|
Negotiable
Financial Instruments > This page
Discounting of bank guarantees (BG's)
(Redeeming for cash or raising a credit line)
The
"Discounting" of Prime Bank Guarantees (BG's) is based on the
following criteria and generally accepted conditions
Notes (Member section)
Hints (Member section)
The following bank guarantees are very difficult to do at the present,
and only a 'Credit Line' could be raised (Member
section)
The following bank guarantees are not currently tradable (Member
section)
The
"Discounting" of Prime Bank Guarantees (BG's) is based on the
following criteria and generally accepted conditions:
- Depends on the type of BG, i.e. Face Value
(zero coupon); Term Interest Bearing; One Year and One Day; 5, 10, 15,
20 Year; etc.
- The preferred BG type is One Year and
One Day, but virtually any type of BG is acceptable. The conversion
value (Net Cash to Client) may vary dramatically.
- Bank Guarantees are defined as those issued
by a Major Bank in Europe.
- All BG's must be in US Dollars.
- All transaction amounts must be in or
converted to US Dollars only.
- It must be fully understood, the BG is
sold outright for a "Cash Value".
- The following are some examples of 'Converting
a BG to Workable CASH':
Example
Assumes the Bank Guarantee (BG) is the One Year and One Day Type for
1.03 to 1.08 (103 to 108 percent) and issued from .................
More
information is provided in the Member Area
Recommended further reading:
Guarantees
Bank Guarantees for officially
supported exports
The mechanics of prime
bank SLCS and guarantees
Bank Guarantees (BG’s)
Funding mega dollar
projects utilizing bank guarantees (BG's) or other bank instruments
Books
on Financial Instruments
|
