The "Discounting" of Prime Bank Guarantees (BG's) is based on the following criteria and generally accepted conditions: Depends on the type of BG, xxxxx Face Value (zero coupon); Term Interest Bearing; One Year and One Day; 5, 10, 15, 20 Year; etc. The preferred BG type is One Year and One Day, but virtually any type of BG is acceptable. The conversion value (Net Cash to Client) may vary dramatically. Bank Guarantees are defined as those issued by a Major Bank in Europe. All BG's must be $ or euro. All transaction amounts must be in or converted to US Dollars only. It must be fully understood, the BG is sold outright for a "Cash Value". The following are some examples of 'Converting a BG to Workable CASH': Example Assumes the Bank Guarantee (BG) is the One Year and One Day Type for 1.03 to 1.08 (103 to 108 percent) and issued from a top European Bank. The following in principal is how the discounting works: Cash the BG by Selling it outright. The BG can be discounted at 10+6 percent (10 percent par face value plus the 6 percent interest). Therefore, lets assume 100 million dollars plus the back end of 6 percent maturity value on the face BG amount. This would make the transaction amount have an estimated cash value of 90 Million US Dollars to the client. The Actual Cash Value on every 100 Million US Dollars (90 Million) would be paid in full at time of transaction and selling of the BG for the full face amount of 100 Million which matures at 106 percent in one year and one day. The 'Full Cash Amount' is then paid to the client through a Bank-to-Bank wire transfer. Ex Assumes the bank Guarantee (BG) is for 65 Million US Dollars, interest bearing that matures in 20 years. The following in principal is how the discounting works: 'Cash' the BG by selling it out right. The 'BG' can be discounted from 60% to 85% depending on market conditions. Therefore, a 65 million dollar BG is worth in 'CASH' 39, Mandates only Or Buyer Or Seller calli
