BG/SBLC LEASE 12+3

Term	Explanation
Receiving Account Holder	The Account Holder is the company or the physical person holding the Receiving Bank Account where the Instrument will be assigned. It can be the Borrower himself or a third party. If the Account Holder is not the Borrower, he must sign, together with the Borrower, GMSLA and the other documents concerning transaction.
Amendment (to the G.M.S.L.A.)	The Amendment is an agreement where Lender and the Borrower agrees to make changes to the Lending Agreement. An amendment can be done for several reason: change of the Borrower name, change of the Account Holder, change of the Receiving Bank, extension of the call option etc. Amendment must be in respect of the Procedure, that cannot be changed. All amendments issued for GMSLA are integral part of original Lending Agreement.
Assignee	The Assignee is the beneficiary of the Assignment of the Instrument.
Assignment by MT760	The Instrument is assigned through a Swift MT760 from a Primary Bank. The Borrower (and the Account Holder) can see our standard verbiage on the Guidelines where are reported verbiage for assignment of Bond/MTN, BG or SBLC.
Assignor	The Assignor is the entity who will cause the Assignment to the Assignee thought Swift MT 760 message.
Bank Guarantee	A Bank Guarantee is a lending institution’s promise to cover a loss if a borrower defaults on a loan. The guarantee lets a company buy what it otherwise could not, helping business growth and promoting entrepreneurial activity. Bank Guarantee can be used as international form of payment or as financial instrument to enhance the credit ratings of the Assignee. In this case the Bank Guarantee is used as collateral to guarantee a credit facility to the Assignee and finance its projects.
Bank Officer	The Bank Officer is the designated person in the position to follow all the aspects of the Lending and Borrowing of Bank Instrument Transaction. The Borrower (or the Account Holder) must give requested details of the Bank Officer in order to allow Lender to carry out properly the Due Diligence.
Bloomberg	Bloomberg is an international platform where all information about Finance, Markets and News are transacted in real time. In this kind of platform, Traders can contact buyer or seller and set real-time trading with legal value with sellers or buyers.
Bond/MTN	A bank guarantee is a lending institution’s promise to cover a loss if a borrower defaults on a loan. The guarantee lets a company buy what it otherwise could not, helping business growth and promoting entrepreneurial activity. A medium term note (MTN) is a note that usually matures in five to 10 years. A corporate MTN can be continuously offered by a company to investors through a dealer with investors being able to choose from differing maturities, ranging from nine months to 30 years, though most MTNs range in maturity from one to 10 years. Every month the Lender select Bond and MTN that can be available in the Markets for Lending and Borrowing transaction.
Borrower	The Borrower is the company or the physical person who get the loaned instrument for a predefined period. He will not be the owner, but just the Assignee. He must return the loaned instrument at the end of the lending period, or extend lending period for up to 5 years, paying the service fee yearly, fifteen days before the maturity date.
Call Option	The Call Option is an option placed in the electronic markets or OTC (Over The Counter) where one of the party purchase the option to buy (or not buy) the instrument at certain date and certain price. The other party, owner of the Instrument, will commit himself to sell the Instrument if the other party will execute the Call Option. In GMSLA transaction, as Lender at that step is not the owner of Bank Instrument the Borrower wants to borrow, must arrange for Call Option with the instrument's owner to reserve the right to buy the instrument after the Borrower performed his duty as per the Lending Agreement.
Call Option Fees	The Call Option Fees are the expenses to purchase the Call Option to the instrument's owner. The Borrower will get an invoice to cover said expenses (attached to GMSLA). Funds must be sent in advance, because if the instrument is available, the Call Option Fees must be paid immediately.
Certified Email	Certified Email is a dedicated system working on the side of the Email System to guarantee, thought cryptographic signatures, the reception of the recipient of the email, when the recipient opened the email or not.
Compliance Department	The Compliance Department is responsible of the Regulatory compliance, that describes the goal that organisations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, polices, and regulations. Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources. Each bank has a compliance department, as the Lender has its own Compliance Officer working to maintain all the Transaction "in fully compliance"""" with the international banking laws."""
Conditional Payment	The Lender allows four methods to pay the Service Fees: ICPO, Conditional MT103 and MT700. All these payments are "conditional"""" because the Receiving Bank will confirm such payment on the Due Diligence, but will release it ONLY upon reception, verification and acceptance of the MT760."""
Custodian Bank	Custodian banks are often referred to as global custodians if they safe keep assets for their clients in multiple jurisdictions around the world, using their own local branches or other local custodian banks ("sub-custodian"""" or """"agent banks"""") with which they contract to be in their """"global network"""" in each market to hold accounts for their respective clients. Assets held in such a manner are typically owned by larger institutional firms with a considerable amount of investments such as banks, insurance companies, mutual funds, hedge funds and pension funds."""
Customer Service	The Customer Service is the interface between the Lender, Brokers and Borrowers. Most of communication are from Borrowers/Brokers and Customer Service. It has capability to escalate any question to the Compliance or to the Legal Department. It is open from Monday to Friday, Europe office time. All communications are by email.
Designated Paying Bank	The Designated Paying Bank is the bank responsible for payment of the Service Fees. Most of the time it is the same as Receiving Bank, but sometimes Receiving Bank and Paying Bank can be different,
Designated Receiving Bank	The Designated Receiving Bank is the Borrower's or Account Holder's Bank designated to receive the Instrument by MT760. That bank must be aware of the Transaction's Terms and Conditions and must reply to the Due Diligence.
Due Diligence	Due Diligence is the process by which Lender, contacting Receiving Bank, enquiry about their knowledge and awareness of the Transaction, confirmation/acceptance of the terms about use of the financial instrument and (if applicable) the bank's commitment to return the financial instrument before maturity date. It is carried out by the Lender's Compliance Officer by Certified Email.
Engagement of the Bank to return the Instrument	If there are not performance bond issued to cover the financial instrument non-return risk, the Receiving Bank must confirm in full bank responsibility their engagement to return the Instrument 15 days before maturity date.
Extension of Call Option	Call Option can be extended for 30-days more. Borrower must ask to Lender for the Amendment with relative invoice and execute the payment before the expiration date of the Call Option.
ICPO	ICPO (Irrevocable Conditional Pay Order) is one of the four method allowed for Service Fees payment. It must be done on company's letterhead and endorsed by two bank officer from an first class bank accepted by Lender. A draft copy with accepted verbiage is in the Guidelines, in the GMSLA and Corporate Pro Forma Invoice (issued and sent after Call Option).
Investors	Investors is a group formed by Licensed Institutions, Hedge Funds, Private Investors, Liquidity Managers which are using Lender as SPV (Special Purpose Vehicle) to increase their ROI on cash management. GMSLA allow investors to receive part of Service Fees as return of their investments.
Lender	The Lender is the entity between Investors and Borrowers. It is responsible to negotiate conditions and verify all terms and conditions of the Transaction, ensuring the Investors with the return of their investments.
Lending Agreement (GMSLA)	The Lending Agreement is the agreement between the Lender, the Borrower..
Lending and Borrowing of Bank Instruments	The Lending and Borrowing of Bank Instruments is the Transaction where one of the party, called Lender, lend to the other party, called Borrower, a Bank Instrument. Said Bank Instrument is assigned by MT760 in name of the Borrower, but the ownership remains of the Lender. The Borrower can use said Bank Instrument for credit enhancement purposes and has obligation to return the Bank Instrument prior the maturity date.
Lending Manager	The Lending Manager is the company responsible to manage all technical operations to place the call option, relative extensions and it is supervisor of the whole Transaction.
MT 700	MT 700 is the Swift message for documentary credit (Letter of Credit). In modern business practice, a letter of credit is a written undertaking from a bank to pay a beneficiary against the delivery of a specified set of documents specified by the issuer.
Paying Bank	see Designated Paying Bank
Performance Bond	A good numbers of Borrowers are encountering difficulties to let their Receiving Bank get engaged to return the Bank Instrument before the Maturity Date. For this purpose, the Lender has an agreement with a specialized company that is able to issue a Performance Bond to cover the facial value of the loaned instrument. If the Borrower cause the issuing of a Performance Bond that cover the risk of default of the Borrower to return the Bank Instrument, the Lender will not require from the Receiving Bank the engagement to return the Bank Instrument.
Pre-advice by swift	Pre-advice is a message (sent by Swift MT998/798 from an advising bank) to the Receiving Bank advising that a Bank Instrument will be assigned to the Borrower according Terms and Conditions of the GMSLA. The Receiving Bank must reply confirming the queries contained in the Pre-advice, confirming their RWA to receive the Bank Instrument and their confirmation to be fully aware of conditions and terms about use of the assigned Instrument.
Pre-advice by Certified Email	Pre-advice by Certified Email is issued by the Lender's Compliance Department to the Receiving Bank advising that a Bank Instrument will be assigned to the Borrower according Terms and Conditions of the GMSLA. The Receiving Bank must reply confirming the queries contained in the Pre-advice, confirming their RWA to receive the Bank Instrument and their confirmation to be fully aware of conditions and terms about use of the assigned Instrument. Certified e-mail is sent using a special encryption signature that certify reception of the Pre-advice and Proof of Read with a timestamp not possible to change.
Preadvice by MT799	Since July 2016 SWIFT modified standards of MT799. Since the said data, for message with more than 2,000 characters it will be used MT798 (Digital Envelop)
Private Investor	Company or Individual that use excess of liquidity to have a financial return.
Project Financing	Project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights and interests held as secondary security or collateral. Project finance is especially attractive to the private sector because companies can fund major projects off balance sheet.
Promissory Note	The Lender allows to pay the Service Fees by promissory note which is a NON-CONDITIONAL payment. Sometimes referred to as a note payable, is a legal instrument (more particularly, a financial instrument, and more specifically a debt instrument), in which one party (the maker or issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. It is a NON-CONDITIONAL payment but being maturity at 180 days it gives the opportunity to the Borrower to delete it in case of Lender's Default in assigning the Instrument.
Receiving Bank	see Designated Receiving Bank
Return of the Bank Instrument	The Return of the Bank Instrument is the obligation that the Receiving Bank takes with the Lender during Due Diligence or Pre-advice. The Receiving Bank must return the Bank Instrument 15 days before maturity date, free, clean, clear and unencumbered.
SBLC	see Stand-By Letter of Credit
Service Fees	Service Fees are the fees charged by the Lender to the Borrower to lend the Bank Instrument for one year.
Special Purpose Vehicle (SPV)	It is a company created with a detailed purpose. In our case, the Lender is a company created and structured with the Special Purpose to provide to the Investor a safe and reliable structure to invest excess of liquidity and get a Return of their Investment through the lending of Bank Instruments.
Stand-By Letter of Credit	A SBLC (Stand by Letter of Credit) is a document issued by a bank, guaranteeing payment on behalf of a client. This is used as a “payment of last resort” if the client fails to fulfil a contractual commitment with a third party. In all reality, the SBLC is just a piece of paper with a “value” backed by the good credit of the bank, allowing clients use a “conditional collateral” if needed.
Swift Code (BIC)	The BIC is used for addressing messages, routing business transactions and identifying business parties. SWIFT in its role of ISO registration authority issues BICs to financial and non-financial institutions. The BIC is used in financial transactions, client and counterparty databases, compliance documents and many others.
Swift MT 700	see MT 700