Once the SBLC has been monetized and the funds wired to us from the bank, the project then goes through our usual intake process. The funds from their bank becomes the "proof of funds" for the project and we process their application to receive a loan from us. Once the project has been accepted for funding, we would go through the Term Sheet and then contract process - once complete, financing of the project can commence.

If accepted, since we would be financing 100% of the project, and the borrower/client has no money of their own in the game, we will always take an equity position in the project. That position could range between 20% and 40%, depending on the risk profile of the deal, and the actual number will only be discussed once we confirm that we have a way to monetize the SBLC for the client. The interest rate of the loan will be dependent on the bank's monetization parameters. If the monetization involves Mynizaga taking a credit line (which will have an interest rate that we pay for), then the portion of capital being sent to the client for the project will be charged AT THAT SAME INTEREST RATE. If Option 1 is used, where it is Non-Recourse Payout SBLC, and Mynizaga does NOT end up owing the bank interest, we would loan to the project at 3.5% (our normal rate).

The other fees from our regular loan programs also apply - a 3% Lending Fee (due upon close, and drawn from the loan funds themselves), the closing costs of the loan, and the monthly cost of the loan caretaker. No fees are due to be paid until AFTER the project is receiving funding from us.

The application process will be the same as on our page "Multiples Lending Program" under the heading "Applying". The only difference here will be that there is no requirement for a Proof of Funds, as the funding will already be provided by your banking institution through the monetization of the SBLC.

What Else Will Your Bank Need to Know?

Certain departments of banks are used to the SBLC processes, but typically they deal with existing instruments. As a result, they almost always ask you for the "SBLC Verbiage". However, the way we have structured this program is that our instruments are all "new issues" - they will be created by our Tier 1 bank specifically for this transaction. As a result, we will create a new SBLC that can have any verbiage the receiving bank desires. While the SBLC verbiage must always conform to ICC600 standard (International Banking Standard, which these bankers should inherently understand), we can tailor the SBLC to have any wording they like. In fact, we typically tell them, "Give us your preferred verbiage, that will yield the BEST LTV that we can receive, and that is what it will have."

How to Proceed

There are specific "non-solicitation" rules in banking and as a result our banker cannot initiate contact with the receiving banker - this must be done by the banker whose bank will receive the instrument. So, we will require the borrowing group's banker to send the borrower/client an email that they will forward to us to provide our bankers. This is to be sent by the banker to the client because they are already dealing with the client in banking, so this is simply confirming their ability to work with the SBLC to their existing client. This email will have to include:

1. RWA Paragraph. This paragraph will state that the receiving bank is "Ready Willing and Able" to receive a SBLC from HSBC or Barclays for that has the face value of the transaction to be considered. This paragraph will generally be "based on the following conditions" (i.e., receiving sufficient CIS information from us to pass their due diligence protocols) and show the size of the instrument they want to receive and the expected LTV.
   
2. Banker's Business Card. This will identify the banker, the bank, and include their contact details such as email and phone numbers.
   
3. Sample SBLC Verbiage. Since we can customize the wording of the instrument to suit anything the receiving bank requires, we would like them to provide us with the verbiage that they prefer.
   
4. Confirmation if it will be a non-recourse payout, or a recourse line of credit. If it is a recourse line of credit, they will need to include the proposed term (length of time available) and the interest rate.
   
5. Confirmation that the bank will cover our SBLC issuance costs if they fail to perform for reasons other than compliance issues once they have requested issuance of the SBLC via SWIFT MT799.

Example

For example (the example below would be for a recourse line of credit (Option 2 above)):

"Dear Mrs. Jane Doe [client name],

Further to our conversation on the subject, I note that [bank name] is ready, willing, and able to receive a clean, new issue SBLC from [HSBC UK/ HSBC NY / Barclays UK] of up to $500M USD [or appropriate amount]. It would be possible to set up a Line of Credit upon receipt and confirmation of this instrument at an LTV of 85%, contingent upon satisfying our underwriting and compliance requirements, as well as any other condition precedent deemed relevant for [bank name], for a transaction of this nature. Following this, we would expect the process to begin with a MT799, followed by a MT760. Generally speaking, once an SBLC is received in line with established conditions precedents, credit facilities would be perfected and made available to the subject borrower for draws as agreed within a subject credit agreement within 5 business days [or bank's appropriate timeline].

Again upon condition of satisfying all compliance requirements, this would be a repayable/recourse Line of Credit with a term of 12-36 months, and at an interest rate to be determined after [bank name]’s internal evaluation and adjudication. Any other Line of credit terms to be determined by underwriting. The SBLC would be returned to the issuing bank upon full settlement of the line of credit.

[Bank Name] will also confirm within the final contract that upon ordering the issuance of the SBLC, that we will guarantee with full bank responsibility, that the cost for the issuance of the SBLC will be fully covered by [Bank Name] in the event that [Bank Name] backs out of the deal or fails to perform after the SBLC has been requested. That cost would not exceed 2% of face value.

Attached is our preferred SBLC verbiage. Below is my contact information, as I will be handling this transaction on behalf of [bank name].

Thanks,

[banker name]

[banker email]

[banker phone contact numbers]

[if possible, banker's bank address]"

With that email forwarded to us, we can provide it to our banking team who will reach out to the banker and begin the process of setting up the transaction.