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DEFERRED PAYMENT GUARANTEES

Deferred acquisition of bank instruments (BG’s/SBLC’s)

The Instruments


Deferred acquisition of bank instruments (BG’s/SBLC’s/US treasury bills/Euro bonds) at a premium 113% of face value +2% commission.

  • Delivery however will be executed at 13%+2% initial payment.

  • You and your bank have full effective ownership of the instrument for 350 days, before paying the final balance of 100% or returning the Instrument.

  • On day 350 the balance becomes due and is to be paid and the purchase is complete or Instrument returned.


In the event that the final instalment is not paid on day 350 your bank must undertake to return the instrument free clean and unencumbered on day 350.


The down payment instalment is forfeit.


Minimum transaction is $15.1 Mn which covers Bank SWIFT fees


Client Returns


Clients can expect a substantial return over 50 weeks


Procedures


  • After contract signing you are to fund an escrow account to cover provider’s costs in the transaction. (55K up to amounts of 100M face value and per 100M). These funds will be refunded after the 15% is received Once your application and this document are received signed and Due Diligence is positive, the next event will be signing of a fee agreement for the 2%. 

  • Sell side is closed and my team is the first on buy side with 0.5%, so 0.5% is open.

  • Provider will accept a mark up on commissions if this is your wish.

  • Once the fee agreement is signed the contract will be issued.


Structure and Procedures


  1. JV Agreement & Profit Sharing Agreement between BSG, AWI & Client agreeing to a 30/5/65 split of all returns 30% AWI, 5% BSG & 65% Client. Allowances of 1.5% must be made for secondary brokers

  2. Loan Agreement in place between Client & AWI for accounting purposes and to illustrate that AWI has the money on its balance sheet.

  3. Escrow Agreement - We arrange an escrow with a credible Escrow Agent (i.e bank or law firm) like Bentley Legal (offices in UK & AUS) and transfer approximately €/$15.1m to the escrow agents account for Proof of Funds

  4. AWI will then submit the application with POF to the compliance officer (who deals with both the Issuing House and Trade platform) for approval. If the trader supports the transaction we will commence to purchase the SBLC.

  5. AWI will receive a Trade Agreement from Trading bank which will be made available for BSG & Client at AWI offices to view.

  6. AWI will enter into the trade agreement with the Trader and once this process is completed the Escrow Agent will release the initial $55K to the issuing bank and the Traders bank and the Issuing House bank will start the bank-to-bank process to receive the SLBC.

  7. Once the SBLC is received and verified by the Trader, the escrow agent will release the remaining $15Mn funds to the Issuing House.

  8. AWI will immediately arrange an advance payment from the Trader for min of 1 week’s trade returns equal to 25% of issued SBLC to be paid to the escrow agent. The Escrow Agent will release the advance payment funds as per JV Agreement to beneficiaries (parties to the JV Agreement) and for accounting purposes the loan is then settled.

  9. Trade commences 15 days after the SBLC is received by the trading bank and the advance is given.

  10. First week (after 15 day window) will settle our advance and from the second week our profits start rolling in.


Escrow Agreement


  1. The terms of the escrow will be quite simple: to only release funds to the Issuing House once the SBLC has been received and verified.

  2. If we are using the same escrow agent to receive profits, then the agent will also execute the terms of the PSA.