BGS

DESCRIPTION OF STANDBY LETTERS OF CREDIT (SBLCS)

PRICE TBA

INSTRUMENTS: SBLCS

CURRENCY: EURO (€)/ USD

TERM: ONE YEAR AND ONE DAY

ISSUING BANK: HSBC LONDON;

SETTLEMENT BANKS: HSBC LONDON; BARCLAYS BANK LONDON:

DBS BANK SINGAPORE; CREDIT SUISSE

ZURICH

AMOUNT AVAILABLE: 100M UP TO 50B CONTRACT (ADDITIONAL CONTRACTS

AVAILABLE: CONSECUTIVE OR CONCURRENT)

PROCEDURES TO PURCHASE SBLCS

1) Buyer must have a minimum of 100M Euros/USD in an account OR AN ACTIVE CREDIT

FACILITY with a minimum of 100M Euros/USD in a top 20 bank (preferably banks located in

Western Europe; UK; Canada; USA; Singapore; Hong Kong)

2) Buyer submits the following Compliance documents:

A) Client Information Sheet (CIS)

B) Bank Confirmation Letter - The Buyer’s bank officer sends an to the provider’s bank

officer, copying in the provider Stating the following “we________Bank confirm with full bank

responsibility that our client_______is in good standing with the bank and there is a

minimum of 100m Euros/USD in the buyer’s account OR that the Buyer’s credit facility is

a) in good standing b) fully collateralized and c) that the Buyer has access to a minimum of

100M Euros/USD”.

3) Provider will verify the bank officer’s IP address – no is made with the Buyer’s bank.

(NOTE: the IP Address verification is completed within two hours of the Provider/Titleholder

receiving the bank officer e-mail.) Once the IP address is verified the Provider/Titleholder will

the Buyer immediately to arrange the delivery of the SBLCs and a contract.

4) Provider/Titleholder purchases the SBLCs (the SBLCs are available for delivery within 24-48

hours) NOTE #1 THE SBLCS WILL ALREADY BE TITLED IN THE BUYER OR

BENEFICIARY NAME AS PER PREVIOUS INSTRUCTIONS BY THE BUYER.

NOTE #2 THE BUYER DOES NOT SIGN A CONTRACT UNTIL THE SBLCS HAVE BEEN

PURCHASED.

5) Provider/Titleholder will the Buyer to confirm that the SBLCs have been purchased

and are ready for delivery and will provide the Contract to the Buyer for signature.

2

NOTE: AFTER RECEIVING CONFIRMATION FROM THE PROVIDER TITLEHOLDER

THAT THE SBLCS HAVE BEEN PURCHASED AND ARE READY FOR DELIVERY THE

BUYER CAN REQUEST A BANK-TO-BANK CONFIRMATION THAT THE SBLCS ARE

AVAILABLE FOR PURCHASE/DELIVERY THIS COMMUNICATION CAN BE IN ANY

FORM SUITABLE TO THE BUYER’S BANKER REQUEST - SEE PROCEDURES BELOW:

IMPORTANT NOTE: THE FOLLOWING PROCEDURES APPLY IF THE BUYER AND

PROVIDER ARE TRANSACTING OUT OF SEPARATE BANKS. IF THE BUYER HAS

FUNDS IN BARCLAYS BANK LONDON; HSBC LONDON; CREDIT SUISSE ZURICH; OR

DBS SINGAPORE THE TRANSACTION CAN BE COMPLETED INTERNALLY.

6) Buyer’s bank sends a MT-799 Request for Confirmation to the Provider/Titleholder’s bank

requesting an MT-799 RWA confirming that the SBLCs are in custody at the

Provider/Titleholder’s bank and available for purchase/delivery. A call or to the

Titleholder/Provider can also be requested. Please note all communications are with a senior

banker from the titleholder side and comes with absolute bank responsibility.

7) Provider/Titleholder’s bank replies with an MT-799 Confirmation SWIFT with full bank

responsibility that the SBLCs have been purchased and are in custody at the

Provider/Titleholder’s bank and ready for purchase and delivery and that upon receipt of the MT-

103 SWIFT payment the SBLCs will be delivered immediately via MT-760 SWIFT into the

Buyer’s account.

NOTE: The Buyer does not send the MT-103 payment until he receives confirmation from his

bank officer that he has confirmed bank-to-bank with full bank responsibility that the

Provider/Titleholder’s bank will deliver the SBLCs as stated in the MT-799 Confirmation

SWIFT.