or change any of above conditions.

1. Payment of Intermediary fees: Intermediaries are allowed to receive a commission (International standard rate is 3%) which is not included in the service/leasing fees rate. To this purpose Lender will attach to application form the FPA draft for intermediaries use and purpose. Lender authorized representative do not participate on the brokers/intermediaries FPA.
2. Assignment of bank instrument: Upon successfully due diligence arranged by Lender compliance officer on receipt of payment covering service, Lender will send SWIFT MT 760 on receipt of which the conditional payment must be unblocked and released to Lender.
3. Bank communication: Lender and Borrower banks will not communicate and will not deal directly with each other unless all parties of the transaction has given written authorization. There shall be total freedom of communication between the parties of the contract at all times. Borrower Banks must be banks which are listed in the International Bankers Almanac. If Borrower banks are not registered/listed in the Swift System as required, the Borrower must introduce a Closing Bank (internationally recognized and registered within the Bankers Almanac), which must have full knowledge of the lending transaction signed by and between Lender and Borrower, for the receipt of the Pre-Advice and for any further bank-to-bank communication,
4. Knowledgeable and awareness of the bankers: Borrower Bank Officer(s), provided that the Borrower Closing bank is qualified as per the above, must be fully aware and knowledgeable of the on going lending transaction. This means that at any specific time, when a Bank-to-Bank communication will be established, between the Borrower Bank and the Lender Bank, whether for Pre-Advice transfer or for bank Instrument transfer, Borrower Closing Bank Officers will be in the position to fully approve the receipt of the Instrument in favour of the Borrower, as well as to confirm payment for this Instrument and take engagement to return back by swift bank instrument to the Lender bank 15 days before its maturity date unencumbered and free on liens.

1. Penalty and expenses for extension: Borrower can ask to Lender for further 30 days extension of lending agreement validity at least 5 days before call option expiring date. If Lender accept Borrower request, an Amendment will be issued including invoice for the amount of EUR 15,000. After call option extension, Lender will send to the Borrower updated documents and print out. The 30 days extension begins on the first day this agreement expires.