IntaCapital Swiss are specialists in Collateral Transfer Agreements, which is a contract between two companies designated the Provider and the Beneficiary, where the Provider essentially leases a Bank Guarantee, to the Beneficiary.
For more information on the Provider, please see “Who Are Providers and What Are Their Benefits from Leasing Bank Guarantees “.
Renewing Collateral Transfer Agreements, which usually have an expiry date of one year, can be rolled on for a second year, and up to maximum of seven years, with the agreement of the Provider of the Bank Guarantee, and the Lender. The Beneficiary can initially contract for a Bank Guarantee for up to seven years, so it will automatically be rolled over, whereas if the Bank Guarantee is only contracted for one year, and the Beneficiary decides they wish to rollover for a second year, they will accordingly have to issue instructions to IntaCapital Swiss at least one month in advance.
Under the Terms and Conditions of a Collateral Transfer Agreement, the costs to the Beneficiary in year one consist of the Provider’s fees, the lenders interest rate for one year,
arrangement fees, due diligence fees, booking and legal fees. When the Bank Guarantee is rolled over, the costs to the Beneficiary in year two and subsequent years, are the Provider’s fees and the annual interest rate as set by the lender.
On average the Provider’s fees are fairly consistent, where-as the lenders interest rate will depend on the prevailing one-year Euribor or one-year Libor. The fluctuations in these markets are totally independent of the lenders, and any increase in interest rates will be borne by the Beneficiary.