EQUIPMENT & LEASING FINANCING

With a long heritage as an industrial company, Robert J. Taylor & Co understands the value of business critical equipment and can help you with required financing. Whether successfully fuelling day-to-day operations with a line of credit, or requiring a more complex financing solution to meet long-term goals, Robert J. Taylor & Co has both the comprehensive suite of credit and financing solutions and the specialized expertise to meet your business or industry specific needs.

Choose from a variety of our Bank Guarantees, Standby Letter of Credits and direct loans to help you with everything from seasonal purchases to major expenses.

With our Working Capital Lines of Credit, you will get the cash flow you need to support your daily operations, we have got a loan or line of credit that can help take your business to the next level to meet your immediate, seasonal and ongoing working capital needs.

LOAN COMMITMENT FINANCING

Robert J. Taylor & Co BG specialised in providing Non-recourse Loan against collateral transfer facilities such as Bank Guarantee / Standby Letter of Credit as collateral or loan security from Top rated AA Bank.

Robert J. Taylor & Co BG/SBLC/Loan Financing can help you get your equipment financing and loan by providing you with yearly renewable leased bank instruments. Leased Instruments can be obtained at minimal costs from lessor compared to other banking finance options. This offer is open to both individuals and corporate organizations.

We welcome to contact us today to discuss your scenario.

• Industry Specializations

• Construction
• Corporate Aircraft
• Food, Beverage and Agribusiness
• Healthcare
• Manufacturing
• Marine
• Metals and Mining
• Retail
• Printing and Publishing
• Services (insurance, law firms, etc.)
• Telecommunications

EQUIPMENT LEASES & LOANS

We have developed flexible lease options, financing for equipment purchase to help you acquire the healthcare equipment you want, without hindering your financial flexibility. Need to boost your diagnostic imaging capacity over the short term? Robert J. Taylor & Co can give you immediate access to a financing system that can help you through occasional spikes in demand.

Our lease Bank Guarantee, Non-recourse loans, equipment financing can help you get the equipment your facility needs while aligning with your business plans, marketing strategy and budgetary goals. Choose from a variety of our Bank Guarantees and Standby Letter of Credits to help you with everything from seasonal purchases to major expenses.

LOAN COMMITMENT FINANCING

Robert J. Taylor & Co specialised in providing Non-recourse Loan against collateral transfer facilities such as Bank Guarantee / Standby Letter of Credit as collateral or loan security from Top rated AA Bank.

Robert J. Taylor & Co BG/SBLC Financing can help you get your health care equipment financing and loan by providing you with yearly renewable leased bank instruments. Leased Instruments can be obtained at minimal costs from lessor compared to other banking finance options. This offer is open to both individuals and corporate organizations.

VENDOR FINANCING

We offer a wide range of financing option and programs from wholesale asset purchases and large financing, to leases and loans that finance your customers’ equipment purchases.

We welcome to contact us today to discuss your scenario.

• Industry Specializations

• Outpatient Care and Imaging Centers
• Healthcare Practices
• Healthcare Services Providers
• Hospitals and Health Systems
• Life Sciences, Pharmaceuticals and Biotechnology
• Medical Device Manufacturers and Suppliers
• Senior Care Providers

INTERNATIONAL FINANCING FOR COMMERCIAL REAL ESTATE

Robert J. Taylor & Co Real Estate’s expert professionals have been providing international financing for the acquisition or refinance of stabilized and transitional properties and portfolios across the world. We are committed to fostering long term relationships with our borrowers, brokers, and investors. We offer a full range of products to meet your financing needs including structured financing, commercial mortgage backed securities, and mezzanine financing.

Choose from a variety of our Bank Guarantees and Standby Letter of Credits to help you with everything you need.

LOAN COMMITMENT FINANCING

Robert J. Taylor & Co specialised in providing Non-recourse Loan against collateral instruments such as Bank Guarantee / Standby Letter of Credit as collateral or loan security from Top rated AA Bank.

Robert J. Taylor & Co BG/SBLC Financing can help you get your health care equipment financing and loan by providing you with yearly renewable leased bank instruments. Leased Instruments can be obtained at minimal costs from lessor compared to other banking finance options. This offer is open to both individuals and corporate organizations.

• Industry Specializations

• Office
• Industrial
• Retail
• Multi-family
• Hotels
• Industrial
• Self-storage
• Student Housing
• Manufactured Home Communities

FINANCIAL COMMITMENT FOR LOAN / PROJECT FUNDING

Robert J. Taylor & Co specialized in offering Non-Recourse Loan, Project Funding/Financing against Collateral Transfer Facilities such as Bank Guarantee (BG), Standby Letter of Credit (SBLC) as Collateral or loan security from top AA rated Bank.

This platform is designed to facilitate the issuance of the Collateral Transfer Facility in favor of those applicants who do not have the instrument (BG/SBLC) to secure loan. Borrower can use the collateral transfer facilities as a loan security to retire the principal amount of the loan. In other words, the Borrower do not need to return the loan-capital or principal amount but ensure to pay the contract fee annually.

The instrument can be monetized to Secure Credit Lines and Loans or Import Collateral for Loans to raise urgent business capital, borrow larger fund, leverage investment position, refinance and restructure as well as for all kinds of import and export trading, commodity trading and others.

This program is specifically to provide collateral security (BG/SBLC) to those clients that do not have the facility to Import Collateral for Loans.

The most interesting part of our procedure is that our clients is given a privilege to pay for the contract fee after the loan amount have been received and confirmed in their bank account, by this way our company secures both the BG/SBLC (Collateral) and Loan amount for you.

We work closely with management team throughout the history of our transactions by showing real commitment while assisting with many key corporate initiatives including acquisitions and restructuring to successfully increase profitability.

COLLATERAL TRANSFER FACILITIES

Robert J. Taylor & Co are direct facilitator for issuance of Collateral Transfer Facilities such as Bank Guarantee (BG) and Standby Letter of Credit (SBLC) which are specifically for lease from top rated AA Bank in international market for many years. We offer a diverse range of options to solving your day to day trade finance problems.

These instruments can be engaged in PPP Trading, Discounting, Signature Projects such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate, Import & Export Trading and all kind of projects.

RENEWABLE LEASE BANK INSTRUMENT

Our BG/SBLC Financing can help you get your project funded, loan financing by providing you with yearly renewable leased bank instruments. Leased Instruments can be obtained at minimal costs from lessor compared to other banking finance options. This offer is open to both individuals and corporate organizations.

INTERNATIONAL PROJECT FUNDING

If you have needs corporate loan for International project funding or if you have a client that requires funding for his project or business, Robert J. Taylor & Co specialized in providing financial commitment for loan, project funding against financial instruments such as Bank Guarantee (BG), Standby Letter of Credit (SBLC). We fund 100% face value of the financial instruments.

FINANCIAL BROKERS

Intermediaries/Consultants/Brokers are welcome to bring their clients and are 100% protected. In complete confidence, we will work together for the benefits of all parties involved. All relevant business information will be provided upon request.

We welcome you to contact us today to discuss your scenario.

• Industry Specializations

• Aerospace and Defense
• Automotive and Transportation
• Chemicals and Plastics
• Financial and Business Services
• Food, Beverage and Agribusiness
• Private Equity
• Healthcare
• Manufacturing
• Marine
• Media, Communications and Entertainment
• Metals and Mining
• Paper, Packaging and Forest Products
• Retail
• Technology and Electronics

Finding a suitable financial partner that is willing to offer your corporation the financing it requires is paramount to any expanding business or project.

Robert J. Taylor & Co have exclusive ability to facilitate structured corporate loans and financing packages to a wide variety of selected clients. All corporate loans and structured financing can be arranged through our Collateral Transfer facility/Credit Facility or Collateral Enhancement Commitment for top International Financial Institution Instruments.

Our panel of private lenders and equity providers are keen to expand their lending portfolios into areas of;

• Private Healthcare
• Petro-chemicals, Manufacturing and Engineering
• Civil Construction and Government Contractors
• Real Estate Developments and Rental Portfolios
• Investment and Structured Trading Facilities
• I.T and Software Development

By offering our selective clients a complete solution to loan packages, we are able to structure the financing in a variety of different ways which can include the creation and importation of adequate security and credit enhancement. This allows us to present our clients with full solution packages.

Each contract is bespoke to the requirements of the client and lender. By introducing our skills into arranging suitable corporate structures and enhancement vehicles, our clients benefit from a complete turn-key operation.

It is essential however that those successful applicants are solvent corporations with an established history.

We welcome you to contact us today to discuss your scenario.

Restructure your company’s finances, Lower debt repayment. Become a leaner, meaner business machine; Faster, Stronger and more competitive.

Restructuring does not always mean bad news, job losses and ‘pulling in the belt’. To the contrary, it more often means becoming leaner, faster and stronger in the preparation to become ‘attractive’ to outside investors and become more profitable. Moreover, it means becoming more efficient.

A simple restructure can also be seen as a financial spring-clean, ridding the inefficiency within the business. As a business grows and acquires assets and increases its ground in the market place, it is essential to review the business structure. For faster growing businesses and businesses going through rough times and constricting its operations, a regular view by its executives at mild-restructure is essential to maintain efficiency and profitability – making the maximum of the business turnover, profits and assets.

Restructuring can therefore take many different forms. It can address its existing borrowings in an attempt to lower them or to offset them, or to refinance to obtain longer and more competitive repayment terms. It can also address the management of collaterals and restructuring of assets to increase the company’s wealth, health and gearing ratios to become ‘fitter’ and attract investment.

Restructuring on a larger, more intense scale, may result in the offsetting or avoidance of tax obligations and the offsetting of short-term debt into longer term debt obligations.

In preparation for a major investment, loan application or IPO, a view at restructure is important.

To effectively restructure, it is important to have a complete understanding of the benefits of international jurisdictions, tax efficiency, business capital options and many other complex financial issues.

Once we are invited to learn more about your business, we can provide comprehensive advice and offer numerous financial solutions such as;

• Introduce further investment and loans
• Offsetting immediate liabilities
• Lower (or eliminate) tax liabilities Prepare your business for sale
• Eliminate unprofitability
• Maximise profit

We welcome enquiries from all types and sizes of business in United Kingdom and we would be pleased to hear from you to see how we can help.

Every once in a while it is important to review the debt platform of the business and its group structure. To analyze the group structure in relation to debt security and cross-company guarantees to economize and minimize waste. It may be the case that assets are still bound by the bank or other lenders for unused overdrafts or assets has risen in value since the last valuation and high value assets may be securing small debts at high rates. Alternatively, assets may have been devalued by your Lenders and interest rate increases may have been applied.

There are many objectives for a company to restructure its debt;

• Lower Debt Repayments
• Lower Interest Rate Charges
• Free-up Assets
• Renegotiate terms
• Increase Borrowings
• Preparing the Company for Sale or IPO

Debt restructure can take many forms. It may involve the creation of special purpose vehicles and securitization techniques, converting current debt into non-recourse loans, off-balance sheet. It may mean the renegotiation with existing lenders and the partitioning of encumbered assets.

With the objectives of the restructure firmly in mind, Robert J. Taylor & Co can create simple financial structures that minimize the impact of debt repayments, isolate potential bad debt and protect the company’s main assets from any form of claim or repossession. This type of debt restructure may be crucial for companies facing hard financial crisis.

Debt Restructure is not only for troubled or stressed companies. Debt restructure promotes financial health and assures financial efficiency.

When selling companies or parts of a company group, debt restructure may be crucial to aid the sale. To remove liens and charges over assets being used for cross-company guarantees and to isolate debt in a given subsidiary or separate corporate vehicle.

It is also important to track the best rates for borrowings and to ensure that corporate loans are properly match-funded; short-term assets are matched with short-term borrowings and long-term assets are matched with long-term borrowings. To be ‘rate efficient’ can assist in the company’s cash-flow.

Whatever the objective, Robert J. Taylor & Co can offer concrete advice and create the necessary structures needed for efficient and sustainable debt restructure.

To speak with one our partners about how we can help you restructure your debt, lower debt commitments or isolate troubled subsidiaries, please contact us in the strictest confidence.

Becoming tax efficient means that all options to minimize tax liability have been optimized. For group structures this means the implementation of offshore structures and intelligent cross-company relationships. It means that assets are in the correct place, sitting correctly within the group structure and that borrowings are burdened by the right company or special purpose vehicle.

Cross-company accounting procedures may need to be reviewed. As with any restructure, to become tax efficient may mean a good spring-clean of the business. Knowing the way around international corporate and tax law is essential.

To structure a perfect, tax safe and legal strategy to withstand any tax investigation is paramount in creating a solid corporate structure and to maximize the profitability of the business. At the same time, it must be credible and avoid ‘scrupulous’ jurisdictions that could give the company a bad image to its shareholders. It is equally important that the structures employed do not install fears of the ‘skimming’ of profits away from the shareholders.

Various intelligent and complex financial strategies are employed in these strategies. Offshore structures, tax trusts and SPV’s can be employed to offset tax liabilities, extinguish capital gain and to avoid direct tax. The correct corporate structure can also help in offsetting and lowering VAT / TVA liability, particularly with Swiss – Euro structures.

As well as corporate tax structuring and private tax trusts, Robert J. Taylor & Co can provide senior executives with UK residencies connected to their corporate structure to provide not only low corporation taxes but moreover a tax friendly environment to receive dividends and bonuses.

To find out how you can become tax optimized, contact us in strictest confidence where our expert tax partners will be able to help and offer the necessary step-by-step assistance.

For young companies and companies experiencing tough financial times, it is not always easy to convince your company bankers to grant finance and loans when they are needed the most. It is common to find highly geared companies in times of recession and often companies have borrowed to the hilt of their assets. Some young companies may not have any borrowings at all; not because they are financially independent, but because banks and lenders will not grant any credit to them.

Bankers and Lenders alike will demand security for any loans or investment. If the company has already used available equity or does not have access to strong security, the options of borrowing are dramatically decreased.

Shareholders can of course be approached to raise further capital and the options of Bond Offerings and Private Placements may also be made. However, these avenues are not always the best course of action, or the most economical. They can be long, drawn-out processes and the company may not have the time or the money to launch such complex financial actions.

In these circumstances, it may simply be preferable to import or lease collateral assets to offer as security for conventional borrowings.

Through Collateral Management and Security Leasing programs, Robert J. Taylor & Co have experience in providing collateral and security to potential borrowers to secure further bank borrowings with their conventional bankers or from lending facilities arranged through our partnerships.

By providing Financial Guarantees or Third Party Corporate Guarantees from multi-national conglomerates working closely with Robert J. Taylor & Co, potential borrowers will find it easier to obtain bank borrowings, raise urgent business capital, borrow larger fund, leverage your investment position, refinance and restructure as well as for all kinds of Trade, Commodity trading and others.

Financial Guarantees, Third Party Guarantees (‘White Knight’ Guarantees) and Collateral Leasing can prove an effective solution to increase borrowings or for financing and can be efficiently used as bridging finance. Most common form of security acceptable in the world today is a BG / SBLC.

To understand these procedures and to receive more information, we would be very pleased to hear from you.

Raise capital and utilize stagnant assets to create cash generation.

Many businesses and corporations regardless of size or stature will acquire and hold assets of some nature. As the business grows, so does its assets. Often through the growth process, the older assets or under-used assets may begin to take a lower priority over newer and larger assets used by the business. It may also be the case that assets may be acquired and used to secure loans, debts and other repayment obligations. Some assets are more liquid and used to create investment returns. Cash may be invested into bonds and other bankable securities and the business may utilize the returns and retain the capital on its accounts.

There are many types of assets, those that are liquid (Cash / Bonds), those leaning toward liquid (Short Term / Property), those that are less liquid (Long Term / Static) and those that are very illiquid that we would term ‘Exotic’ (Rights, Sub-terrain assets, etc.). These assets can be depicted in an ‘Asset Spectrum’;

When it comes to raising capital against assets, conventional banking facilities offered from high street and mainstream banks can often utilize the more liquid assets and (as shown in the diagram) a greater Loan to Value ratio can be achieved.

However, when it comes to the longer-term, less liquid assets and of course the exotic assets, many businesses would struggle convincing a conventional bank to grant credit facilities over these.

That does not mean that they cannot be utilized. Assets falling into these categories can be used through the creation of bespoke financial structures to create cash flow, raise capital and enhance balance sheets.

More liquid assets such as bonds and property can also be used to maximize returns where they are not already encumbered. Whilst these assets may already produce monthly or annual returns, the capital held within these assets may still be regarded as ‘stagnant’ as the capital is simply sitting there. It is possible to tap this equity (without risk) to produce enhanced returns up to 12% gross per annum* in addition to (and unaffecting) existing returns.

By using these stagnant assets (often difficult to identify from the company accounts), our Clients can;

• Create additional cash flow
• Raise further capital
• Restructure to become more tax efficient
• Enhance current value
• Free tied-up cash

To find out how your business can use its stagnant assets more efficiently or to make an application for raise capital, please contact our expert team who will be able to offer you guidance and advice and establish the necessary no-obligation consultations.

* Subject to 12 month commitment. Returns may vary.

This does not constitute an offer of investment.

Raising funds against varied portfolios can be a laborious process. When portfolios of assets are not conventional (i.e. real estate, instantly liquid stocks, tangible assets), most conventional bankers will hesitate at offering leverage or loans.

Through extensive partnerships and associations with private and institutional investors, Robert J. Taylor & Co are able to offer facilities against unconventional portfolios that may include junk bonds, offshore bank notes, contested LC’s, debt obligations and low-rated bonds. In addition, supply contracts, rights and licenses may also be used to raise funds.

Physical portfolios such as artworks, antiques and collections (stamps, motor vehicles, exotics) may also be included.

Tapping equity of encumbered exotic assets and tapping the unused capital element of investments can equally be accommodated for short to mid-term borrowings at very competitive rates.

As well as direct loans and Lombard loans, such portfolio assets can be used in various collateral management programs to create annuities and fixed incomes with little or no risk, maximizing the earning potential of almost any portfolio or asset base.

o see how your portfolio can be optimized for maximum gain, please contact us where our expert partners will be able to advise how you can raise money or an annual income against your portfolio or assets base.

Every once in a while it is important to review the debt platform of the business and its group structure. To analyze the group structure in relation to debt security and cross-company guarantees to economize and minimize waste. It may be the case that assets are still bound by the bank or other lenders for unused overdrafts or assets has risen in value since the last valuation and high value assets may be securing small debts at high rates. Alternatively, assets may have been devalued by your Lenders and interest rate increases may have been applied.

There are many objectives for a company to restructure its debt;

• Lower Debt Repayments
• Lower Interest Rate Charges
• Free-up Assets
• Renegotiate terms
• Increase Borrowings
• Preparing the Company for Sale or IPO

Debt restructure can take many forms. It may involve the creation of special purpose vehicles and securitization techniques, converting current debt into non-recourse loans, off-balance sheet. It may mean the renegotiation with existing lenders and the partitioning of encumbered assets.

With the objectives of the restructure firmly in mind, Robert J. Taylor & Co can create complex financial structures that minimize the impact of debt repayments, isolate potential bad debt and protect the company’s main assets from any form of claim or repossession. This type of debt restructure may be crucial for companies facing hard financial crisis.

Debt Restructure is not only for troubled or stressed companies. Debt restructure promotes financial health and assures financial efficiency.

When selling companies or parts of a company group, debt restructure may be crucial to aid the sale. To remove liens and charges over assets being used for cross-company guarantees and to isolate debt in a given subsidiary or separate corporate vehicle.

It is also important to track the best rates for borrowings and to ensure that corporate loans are properly match-funded; short-term assets are matched with short-term borrowings and long-term assets are matched with long-term borrowings. To be ‘rate efficient’ can assist in the company’s cash-flow.

Whatever the objective, Robert J. Taylor & Co can offer concrete advice and create the necessary structures needed for efficient and sustainable debt restructure.

Please contact us in the strictest confidence.

The most important participant in a bond issue is the Issuer of the bonds. The Issuer is the one with the ultimate need, to raise money and capital for its projects and acquisitions or for refinancing. All of the other participants are there to assist in raising the money.

Bond issues can be made by companies where they need to raise funds over a medium to long term.

There are typically many parties to a bond issue, other than the Issuer and the buyer;

• The Investment Banker also referred to as the Bond Underwriter. He markets the bonds to the public (or direct to closed parties) and agrees to buy the bonds from the Issuer and resell them to the Bond Purchasers. Often, the banker will assist in structuring the bond and preparation of the bond issue documents and may solicit bids from multiple underwriters. However, some smaller bond issues may be carried out on a closed-loop transaction where a bank or fund may agree to purchase the entire bond offering and therefore in such case the Issuer may choose to issue a single bond rather than multiple bonds.
• The Attorney. He will represent the Issuer in the financing and delivers legal opinion at the closing of the bond issue. The legal opinion will cover matters such as confirming the issuer is a valid entity that the officers and executives of the Issuer hold valid appointment, that the meeting of shareholders calling for the bond offering was properly carried out and that no litigation is pending against the Issuer.
• Bond Counsel. It is common practice for the Issuer to retain a bond counsel firm which specializes in bond issues and who will work with the Attorney with respect to legal issues and various aspects of the financing. Bond Counsel will co-operate with the Issuer and the Underwriter in structuring the transaction.
• The Trustee. This is a bank chosen by the Issuer. Once the bond issue is closed and completed, debt service payments are made by the Issuer to the bondholders through a paying agent or Trustee. If the bond issue ever goes into default, the Trustee usually represents the bondholders in remedial proceedings against the Issuer.
• Credit Enhancement. This is typically a bank or insurer. It will often make commercial sense for the Issuer to pay a third party to guarantee the bond issue. An insurance company may issue an insurance policy (or financial guarantee) guaranteeing payment of debt service on the bonds, or a bank may issue a Guarantee to underpin the bonds.

Undertaking a bond issue is a complex financial procedure that calls for expert knowledge in coordinating all parties to best serve the Issuer. Robert J. Taylor & Co can deliver all requirements to the Issuer and co-ordinate the bond issue. Taking your offering to the market place and ensuring that your bond issue succeeds to raise your company its financial requirement.

To discuss the intricacies of undertaking a bond issue and to discuss the benefits that it may hold for your business, please contact us in confidence where our expert team will be pleased to advise and offer the necessary consultations.

In the process of a Bond Issue, it is often recommended by Bond Counsel to have a Credit Enhancement to the Bond offering. This has several favorable benefits for the Issuer;

• Credit enhancement will guarantee the Bonds, offering a degree of relief for debt obligations of the Issuer
• It will often hold the underlying rating of the Credit Enhancer (a bank or insurer) and will therefore make the Bonds more attractive to purchasers
• It can make the Bonds of an ‘investment grade’ and can benefit smaller, less well-known Issuers.

Credit Enhancement to a Bond Issue may be the final piece of the complex jigsaw that is the bond issue process and may be the culprit of the highest portion of cost.

Credit Enhancement can take many different forms. Typically, it may be an insurance policy or a type of financial guarantee that is underwritten by an insurer who specializes in financial risk. It may often be a bank who may issue a Letter of Credit or other form of Demand Guarantee to underpin the Bond. It may also be the assignment of other forms of assets, creating an asset backed Bond. The Trustee being the holder of such assets.

The structure of the Credit Enhancement could ultimately be the deciding factor of whether a potential investor accepts to purchase the bonds or not. Ultimately, how safe is the end credit? Of course, if the Bond is backed by a rated and known insurer or bank, then the investment risk in purchasing the bonds is smaller than having no credit enhancement at all and relying on the strength of the Issuer alone.

It is of extreme importance to find the correct Credit Enhancement for the Bond and ensure that it is suited to the structure of the Bond. Above all, there are two factors that will influence the method utilized. Firstly, the costs: Insurance Guarantee’s or Financial Guarantees may be more expensive for young companies as the Issuer compared to perhaps bank undertakings. Secondly, the rating required for the Bond: To achieve an investment grade rating becomes attractive to purchasers, it is important to ensure that the Credit Enhancement carrier is of suitable size, ranking and stature. Of course, the more complex the enhancement, the more costly it could be.

If you are contemplating a Bond Issue, or indeed any other type of debt obligation issue and are seeking the correct Credit Enhancement partner to underpin the obligations and of course to minimize enhancement costs, please contact us where our experienced partners will be pleased to assist you and provide the best options for necessary facilities.

As the Bond Issue closes, it is a requirement for the Issuer to appoint a Trustee (or Paying Agent). The Trustee will be a recognized Bank, chosen by the Issuer. The role of the Trustee is to administer debt service payments made by the Issuer to the bondholders.

The Trustee may also be called upon should the bond issue ever go into default. The role of the Trustee in this instance will be to represent the bondholders in any remedial negotiations and proceedings against the Issuer in the recovery of their investments.

Having a well-known international bank as the Trustee is not only important to convey security and comfort to the bondholders and potential bond purchasers, it is also important to have the correct bank and a strong relationship with them. Strong bank relationships are an important factor in any commercial banking operation. The issuance of bonds is of course no exception.

Robert J. Taylor & Co have relationships with many international banks that are experienced as acting as Trustees for bond issues of all types and values and in many different jurisdictions in many different currencies. By ensuring you discuss your requirements with us in confidence can equally assure you that the correct Trustee relationship can be installed for you as the Bond Issuer.

As well as Trustee and Paying Agent services, Robert J. Taylor & Co can also provide Investment Banking and Bond Counsel services.

Please feel free to discuss your requirements and circumstances with us where our experienced partners will be able to make the necessary introductions to high-level relationships within international banks based in United Kingdom and throughout the world.

Advising and financing various bond issues, Robert J. Taylor & Co has access to many different investment opportunities that may not be accessible to the public. Involved with closed-loop investment strategies and Private Label Funds, Robert J. Taylor & Co are ideally placed to offer exclusive introductions for potential sophisticated investors direct to investment bankers soliciting bids for new bonds issue and other investment opportunities.

Working with our partner’s bank and combined with the ability to structure complex financial portfolios and leverage purchase schemes, we can create bespoke asset vehicles and strategies to maximize the investment power and returns for our Clients. Working with smaller sophisticated investment groups through vehicles such as white label funds, we can design specific target purchases in new issue bond markets and emerging markets as well as laying down access to medium term note trades and securitizations of coupon notes.

To receive further information on these types of investment services, please feel free to contact us where our investment partners will be pleased to discuss your requirements and offer any advice necessary. We look forward to meeting with all our potential investors and to discussing matters in strictest confidence here in United Kingdom through our personal invitation.

* This should not be considered as a solicitation of investment.

We carefully evaluate the specific needs, skills, expertise and aspirations of each client to assemble a client team we believe is best suited to assist them in pursuit of their goals. Clients receive personal attention from their dedicated team members and, depending on their needs, the direct involvement of Robert J. Taylor & Co’s senior management team—a commitment that larger firms often can’t make.

Our team members offer a blend of experience, talent and diverse disciplines while sharing a commitment to intellectual integrity, expertise and excellence — working hard to earn and keep our clients’ trust through generations. Robert J. Taylor & Co continues to deliver this level of service by attracting and retaining highly qualified professionals who all share a desire to provide effective, practical advice.

Bank Guarantees received under Collateral Transfer facilities may be used by the Beneficiaries to secure credit lines at their bank. Typically, a banker will have no objection to offering credit against Bank Guarantees received in this manner up to 100% of face value, less of course advance interest charges and bank fees. However, typically lending rates (loan to value or LTV) will be around 60% to 90% of face value. The total credit term can be for the duration of the Guarantee, i.e. 1 to 10 years, but of course will not exceed the term (or expiry) of the Guarantee.

The Guarantees that are issued under these types of facilities are worded specifically to secure credit lines. Guarantees are issued under ICC758 protocol and are readily accepted by all international and private banks. Often they are called ‘Letters of Guarantee’ or ‘Credit Facilities Guarantees’.

Robert J. Taylor & Co can of course assist its clients in raising credit against guarantees of this type in the event that our clients own bank declines to offer lending facilities. We hold strong relationships with understanding banks and private equity groups holding an appetite to expand lending opportunities in this area. It should be noted however that additional fees will apply if you utilise our services to obtain credit lines.

Robert J. Taylor & Co can also open banking and lending facilities for its selected clients by direct introduction to the willing bank. Please enquire for a detailed quotation.

It is of course common sense that you first need to be approved for receiving the Bank Guarantee prior to applying for credit against it.

When dealing in the purchase of oil and energy products, we appreciate the need for professionalism, discretion and velocity. That is why we offer our clients a fast and effective solution for the raising of Letters of Credit for the purchase of fossil fuels, oil and refined oil products. We are able to offer trade finance facilities that meet your requirements and the demands of your suppliers.

If you are about to enter a Sales and Purchase agreement and require financing for the transaction, please contact us.

Providing our clients with the financial abilities to sustain long and profitable relationships with oil refineries, re-sellers and mining companies, we offer an unbeatable service.

We raise Letters of Credit for our clients who purchase energy fuels from international suppliers and offer facilities for the issue of reciprocal or back to back Letters of Credit for re-sellers and intermediaries. We offer multiple reciprocal Letters of Credit making it easier for re-sellers to offer CIP transactions to their onward buyers without the need to risk advance shipping costs.

Working closely with our partnership banks around the world, we are also able to confirm our client’s payment abilities (proof of funds) and assist our clients in meeting the seller’s requirements, making it easier for our clients to negotiate good terms with leading international suppliers.

Please email us with your details and requirements. Our expert advisers will respond to you with full information on our services and will be pleased to assist in any enquiries.

Financing for Re-Sellers and Intermediaries

Are you purchasing refined oil products with the intention to resell and having difficulty showing your supplier your proof of payment or ability to pay?

We can provide the solution you need through a transferable Letter of Credit or Back to Back Letters of Credit.

If you are using your buyers payment confirmation to show your supplier that you have the ability to pay, you will more than likely need Back to Back Letter of Credit facilities.

Back to Back L/C’s (or Reciprocal L/C’s) mean that you can raise a letter of credit to your supplier using a letter of credit you have received from your buyer without declaring to your buyer the ultimate supplier of the product. This method is favored with intermediaries to protect them and to keep their buyers completely separated from their suppliers.

Robert J. Taylor & Co can arrange these facilities through world renowned banks, ensuring your letters of credit is acceptable to international suppliers and keeping costs low.

Our pricing is market driven and our terms are extremely competitive.

If you require any advice or guidance on your financing requirements, please contact us

Our clients benefit by using our services to ensure they have the best possible chance of getting accepted by a Provider. We ensure that our clients obtain the most competitive contract in terms of minimizing cost and maximizing term and value.

By commissioning Robert J. Taylor & Co to obtain a Collateral Transfer facility, we undertake to fast-track every application and obtain the optimum terms within 7 working days of application. As we hold strong relationships with top international banks, we ensure the best possible chances of acceptance and the most competitive terms.

We provide full detailed and definitive Terms free of charge. These will be offered as a formal Letter of Intent secured with Robert J. Taylor & Co.

A Contract fee will be deducted at closing, you will only be responsible for the SWIFT Charges of the bank instrument.

*It should be known that Robert J. Taylor & Co may make commission payments to introducing brokers from completion fees received*

Collateral Transfer facilities are available from $1million to $500 million per contract. Amounts over $500 million can be achieved by entering multiple contracts.

Collateral is of course limited and a Provider will only offer to his maximum limit which is dependent upon the status of the applicant and current market conditions.

Robert J. Taylor & Co will of course issue the Bank Guarantees/SBLC from international banks, making them widely acceptable. All Guarantees are issued inter-bank via SWIFT. Applicants can provide their own verbiage, although all Guarantees issued under these facilities contain standard credit facility guarantee wording (ICC758) which can be provided upon request.

Typically, the term can be from 1 year, renewable to up to 5 years, depending on the willingness of the Provider and the strength of the applicant. Longer terms are sometimes negotiable to 10 years although this may only be available to very strong applicants and longer term projects.

Contract Fees (Leasing Fees) levied by Robert J. Taylor & Co are minimally low commonly between 10% and 15% per annum, depending on the term, amount and current market demand. Multiple contracts will of course attract lower rates.

All costs, procedures and terms are detailed in full in the Term Sheet we provide before the applicant is required to make any financial commitment. There is no obligation to accept Terms once they are offered.

Firstly, in order to progress a facility, we will need to receive the completed Customer Information Profile (or CIP form).

• Once we receive your information it will be immediately acknowledged. As we are required by law to undertake due diligence and identification verification. After a successful verification exercise, our compliance department will carry forward your application to offer our finance department the initial acceptance of the application.
• After initial acceptance, We would further discuss the possible terms, conditions and offering including pricing, cost and the maximum amount of the Guarantee available to the applicant (subject to contract).
• If these indicative terms are acceptable, we then begin to acquire the formal and detailed terms which are then presented in Letter of Intent to the applicant. The Letter of Intent is an offering which details all elements of the Guarantee including the amount, terms, the issuing bank, pricing, costs, terms and automated transactional procedures.

Note: The LOI doesn’t constitute an offer. The LOI outlines the terms of a deal and serves as an “agreement to agree” between two parties and not a binding agreement. All the possible terms would be outline on the LOI for applicant review and authorization for Robert J. Taylor & Co to send Deed of Agreement which would be binding agreement between both parties

• If the Terms provided are acceptable, the applicant formally accepts the Terms by signing and returning the Letter of Intent within the period of validity (usually 3 working days). The applicant is under no obligation to accept the Letter of Intent. Upon accepting the Terms, the Booking Fee should be paid to Arawak capital for procurement of the Guarantee.
• Once the Letter of Intent is received, Arawak capital will issue an approved Automated Transactional Timeline, which will outline the dates for completion of the transaction and shall be considered part of the contract binding between both parties. The Applicant will Review, Sign, Stamp and Return the Automated Transitional Timeline as an authorization for concurrent approval of the stated transactional dates.
• Once the concurrent approved Automated Transactional Timeline is received, Arawak capital will issue the binding Deed of agreement (DOA). The Deed of Agreement will governs the transaction throughout the term of the Guarantee and it is binding on both parties.
• After successful execution of the contract, the applicant will send the bank transmission and administration fee (SWIFT Charges) for pre-advice via MT799 and BG via MT760 for the transmission of the BG/SBLC as agreed in the Deed of agreement (DOA).
• After receipt the payment of the SWIFT charges for the transmission of pre-advice via MT799 and BG via MT760. Our Issuing Bank will initiate a SWIFT Pre-advice via MT799 to the recipient bank (the bank receiving the Bank Guarantee/SBLC) confirming and verifying the pending transaction.
• The Beneficiary will be expected to instruct his receiving bank to respond to the SWIFT advice offering their agreement to receive the Guarantee and to provide any other account verifications required, prior to the transmission of the Bank Guarantee via MT760 to the Beneficiaries account.
• The Beneficiary will be expected to clear any encumbrances over the Guarantee within 3 working days prior to its expiry.
• It is recommended that a period of between 5 to 7 working days is allowed for completion of the above transactional procedures. It is possible to achieve faster completion times with the full co-operation of all parties, however an absolute minimum of 5 days should be allowed.

We welcome any enquiries or questions. We feel it is necessary for our clients to fully understand all elements of a facility before applying

Collateral Transfer encompasses the term of ‘lease’ or ‘leasing’ as a descriptive term. Whilst it is not possible to physically lease a Bank Guarantee (BG) or Standby Letter of Credit (SBLC), see WHY LEASING it is possible to effectively import these bank instruments (BG’s and SBLCs) on a ‘rental’ basis.

A Bank Guarantee is a method to secure or guarantee a payment. They are commonly used a Credit Facility Guarantees to secure or underpin credit lines, loans and other forms of credit advancement. Equally, SBLC’s (or Standby Letters of Credit) are used for the same purpose, although a Bank Guarantee is better suited for the job.

Bank Guarantees can be effectively ‘rented’ from a third party known as a ‘Provider’. Providers are often large private equity companies, hedge funds and wealthy family offices. They enter into Collateral Transfer Agreements with entities that wish to ‘borrow’ or ‘rent’ security in the form of a BG or SBLC. The Provider will pledge his assets (cash, gold, liquid stocks and shares, etc.) with his bank and instruct the issue of a BG or SBLC to the recipient in return for a Contract Fee (or ‘rental’ payment) generally on an annual basis. The recipient will indemnify the Provider against loss and will therefore agree to extinguish any loans or credit secured on the Guarantee prior to its expiry. As there is a ‘promise’ to remove any encumbrances or effectively to ‘return the Guarantee at expiry’ it resembles the act of leasing, hence the term ‘leasing of Bank Guarantees’.

The Parties to these transactions are the Provider and the Recipient. Their respective banks and bankers are not party to the Collateral Transfer Agreement as they will simply “accept instructions” from both parties. The Issuing Bank will act for the Provider and take his instructions; the Recipient Bank will act for the Recipient and further take his instructions. Banks do not directly enter into these facilities as the assets underpinning the whole transaction belong to a third party outside the bank (i.e. the Provider). The Recipient Bank may offer to extend credit to the Recipient against the security of the incoming Guarantee. However, the Recipient Bank will have no other role than to receive the Guarantee and accept it as security for any credit granted to the Recipient or Beneficiary of it.

There are several new private banks being formed specifically for collateral management and we may see in the next few years, private banks offering these services by utilise their own balance sheets to make such commitments. However currently, they are done off the bank balance sheet. This means that the Guarantee being issued is not issued on the strength of the bank or the banks rating. All Guarantees issued under this manner are for ‘value received’ and therefore the bank rating is not so important.

A Recipient Bank may judge the strength of the incoming Guarantee by the Issuing Banks performance on honouring its payments as depicted by their own experiences with that certain bank. As Bank Guarantees cannot be bought or sold or traded in any way, bank ratings are not affirmed to the instrument.

Recipients of Bank Guarantee or indeed SBLC’s have a specific purpose and requirement. The Guarantee is therefore worded for such purpose, i.e. to secure a credit or loan or to secure (third party) performance or contractual obligations.

The ‘Lease’ or ‘Leasing’ of Bank Guarantees are undertaken through Collateral Transfer facilities.

Collateral Transfer is the provision of assets from one party (the Provider) to the other party (the Beneficiary), often in the form of a Bank Guarantee. Whereas the Provider agrees (through his issuing bank) to issue a demand guarantee (the Bank Guarantee) to the Beneficiary in return for a ‘rental’ or ‘return’ known as the ‘Leasing/Contract Fee’. The parties agree to enter into a Collateral Transfer Agreement (CTA) which governs the issuance of the Guarantee.

‘Leasing a Bank Guarantee’ is a common phrase associated with Collateral Transfer. Since it is not possible to physically ‘lease’ a bank guarantee, we use the term loosely as its structure resembles that of a commercial lease. However, these arrangements should be correctly referred to as ‘Collateral Transfer Facilities’ as effectively no leasing takes place. A Bank Guarantee is issued specifically for the purpose to the Beneficiary and each contract is bespoke.

A Collateral Transfer facility is the Provider using his own assets to raise a specific Bank Guarantee through his issuing bank for the sole use of the specified Beneficiary, for the specified term. It is effectively a form of Securities Lending and often a derivative of re-hypothecation. There is no reference to ‘leasing’ when receiving a Bank Guarantee in this fashion.

The Guarantee is issued by the issuing bank of the Provider to the Beneficiary’s account at the Beneficiary bank and is transmitted inter-bank via the appropriate SWIFT platform (MT760 in the case of Guarantees). During the term of the Guarantee, the Beneficiary may utilise it for their own purposes which may include; security for loans, credit lines or for trading purposes. At the end of the term, the Beneficiary agrees to extinguish any encumbrance against the Guarantee and allow it to lapse (or return it) prior to expiry and indemnify the Provider against any loss incurred by default of loans secured upon it.

A Provider will often be a collateral management firm, a hedge fund or private equity company. Effectively, the Guarantee is ‘leased’ to the Beneficiary as a form of investment since the Provider receives a return on his commitment, hence the misnomer of the term ‘leasing’.

Over recent years, these facilities have become more popular since they enable the Beneficiary to have access to substantial credit facilities by using the Guarantee as loan security. Since the Guarantee is effectively imported to the account of the Beneficiary, the underwriting criteria is considerably less than that of conventional lending.

Guarantees received in this way are in no way different from any other form of demand Guarantee. The fact that there is an underlying agreement (the Collateral Transfer Agreement) has no bearing on the wording or construction of the Guarantee. This allows the Beneficiary to use the Guarantee to raise credit, to guarantee credit lines and loans or to enter trade positions or buy/sell contracts.

More competitive pricing by Collateral Providers have also made it available to a growing number of small, medium sized enterprises seeking urgent capital for a wide range of reasons.

Most companies wanting to import security in this way, i.e. to receive a Bank Guarantee or SBLC under Collateral Transfer Agreements, want to either (a) raise money by credit or loan, or (b) enter into a trade position. There are other reasons but the former two represent around 90%+ of all applications.

Companies choose to seek these facilities as they do not have the collateral of their own to secure borrowings. Others may wish to leverage investment and trade positions. Companies can obtain up to 900% leverage over 12 months using these types of facilities.

Companies seeking short to medium term loans can also use such facilities to attract investment, credit and loans.

Please feel welcome to contact us

It is technically not possible to lease a bank guarantee (BG) or standby letter of credit (SBLC). If a request was made to a banker to lease a demand guarantee, the response would be that of confusion. The correct term to use is ‘Collateral Transfer’. This is a private agreement between a funder (Provider) and a borrower (Recipient or Beneficiary) whereby the Provider agrees to pledge assets with his bank and to make an ‘investment’ to the Recipient.

The investment is made by the Provider lodging funds with his bank but instead of remitting them as a cash injection, they are remitted as a Bank Guarantee (demand guarantee see URDG ICC 758 or in some cases dependent on jurisdiction, a Standby letter of credit (SBLC).

In return, the Recipient will agree to pay to the Provider a return known as the ‘Contract Fee’. This is normally a fixed fee set annually and paid in advance when the Guarantee is advised to the Recipient Bank in the correct protocol and agreed as received. Sometime, Providers may also take an equity stake.

During the life of the Guarantee and whilst it is in the account (in possession of) the Recipient, the Recipient may use the Guarantee as security for loans and credit, or indeed secure other forms of debt against it.

Irrespective, at the end of the term, i.e. at expiry of the Guarantee or SBLC, the Recipient will pre-agree with the Provider to remove any encumbrances or loans or credit secured against the Guarantee. In this respect, effectively agreeing to return the Guarantee to the Provider, although it will simply expire and no physical return is required.

As there is an agreement to “provide” and the same agreement calls for its effective “return”, the process is remarkably similar to normal leasing agreements. Hence, these facilities have picked up the phrase ‘Leasing Bank Guarantees’

It should not be confused with the ‘sale’ or ‘purchase’ of Bank Guarantees as it is not possible to buy or sell Bank Guarantees or Letters of Credit of any form. If you are offered a Bank Guarantee or SBLC for sale, we would advise that you act with extreme caution

Collateral Transfer is where a Provider agrees to utilize his assets to the benefit of a third party, namely the Beneficiary (or Principal). This is done through a Collateral Transfer Agreement and involves the ‘transfer’ of the original asset (the ‘collateral’) into a new security that the Beneficiary can utilize. Hence the term “Collateral Transfer”.

This is done by the Provider of the original or underlying asset pledging the asset to the facility bank (the Issuing Bank) in order that the Provider can instruct the remittance of a Bank Guarantee to the Beneficiary and his Recipient Bank. The Bank Guarantee that results can be used in any way by the Beneficiary. The underlying asset pledged to the Issuing Bank may be cash, bonds, stocks, gold or other assets (or often a combination of many) and is provided by the “Provider”.

The Provider will be a private equity or investment group or a collateral management company making investments on behalf of its clients. A Provider will often receive the assets through private label funds set up for the purpose, or from hedge funds, pension funds or high net worth individuals and family offices.

Providers are able to offer its investors good returns on non-liquid assets by offering Collateral Transfer facilities. This makes good opportunity to investors that wish to seek additional returns by placing their assets with the Provider. The Provider then in-turn seeks suitable clients (beneficiaries) to receive Collateral Transfer facilities. The Contract/Leasing Fees paid to the Provider by the Beneficiary for the use of the bank guarantee are then divided amongst the investors (the owners) of the original underlying asset as a return. A portion of course retained by the Provider as their management fee. This allows investors to obtain good annual returns on assets they would otherwise not be able to invest. For example, valuable artworks, real estates, stagnant capital, etc.

The Provider will use his bank relationship to pledge these assets to the Issuing Bank and have them issue a Bank Guarantee to the Beneficiary for a given term (usually 12 months renewable terms). The Beneficiary will pay to the Provider a Contract/Leasing Fee for the use of the Bank Guarantee over the term.

The following diagram shows how the entire structure is organized.

The facility is governed by a Collateral Transfer Agreement (commonly referred to as a CTA). Each CTA is bespoke to the specific transaction. This Agreement binds the Provider to issue the Guarantee to the Beneficiary for the given term and binds the Beneficiary to accept the Guarantee and to pay the Contract/Leasing Fees to the Provider for its use. It is of course known to all parties that the Beneficiary will use the Bank Guarantee to raise credit and will therefore encumber the Bank Guarantee (i.e. the lending bank will lien it as security). This is referred to as ‘monetization’ of the Guarantee. Whist this is of course acceptable to the Provider, the Beneficiary will need to make a declaration that they adhere to remove any encumbrance over the Guarantee 5 days prior to the Bank Guarantee expiry date. Therefore the Beneficiary must make his own arrangements with his bank (or the bank lending the credit against the bank guarantee) to repay any loans secured on it. Otherwise the Beneficiary will be in breach of the CTA. This is referred to as the ‘exit strategy’, i.e. how the Beneficiary will exit the contract and repay the debt secured on the Guarantee.

Commonly, the Beneficiary will refinance with the lending bank to remove any encumbrance over the guarantee at expiry, or choose to renew the CTA for a further 12 month period. If the Beneficiary fails to repay any loans secured on the Guarantee at expiry, the lending bank will call it and the Provider will lose his pledged assets. In these cases, the Provider will take recourse of debt recovery against the Beneficiary. It is therefore required that the Beneficiary is reputable and financially sound and that is why there is the initial due diligence and acceptance period before we are able to offer Terms. Only when the Beneficiary is accepted are Terms offered.

Therefore, to exit the contract successfully, the Beneficiary will utilize loan funds raised on the Guarantee for commercial purposes. Rather like a bridge loan, the Beneficiary will need to receive his investment or liquidate his project prior to the expiry of the Guarantee, allowing him to clear and remove any encumbrance over it.

It is common to find that a Beneficiary will use Collateral Transfer facilities to either participate in trade positions where his returns are received prior to expiry of the bank guarantee, or for property development projects where liquidation or refinance of the bricks and mortar once construction is complete will serve as his exit strategy. This fairs well with these types of facilities and are preferred by Providers.

If you wish to discuss any details concerning these facilities, please do not hesitate contact us.

Bank guarantees are “tailor-made” transactions. One who is asked to provide a guarantee would therefore be well advised to discuss the matter first with a specialist who knows about the various regulations and practices in different jurisdictions. Robert J. Taylor & Co, United Kingdom is experts in arranging these instruments for clients, including leasing or lease bank guarantee facilities known as ‘collateral transfer’.

In many cases, it is the beneficiary who decides whether the instrument to be used should be a guarantee or a standby letter of credit. The specialist will then draft a guarantee that reflects the particular circumstances of the transaction and submit it to the client for approval. At the same time, the client will be asked to sign a letter of indemnity which states inter alia that the bank may charge the client’s account if a claim is made under the guarantee.

The bank will draft the guarantee in such a way as to protect the principal’s interests within the framework determined by the wishes of the beneficiary and the relevant regulations in the beneficiary’s country. The maximum liability (including principal, interest, charges, etc.) must be stated. It is also very important to specify a precise expiry date. Other provisions cover the procedure for making any claim.

Depending on the instructions communicated by the principal at the request of the beneficiary, the bank will either issue the guarantee itself (direct guarantee) or instruct a correspondent bank in the beneficiary’s country to do so on its behalf (indirect guarantee). A direct guarantee gives the principal more scope to influence the wording of the guarantee in accordance with its particular requirements.

In 1992, the International Chamber of Commerce (ICC) in Paris issued a new set of regulations titled “ICC Uniform Rules for Demand Guarantees” (ICC Publication no. 458). These rules were the product of a joint working group of representatives of the Commission on International Commercial Practice and the Commission on Banking Technique and Practice. The rules cover all types of guarantees and other payment undertakings under the terms of which the guarantor is obliged to make payment on presentation of a written demand and any other documents specified in the guarantee. While still applicable at the time, the previous “ICC Uniform Rules for Contract Guarantees” (ICC Publication no. 325) published in 1978 failed to gain general acceptance owing to confusion about the scope of their application. The regulations issued in 1992 largely correspond to current international practice and also take appropriate account of the interests of the various parties involved.

In July 2010 these rules were updated to ICC Publication no. 758. The main difference being that the underlying contract (the reason and purpose of the Guarantee) should form part of the Guarantee. It is this URDG ICC 758 protocol that is now current. It superseded ICC 458 which is no longer used.

Demand guarantees may be subjected to the new rules by including a simple statement to this effect in the guarantee agreement. To qualify as a demand guarantee, the guarantee document must not stipulate any conditions for payment other than the presentation of a written demand and any other specified documents. In particular, the guarantor must not be required to decide whether or not the beneficiary and principal have fulfilled their contractual obligations. Restrictions on entry into force – such as the receipt of a down payment – may nonetheless be imposed.

The rules are intended to balance the interests of the beneficiary with the principal’s wish for protection against unjustified claims. The beneficiary wishes to protect itself against the risk that the principal will not fulfill its contractual obligations.