Available Facilities

Project finance collateral transfer

Collateral Transfer is a dynamic way of raising high-level capital to finance commercial enterprises and specific projects.

Bank Guarantees

Bank Guarantees received under Collateral Transfer Facilities may be used by large corporations to secure lines of credit.

Raising Lines of Credit

Raising Lines of Credit can assist companies when the need arises to meet working capital needs or to take advantage of investment opportunities.

Monetisation of Germstone

With our broad client base and global network of contacts, Novex Global Capital is in a distinctive position to support individuals seeking to purchase, sell, or leverage gemstones and precious metals.

Credit Lines & Monetisation

A Line of Credit is a pre-set amount of borrowing which can be used at any time. A Line of Credit can be secured by a collateral asset of the business, creating a secure Line of Credit.

Instrument for Monetisation

Bank Instrument Monetisation is a low-risk method of trade finance that monetises inactive financial instruments by converting them into cash or cash equivalent by liquidating the instruments or raising Lines of Credit against their undertaking.

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What is Collateral Transfer?

Collateral Transfer refers to the transfer of assets from one party to another, typically done through the issuance of a Bank Guarantee. This transaction occurs when the Provider commits to providing the Bank Guarantee to the recipient in exchange for a fee, known as a Contract Fee. Both parties must mutually consent to a Collateral Transfer Agreement, which outlines the conditions and terms of the Guarantee.

"Leasing" a Bank Guarantee

"Leasing" a Bank Guarantee is a common phrase associated with Collateral Transfer. However, the use of the word 'lease' is a misnomer. Since it is not possible to physically 'lease" a Bank Guarantee, we use the term loosely as its structure resembles that of a commercial lease. However, these arrangements should be correctly referred to as Collateral Transfer Facilities as effectively no leasing takes place.

A Bank Guarantee is issued specifically for the purpose to the Beneficiary and each contract is bespoke. A Bank Guarantee cannot be transferable, purchased or sold. A Collateral Transfer facility is granted from a Provider, using their own assets to raise a specific Bank Guarantee through their issuing bank for the sole use of the specified beneficiary, for the specified term. It is effectively a form of Securities Lending and often a derivative of re-hypothecation. There is no reference to 'leasing' when receiving a Bank Guarantee in this fashion.

The Guarantee is supplied by the issuing bank of the Provider to the Beneficiary's account at the Beneficiary bank and is transmitted inter-bank via the appropriate SWIFT platform (MT760 in the case of Guarantees). During the term of the Guarantee, the Beneficiary may utilise it for their own purposes which may include security for loans, Credit Lines or for trading purposes. At the end of the term, the Beneficiary agrees to extinguish any encumbrance against the Guarantee and allow it to lapse (or return it) prior to expiry and indemnify the Provider against any loss incurred by default of loans secured upon it.

Who provides Collateral Transfer?

A Provider will often be a collateral management firm, a hedge fund or private equity company. Effectively, the Guarantee is 'leased' to the Beneficiary as a form of investment since the Provider receives a return on his commitment, hence the misnomer of the term 'leasing'.

Over recent years, these facilities have become more popular since they enable the Beneficiary to have access to substantial credit facilities by using the Guarantee as loan security. Since the Guarantee is effectively imported to the account of the Beneficiary, the underwriting criteria is considerably less than that of conventional lending.