SBLC (MT760) / DLC (MT700)
TRADE SERVICE FINANCE
Diesel24 SA Direct (Pty) LTD can assist with any company’s international trade finance needs, by arranging documentary letters of credit to assist with corporate cash flow requirements. Our Company can open letters of credit to fulfil inventory financing needs for large and small purchase orders through our purchase order financing scheme, and to provide an enhancement to current banking arrangements.
A standby Letter of Credit is a financial document that ensures your client’s obligation to act in accordance with the terms of an agreed- upon contract. It can only be used as collateral for payment in the event of default. As a performance bond or for repayment of money borrowed or advanced. Diesel24 acts as a principle agent in Africa for financial instrument providers (collateral providers) that supply Letters of Credit to enhance the client’s trading activities. Diesel24 facilitates and manages the process of the opening of letters of credit on behalf of Diesel24 clientele, and continues the ongoing management of the letter of credit process throughout the period for which a transaction may occur. As a leading provider of alternative global trade solutions, we can help you optimize your cash flow and simplify the trade process, this helping you facilitate your import business effectively and strengthening the way you do business globally. Diesel24 uses the services of several UK, American & European banks, because of the company’s firm banking relationships; it is positioned to provide flexible and expedited
services to its clientele. Due to the flexibility of the company, a specific collateral deposit is not required, and Diesel24 does not necessarily become a creditor to its client companies.
Diesel24d provides an alternative to the banking or lending facilities, which may be currently provided by other institutions.
The services offered have facilitated excellent relationships between Diesel24 clients and their overseas suppliers, thus allowing the growth of certain business segments which companies would otherwise not have the ability to pursue. When Diesel24 issues an Import Letter of Credit for your account, as per the agreed draft format, which you confirm with your supplier, you get the highest level of support and assurance that your goods will be shipped as you intended before you pay. Back your obligations to your business partners with a Standby Letter of Credit issued by our international platform. Whether your company conducts business domestically or globally, a Standby Letter of Credit can help to optimize your cash flow, improve your credit position, and allow you to take advantage of opportunities that otherwise might be out of reach.
LETTER OF CREDIT FACILITIES
An understanding of How to Begin Our services provide an excellent support for importers and import distributors for the following reasons: Diesel24 supplements current facilities.
Diesel24 does NOT become an additional creditor to your current lender(s). We will work with your Lender to effect successful import transactions.Diesel24 offers cost effective alternatives to your current trade finance availability from your lender.All Letters of Credit comply strictly to UCP 600 (current edition). A “draft” of each Letter of Credit is provided to our clients for final approval prior to all Letter of Credit transactions.The staff at Diesel24 manages the entire Letter of Credit Process on behalf of the client. How to start: The easiest transition for a new client, is to open a single Letter of Credit to a current supplier. In so doing, a new client can use the experience to critique the process, and build on it.
To enrol please contact one of the Diesel24 staff. Understanding the Basics Letters of Credit: The Basics Definition: A documentary credit is a (conditional) bank undertaking of payment. It is a written undertaking by a bank (issuing bank) giving to the seller (beneficiary) at the request, and on the instructions of the buyer (applicant) to pay at sight or at a determinable future date up to a stated sum of money, within a prescribed time limit and against stipulated documents or other conditions. The issuing bank is putting out its credit and good name for the sake of
the buyer. Buyer: Because the documentary credit is a conditional undertaking, payment is made on behalf of the buyer against documents, which may represent the goods and give the buyer rights to them. Seller: Because the documentary credit is a bank undertaking, the seller can look to the bank for payment, instead of relying upon the ability or willingness of the buyer to pay. However, because the undertaking is conditional, the seller only has the right to demand payment if he meets all the requirements of the credit. It is, therefore, unwise for the seller
to proceed with shipment until he is aware of these requirements and is satisfied he can meet them. Summary: Documentary credits therefore: Are arrangements by banks for settling international commercial transactions. Provide a form of security for the parties involved. Ensure payment, provided that the terms and conditions of the Letter of Credit have been fulfilled.
Men that payment by such means is based on documents only, and not on merchandise or supplements current facilities. Diesel24 does NOT become an additional creditor to your current
lender(s). We will work with your Lender to effect successful import transactions. Diesel24 offers cost effective alternatives to your current trade finance availability from your lender.
All Letters of Credit comply strictly to UCP 600 (current edition). A “draft” of each Letter of Credit is provided to our clients for final approval prior to all
Letter of Credit transactions.
The staff at Diesel24 manages the entire Letter of Credit Process on behalf of the client. How to start: The easiest transition for a new client, is to open a single Letter of Credit to a current supplier. In so doing, a new client can use the experience to critique the process, and build on it. To enrol please contact one of the Diesel24 staff. Understanding the Basics Letters of Credit: The Basics Definition: A documentary credit is a (conditional) bank undertaking of payment. It is a written undertaking by a bank (issuing bank) giving to the seller (beneficiary) at the request, and on he instructions of the buyer (applicant) to pay at sight or at a determinable future date up to a stated sum of money, within a prescribed time limit and against stipulated documents or other conditions. The issuing bank is putting out its credit and good name for the sake of the buyer. Buyer: Because the documentary credit is a conditional undertaking, payment is made on behalf of the buyer against documents, which may represent the goods and give the buyer rights to them. Seller:
Because the documentary credit is a bank undertaking, the seller can look to the bank for payment, instead of relying upon the ability or willingness of the buyer to pay.
However, because the undertaking is conditional, the seller only has the right to demand payment if he meets all the requirements of the credit. It is, therefore, unwise for the seller to proceed with shipment until he is aware of these requirements and is satisfied he can meet them. Summary: Documentary credits therefore: Are arrangements by banks for settling international commercial transactions. Provide a form of security for the parties involved. Ensure payment, provided that the terms and conditions of the Letter of Credit have been
fulfilled. Men that payment by such means is based on documents only, and not on merchandise or services involved.
SERVICES If you are trading on an international level, you’re aware of the risks involved with your transactions. Diesel24 offers many solutions with include Import & Export Letters of Credit, Standby Letters of Credit, Bank Guarantees and Performance Bond. An Import Letter of Credit ensures your credit worthiness to a foreign buyer. Your supplier receives a level of transaction protection that may result in a more favourable purchase price to you. Diesel24 Limited issues these letters for your account, verifies that your supplier’s documents are in compliance with the Letter of Credit, and allows you time to ensure that your suppliers have performed so that you allocate your funds appropriately for the shipment for payment to the supplier directly, where after the issuing Bank pays your supplier. Diesel24 role is to establish relationships with all clients requiring credit enhancements, providing all consultation to the clients and finally making representative to our collateral providers. The business success attributed to maintaining the required standards of services, experienced management, structured logical solutions and foremost as a rule-service delivery on time. When in doubt, consult one of our experienced Diesel24 trade finance representatives who will help you structure your international trade transactions to minimise risk and cost. Let us help you select what’s most appropriate for your international and domestic trade needs.
TRADE FINANCING: TERMS AND PRICES
STANDARD COMMERCE BANK, DOMINICA, BIC: STDMDMDM
INSTRUMENTS
MT700 - 90 / 180 / 365 - days validity LC at Sight / or / with usance terms
Shipment mode: All modes of shipment
Size: Single LC for up to 900M
MT760 - 90 / 180 / 365 - day SBLC / BG
Size: Single instrument up to 900M
MT799 or MT 998/999 - RWA – With / without amount stated
Size: Single instrument up to 900M
MT799 or MT 998/999 - POF / Blocked Funds/BCL
GENERAL GUIDELINES
Minimum issuance fee: USD 12,500.00
Can do specific custom verbiage for LC and SBLC / BG
PRICES
90 days LC at sight: 2.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days LC at sight: 3.25% (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days LC at sight: 3.75% (plus USD 750 processing fees and USD 900 unutilized commission fees)
90 days Usance LC: 2.75% (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days Usance LC: 3.25% (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days Usance LC: 4% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 90 day SBLC / BG: 2.75% (plus USD 750 processing fees)
§ 180 day SBLC / BG: 3.25% (plus USD 750 processing fees)
§ 365 - day SBLC / BG: 4% (plus USD 750 processing fees)
§ RWA with amount stated: 1.25%
§ RWA without amount stated: USD 12.5K
POF/ Blocked Funds/BCL: FROM MINIMUM OF USD 10K TO 0.15% FOR UP TO 5M AND THEN 0.1% FOR UP TO 50M AND 0.05% FOR UP TO 900M
BANK WINTER, AUSTRIA, BIC: WISMATWW
INSTRUMENTS
MT700 - 90 / 180 / 365 - days validity LC at Sight / or / with usance terms
Shipment mode: All modes of shipment
Size: Single LC for up to 5M
MT760 - 365 days SBLC / BG
Size: Single SBLC / BG for up to 5M
MT799 or MT 998/999 - RWA – With / without amount stated
GENERAL GUIDELINES
Minimum issuance fee: USD 12,500.00
Cannot do specific custom changes for SBLC / BG verbiage
Can do minor edits in LC verbiage
Indemnity agreement of SUBCON should be signed by the company appearing as "buyer" in the instrument
PRICES
90 days LC at sight: 4.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days LC at sight: 6.5% (0.7% FOR EACH 30 DAYS) (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days LC at sight: 9.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
90 days Usance LC: 4.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days Usance LC: 7.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days Usance LC: 9.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 365 - day SBLC / BG: 7% (plus USD 750 processing fees)
§ RWA with amount stated: 1.75%
§ RWA without amount stated: USD 16K
US BANKS
NEW YORK COMMUNITY BANK, BIC: ABNYUS33
VALLEY NATIONAL BANK, BIC: MBNYUS33XXX
INSTRUMENTS
· MT700 - 90 / 180 - day validity LC at Sight
GENERAL GUIDELINES
· Minimum issuance fee: USD 12,500.00
· Subject to line availability;
· Consumer goods only;
· Buyer must be a US company (for domestic US clients);
· Port of discharge must be in the US;
· Limit is under $1M.
PRICES
· 90 days LC at sight: 3.75% (plus USD 750 processing fees and USD 900 unutilized commission fees)
· 180 days LC at sight: 5.75% (plus USD 750 processing fees and USD 900 unutilized commission fees)
IDB, NEW YORK, BIC: IDBYUS33
INSTRUMENTS
MT700 - 90 / 180 - day validity LC at Sight
GENERAL GUIDELINES
Minimum issuance fee: USD 12,500.00
Subject to line availability
Shipment mode: Ocean shipment only
No US banks as advising banks (preferable)
No oil, gold, precious stones
No risky jurisdiction
PRICES
90 days LC at sight: 3.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days LC at sight: 4.5% (0.5% FOR EACH 30 DAYS) (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days LC at sight: 6.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
ASIA PACIFIC INVESTMENT BANK, MALAYSIA, BIC: ASPMMYKL
INSTRUMENTS
o MT700 - 90 / 180 / 365 - day validity LC at Sight / or / with usance terms
§ Shipment mode: All modes of shipment
§ Size: Single LC for up to 100M
o MT760 - 90 / 180 / 365 - day SBLC / BG
§ Size: Single instrument up to 100M
o MT799 or MT 998/999 - RWA – With / without amount stated
§ Size: Single instrument up to 100M
o MT799 or MT 998/999 - POF / Blocked Funds
GENERAL GUIDELINES
§ Minimum issuance fee: USD 13,500.00
§ Can do specific custom verbiage for LC and SBLC / BG
PRICES
90 days LC at sight: 4.5 % (plus USD 750 processing fees and USD 900 unutilized commission fees)
180 days LC at sight: 5.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
365 days LC at sight: 7% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 90 days Usance LC: 4.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 180 days Usance LC: 5.5% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 365 days Usance LC: 7% (plus USD 750 processing fees and USD 900 unutilized commission fees)
§ 90 day SBLC / BG: 4.5% (plus USD 750 processing fees)
§ 180 day SBLC / BG: 4.5% (plus USD 750 processing fees)
§ 365 - day SBLC / BG: 4.5% (plus USD 750 processing fees)
§ RWA with amount stated: 1.75%
§ RWA without amount stated: USD 16K
§ POF/ Blocked Funds/BCL: 0.15%
HK BANKS
INSTRUMENTS
STANDARD CHARTERED BANK HK
HSBC HK
OCBC HK
Are offered as follows:
MT700 - 90 - day validity LC at Sight
Shipment mode: Ocean shipment only
Size: Single LC for up to 1M
DBS HK
DAH SING BANK HK
Are offered as follows:
MT700 - 90 - day validity LC at Sight
Shipment mode: Ocean shipment only
Size: Single LC for up to 1.5M - we can push for 2M if line is available
MT700 - 90 - day validity LC + 90 days usance terms:
Shipment mode: Ocean shipment only
Size: Single LC for up to 1.5M - we can push for 2M if line is available
GENERAL GUIDELINES
Subject to line availability
No US banks as advising banks
No oil, gold, precious stones
No risky jurisdiction
No more than 2-3 countries involved (export country, import country, buyer country - no more)
Minimum issuance fee: USD 5,500.00
PRICES
90 days LC at sight: 6%
90 days Usance LC: 11% (for 90 days usance terms + 90 days validity)
PROCESS
Our process is as follows:
(1) Client remits pro-forma invoice pertaining to the forthcoming transaction and/ or completed application to Subcontracts India
(2) Subcontracts India (“SUBCON”) sends a draft, agreement, and opening fees invoice for the client's review
(3) Client signs the draft, agreement, and wires opening fees as per the issued invoice
(4) SUBCON releases instrument to Bank for issuance
(5) Assuming no questions, Bank issues SWIFT within 24-72 hours
(6) SUBCON emails a copy of SWIFT to the client thus completing the transaction
REQUIRED DOCUMENTS FOR ISSUANCE
The required documents for issuance are as follows
(For Bank Winter and to some extent for IDB there are additional DD requirements.
Additional DD requirements will be covered on a deal-by-deal basis):
· FROM THE CLIENT:
o Certificate of incorporation
o List of shareholders / directors
o Passport copy of a listed director
o Signed draft
o Document confirming the underlying transaction: contract, pro-forma invoice
· FROM THE PAYING PARTY:
o Certificate of incorporation
o List of shareholders / directors
o Passport copy of a listed director
o Signed indemnity agreement
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