Asset/Credit Enhancement

‌Asset/Credit Enhancement‌

Asset & Credit Enhancement comes in a variety of forms, simply stated, asset credit enhancement is a form of collateralization that offers credibility to financial statements via a liability that is issued from a third party, such as debt that is issued with a financial guarantee that secures the issuer’s payment obligation.

In the context of project financing, the issuance of a guarantee or additional collateral is to reinforce the credit strength of the client receiving financing for a particular project. Criss-Cross Financial Group’s Asset/Credit Enhancement program is designed to improve the credit profile of a structured financial transaction via the use of leased financial debt instruments. These instruments include, but are not limited to proof of funds letters, bank guarantees, stand-by letters of credit, bank comfort letters, verification of deposit, documentary letters of credit, and SWIFT services.

With all of these tools available to you, let us utilize our experience and vast resources to provide the most efficient path forward for your projects.

The terms Asset Enhancement, Collateral Enhancement, and Credit Enhancement Programs are widely used in the financial marketplace. These methods of financing have been known since the Phoenician Traders at the beginning of the last millennium BC and since the existence of a medium using money as an intermediary between products.

When a borrower is unable to offer sufficient collateral to cover a loan or provide an assurance that the loan will be repaid in full, he may be required to seek a form of "insurance," a loan back-up or support, to cover the loan in the event of default and they all have the pay-on-default feature. That means in the event the borrower defaults on his loan, the underwriter or financier will have to make it good…repay the loan.

Simply stated, an Asset/Credit Enhancement is a form of collateralization. The specific options offered by substantial financiers or underwriters that are based upon the credit rating of the borrower are known as Credit Enhancement Programs. You will hear people making references to "major worldwide banking institutions" or "better known insurance companies rated minimum A, or best AAA" as the preferred source of funds to underwrite these transactions. Actually, it’s not the size that matters. It’s the financial condition of the underwriter. Acceptable collateral should be written by a substantial institution (banks, insurance companies, trust companies, private entities etc.) whose credit is good and world known.

Asset/Credit Enhancements are top International Financial Debt Instruments that offer credibility to financial statements and gives you the opportunity to obtain the funds you require. We have recently contracted with a domestic bank as well from which we can provide leased instruments, asset enhancement, documentary letters of credit and certificate of deposits. If a SWIFT is required we can SWIFT from an international bank. The use of this option may enable your client to engage a transaction because of the lower cost than using a larger financial institution.

Our goal is to close your deals by using our experience and numerous options. So bring us every deal and let us brainstorm among our group. Re-visit old deals and old clients and let them know if they need leased instruments that you can help them now.

Below is a brief outline of each type of asset. Click on any headings to obtain more detailed information and to make contact with us about the instrument that fulfills your client’s objectives.

Bank Guarantee. Bank Guarantees are issued by international lending institutions and used as a line of credit to accomplish a multiplicity of tasks. Bank Guarantees are generally issued for 1 year and 1 day, with optional renewal periods. (lesser terms may be available)

Stand By Letter of Credit. SBLC’s are financial instruments that can reserve, confirm or promise funds from one institution to another or to a business. This can be used for asset/credit enhancement or as collateral.

Letter of Credit. A standard commercial letter of credit is a document issued usually by a financial institution, used primarily in trade finance, which provides an irrevocable payment undertaking.

Proof of Funds. Proof of Funds service is not a loan, but is a perfect, inexpensive and fast way to add strength to your current financial profile, show reserves or buy time in your transactions.

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