Who are Providers and what are their Benefits?
To be a Provider or a Provider Group, the companies concerned have either got to be extremely cash rich or companies with big balance sheets and access to vast resources of assets. Such companies exist, trading and investing in most global financial centres and can be identified as Sovereign Wealth Funds, Hedge Funds, Private Equity Funds, Larger Family Offices and institutions holding large cash balances.
These companies are the main source of supply of Bank Guarantees for Collateral Transfer, the correct term for what is usually incorrectly referred to a Leased Bank Guarantee. Companies that need to lease a Bank Guarantee must enter into a contract with a Provider or provider Group, referred to as a Collateral Transfer Agreement.
A Collateral Transfer Agreement is a contract between the Provider and another company, referred to as the Beneficiary, where the Provider transfers a Bank Guarantee to the Beneficiary, for an agreed time period. The Beneficiary has to pay a fee to the Provider for using the Bank Guarantee, and this is known as the Collateral Transfer Fee.
In common with many major asset portfolios, there are securities, such the Long and Medium-Term Note, (LTN’s and MTN’s), that have a somewhat smaller coupon or interest rate, and other assets which are underperforming. To significantly improve the return on these assets, the Provider will collateralise these assets, and provide Bank Guarantees for Collateral Transfer, for which they will receive a substantial fee.
The reputation that IntaCapital Swiss, now enjoys as a boutique finance company that makes good on its promises to arrange access to Credit Guarantee Facilities, such as lines of credit, would not be possible without the unique and long-standing relationships they enjoy with the Providers and Provider Groups who continually supply Bank Guarantees for Collateral Transfer.