IntaCapital Swiss, are well known for providing Collateral Transfers, and are able to renew Collateral Transfer Agreements for those companies seeking to access loans and lines of credit, known as Credit Guarantee Facilities. A Collateral Transfer Agreement is where one company, alluded to as the Provider, leases a Bank Guarantee, (See What Is a Leased Bank Guarantee), to another company, alluded to as the Beneficiary.

For in depth analysis on the Provider, please go to “Who Are Providers And What Are Their Benefits From Leasing Bank Guarantees”.

A Collateral Transfer Agreement, is usually for contracted for a length of one year. If the Beneficiary, decides to renew the agreement for another year, they should inform IntaCapital Swiss immediately, or not less than one month before the expiry of the Bank Guarantee, (See What Is a Bank Guarantee), allowing them time to get the agreements of both the Lender and the Provider.

A Collateral Transfer Agreement can also have an expiry date of up to seven years, and providing the all Terms and Conditions contained within the agreement have been met, the Collateral Transfer Agreement will automatically renew for another year.

Costs for entering into a Collateral Transfer Agreement are always for the Beneficiary’s account, and these comprise of, one year’s cost of borrowing, the Provider’s fees, booking fees, due diligence fees, arrangement and legal fees. In subsequent years, the costs to the Beneficiary will just be the cost of borrowing for one year and the Provider’s fees.

It is interesting to note that more often than not the Provider’s fees remain roughly the same, but market forces impacting on 12-month Euribor and 12-monthe Libor, may increase the cost of borrowing at the time of renewal. In this event, all costs will be borne by the Beneficiary.