Standby Letter of Credit ‐ Availability
Instrument : Standby Letter of Credit (SBLC)
Issued as : Fresh Cut
Currency : Euro (€) or USD ($)
Issuing Bank : HSBC London
Price : 44% of face (inclusive of 2%)
Settlement Banks : HSBC London, Barclays Bank London, DBS Singapore
Minimum : 100m Face Value
Contracts : Available
Initial Requirement to commence
1) The Buyer must hold Clear Cash Funds on account or have an Active Credit Facility
capable of releasing fluid funds, the Forty Four percent (44%) of face value.
a) The Buyer must be able to issue and deliver a Bank Confirmation Letter (BCL),
signed by two bank officers stating;
Their client’s account is in good standing and holds fluid cleared cash funds to
the value of a stated amount (the settlement sum as 44% of face) and that these
fluid funds can be released as a payment transfer via SWIFT MT-103 upon
their client’s instructions.
b) If the Buyer is utilising a credit facility, or has a credit line, then the BCL retains
the same information, but must clearly state that the credit facility is active,
collateralised and the release of fluid funds, via SWIFT MT-103 will be
conducted upon their client’s instructions.
Procedure to Enter Contract
2) Buyer submits their KYC (Know Your Client) Documentation, to include;
a) Client Information Sheet (CIS) with a colour copy of their passport, to
internationally accepted standards, with banking co-ordinates for receipt and
settlement of the instrument.
b) Once the Buyers KYC is accepted the email co-ordinates for transmission of a
courtesy copy of the (BCL) to the Provider will be released.
c) The Buyers bank then transmits an email with the BCL as an attachment to
their client, with a Courtesy Copy (CC) to the Providers email address.
d) This bank transmitted email with the (BCL) is require for the Providers
Compliance and final approval of the Buyer, it confirms the Buyers ability to
contract and complete, without this the (SBLC) is not available.
3) Upon receipt of the courtesy copy (CC) emailed (BCL), the Provider will verify the
Banks IP Address and (the same day) contact the Buyer to finalise and arrange the
purchase and delivery of the SBLC and verbal commitment and agreement to buy.
At this stage there is no requirement for the Buyer to sign a contract, this is only
conducted once the (SBLC) is available and secured in the Buyers Name.
4) Upon agreement to proceed, the Provider purchases and secures the (SBLC), in the
name of the Buyer ready for delivery to them, the (SBLC) is usually issued and
available within two (2) international banking days.
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5) The Provider will confirm to the Buyer that the (SBLC) has been secured and
purchased and is held in custody ready for delivery.
a) The Buyer and Seller then sign and exchange the purchase agreement.
6) Upon receiving the signed purchase agreement from the Buyer, the Provider will
present the custodial bank account details at (HSBC London) and the designated
contact information for the custodial bank officer.
a) The Buyer’s bank officer contacts the custodial bank officer via telephone and
or e-mail and subsequently sends a SWIFT MT-799 Request for Confirmation
that the (SBLC) is in custody and has been purchased in the Buyer’s name.
However, if the Transaction Bank for the Buyer is HSBC London, Barclays
London, or DBS Singapore, then the transaction may be completed internally.
If the Buyers Account is elsewhere then;
7) Buyer’s bank sends a MT-799 SWIFT Request for Confirmation to HSBC London
requesting an MT-799 that the (SBLC) has been purchased in the Buyer’s name and
is in custody at the Provider’s bank and available for purchase and delivery.
8) Provider’s bank responds with a SWIFT MT-799 Confirmation, issued with full bank
responsibility that the (SBLC) has been purchased in the Buyer’s name.
a) The Transaction Code on the Purchase Agreement will be referenced in the
SWIFT MT-799, as in custody at HSBC London and ready for delivery and that
upon receipt of the SWIFT payment MT-103 the (SBLC) will be delivered
immediately via MT-760 SWIFT to the Buyer’s account.
The Buyer may send the MT‐103 payment only after the MT‐799 confirming that
the Provider’s bank will deliver the SBLC has been verified and authenticated.
9) Buyer’s Bank sends the MT-103 payment.
10) HSBC London delivers the SBLC to the Buyer’s bank via MT-760.
11) Tranches may be conducted as may be agreed and contracted.
For ease of operation, if The Provider does not already bank with your receiving
and settlement bank, they may consider opening an account at your receiving
bank to allow internal settlement and deliver to be conducted.
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