A Standby Letter of Credit (SBLC) is an international banking instrument issued by a licensed bank as a financial guarantee. It ensures that if a client fails to meet a contractual or financial obligation, the issuing bank will pay the beneficiary. SBLCs operate under ICC URDG 758 and ISP98, making them one of the most trusted forms of global credit enhancement.
Only regulated banks—particularly Tier-1 institutions such as HSBC, Barclays, Standard Chartered, UBS, DBS, and other major commercial banks—are authorized to issue genuine SBLCs through the SWIFT MT760 system. Brokers or private individuals cannot issue SBLCs.
Once issued, an SBLC can be monetized or discounted by licensed banks, financial institutions, or regulated trading platforms. Monetization converts the SBLC into immediate liquidity based on a Loan-to-Value (LTV) ratio, typically between 60% and 80%, depending on the issuing bank’s strength and compliance standing. The instrument can then be deployed into structured trading programs or used as collateral for financing.
The ability to discount an SBLC depends on several key factors:
• The credit rating and tier level of the issuing bank
• Full SWIFT transmission (MT799/MT760)
• Complete KYC/AML clearance
• A valid monetization or trade agreement with the receiving bank or platform
In global finance, SBLCs serve as a powerful tool for credit enhancement, structured trading, and international project funding. At Dawn Jon Inc., we work only with verified banking partners and licensed platforms, ensuring that all SBLC-related processes remain secure, compliant, and fully aligned with international financial regulations
A Bank Guarantee (BG) is a formal financial assurance issued by a licensed bank confirming that the bank will fulfill a client’s financial obligation if the client fails to do so. It serves as a powerful risk-mitigation instrument in international finance and contract performance. BGs operate under ICC URDG 758, making them globally accepted, secure, and legally enforceable.
A BG is not a loan or a cash instrument; it is a payment guarantee that enhances the client’s financial credibility. Only regulated banks can issue BGs through official SWIFT channels, most commonly via MT760.
Usage of a Bank Guarantee (BG):
• Securing large commercial contracts, tenders, and supply agreements
• Providing assurance in international trade and project financing
• Enhancing the creditworthiness of corporations for borrowing or funding
• Acting as collateral for credit lines, loans, or structured finance arrangements
• Supporting participation in private placement or structured trading programs through monetization
A BG can be monetized by qualified banks or licensed financial institutions, allowing the holder to convert the instrument into usable liquidity at an agreed Loan-to-Value (LTV). Monetized BGs are often used in regulated structured trading programs similar to SBLC-backed strategies.
At Dawn Jon Inc., we work exclusively with Tier-1 banks, regulated platforms, and verified counterparties, ensuring that every BG process—from issuance to usage—is fully compliant, secure, and aligned with international financial standards.
A Medium Term Note (MTN) is a negotiable debt instrument issued by a corporation, financial institution, or government entity to raise capital for a fixed period, typically ranging from 1 to 10 years. MTNs are issued under an established Euro Medium Term Note (EMTN) program and traded in the global capital markets as interest-bearing securities.
Unlike SBLCs or BGs, which are guarantees, an MTN is a tradable financial asset with a defined coupon rate, maturity date, and repayment obligation. MTNs are widely used in structured finance, institutional investment, and private placement transactions due to their stability, liquidity, and international acceptance.
Usage of MTNs:
• Raising medium- to long-term financing for corporations and governments
• Supporting balance-sheet structuring and credit enhancement
• Securing institutional investment through fixed-interest returns
• Serving as collateral in structured finance transactions
• Participating in buy/sell trade programs under pre-contracted arrangements
• Leveraging MTN portfolios for credit lines, refinancing, and monetization
In the private financial market, MTNs are often used as “investment-grade instruments” that can be monetized or traded through regulated platforms and licensed desks, providing predictable yields and secure capital cycles.
At Dawn Jon Inc., we work only with verified EMTN programs, regulated custodians, and approved trading platforms, ensuring that all MTN-related processes remain compliant, transparent, and aligned with international financial-market standards.
A Standby Letter of Credit (SBLC) is a bank-issued financial guarantee ensuring payment if a client fails to meet a financial or contractual obligation.
Only licensed and regulated banks can issue SBLCs through the SWIFT system, typically via MT760.
No. An SBLC is not cash and not a loan. It is a guarantee that supports a client’s creditworthiness.
It is used for contract security, project financing, credit enhancement, collateralization, and participation in structured trading programs.
An SBLC is generally used for financial obligations, while a Bank Guarantee (BG) is more commonly used for performance, tenders, and commercial commitments. Both are governed by ICC rules.
Through the international banking network using SWIFT MT799 (pre-advice) and MT760 (issuance).
Yes. Monetizing banks or licensed financial institutions can convert the SBLC into liquidity based on an agreed Loan-to-Value (LTV), usually 60–80%.
The issuing bank’s rating, the instrument wording, compliance clearance, and the monetizer’s internal risk policies.
Normally 1 year + 1 day, unless stated otherwise in the contract.
No. Only regulated banks can issue an SBLC. Brokers or private entities cannot issue real instruments.
A valid contract, full KYC/AML documentation, bank compliance approval, and in many cases, proof of financial capability.
The issuing bank pays the beneficiary according to the terms of the SBLC.
Yes. When issued by a reputable bank and verified via SWIFT, it is a secure and globally accepted financial instrument.
Yes. Many structured finance and private placement programs use SBLCs as collateral for high-grade trading operations.
The receiving bank verifies authenticity directly through SWIFT and checks the instrument details, signatures, and bank officer confirmation.
A Bank Guarantee is a formal financial assurance issued by a licensed bank confirming it will pay the beneficiary if the client fails to fulfil a contractual or financial obligation.
Only regulated banks can issue genuine BGs through the SWIFT system, typically via MT760.
BGs are widely used in international trade, project financing, tenders, commodity contracts, credit enhancement, and as collateral in structured finance.
Both are guarantees, but an SBLC covers financial obligations, while a BG is often used for performance or contract-related security. Both are governed under ICC URDG 758.
Through the global banking network using SWIFT MT799 (pre-advice) and MT760 (issuance).
Yes. Approved banks and regulated financial institutions can discount or monetize BGs at an agreed Loan-to-Value (LTV), generally between 60–80%.
The issuing bank’s rating, wording of the instrument, compliance checks, and the monetizer’s internal policies.
Common types include Performance Guarantees, Financial Guarantees, Advance Payment Guarantees, and Bid/Tender Guarantees.
Most BGs are issued for 1 year, unless the underlying contract specifies a different validity period.
Yes. BGs are often used as collateral for credit lines, project financing, and structured trading programs.
A valid contract, full KYC/AML documentation, and the client’s financial capability approval by the issuing bank.
No. A BG is not cash and not a loan; it is a guarantee of payment or performance.
The receiving bank verifies authenticity directly through SWIFT and confirms the issuing bank’s responsibility.
No. Only licensed banks can issue BGs. Private individuals, brokers, or unlicensed entities cannot create real bank guarantees.
Yes. When issued, transmitted, and verified through proper banking channels, a BG is a secure and globally recognized financial instrument.
A Medium Term Note (MTN) is a negotiable debt instrument issued by a government, corporation, or financial institution to raise capital for a fixed period, typically between 1 to 10 years.
MTNs are similar to bonds but offer greater flexibility in issuance schedules, maturity periods, and interest structures. MTNs are issued under an EMTN (Euro Medium Term Note) program.
Governments, top-tier corporations, and regulated financial institutions issue MTNs through international capital markets.
MTNs are used for medium- to long-term capital raising, corporate financing, infrastructure projects, refinancing, and structured investment strategies.
Yes. MTNs are negotiable instruments and can be traded in the secondary market, bought, sold, or pledged as collateral.
Yes. Licensed banks, custodians, and regulated financial institutions can monetize MTNs by providing credit lines or liquidity against the instrument.
Factors include issuer rating, coupon rate, maturity, market demand, custodial verification, and compliance clearance.
No. An MTN is a debt obligation backed by the creditworthiness of the issuing entity, not a cash deposit.
Delivery is done through regulated custodial systems such as Euroclear, Clearstream, or DTC, ensuring full transparency and verification.
MTNs are debt securities, while SBLCs and BGs are guarantee instruments. MTNs pay interest; SBLCs/BGs secure performance or payment.
No. MTN trading is restricted to institutional investors, licensed intermediaries, and qualified financial entities.
MTNs issued by reputable institutions and held in regulated custodial accounts are considered secure investment-grade instruments.
Full compliance (KYC/AML), proof of funds, and approval from the issuing or selling institution.
Yes. MTNs are one of the primary instruments used in structured buy/sell trade programs.
Verification occurs through custody systems (Euroclear/Clearstream), bank-to-bank communication, and official trade confirmations.
Copyright © 2025 dawnjon.me - All Rights Reserved.
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.