BANK INSTRUMENT MONETIZATION
Bank instruments — Medium Term Notes (MTN), Bank Guarantees (BG), Standby Letters of Credit (SBLC) and banker's drafts, among others — are monetized by blocking the instrument on behalf of a recourse or non-recourse lender, typically for a year and a day. Magister Operis has direct access to bank-instrument monetization sources.
How the Eleven Items Apply
The eleven pre-compliance items make a deal bankable whatever the asset. For a bank instrument, these are the particulars:
- The issuing bank's confirmation of the instrument: issuer, face value, maturity, reference or ISIN, and owner (item 3: Proof of Ownership)
- The bank that will block the instrument toward the monetizing bank under its own banking responsibility (item 9: Banking Relationships)
Owned and Seasoned
Two questions decide most bank-instrument files before anything else is read:
| Question | Where it is answered |
|---|---|
| Is the instrument owned outright, or leased? | Leased Instruments |
| Is it a new issue or seasoned paper? | New Issue vs. Seasoned Paper |
First impressions are formed by the documents. The eleven pre-compliance items, the monetization workflow, and three ways to get the paperwork right — prepare it yourself, engage a professional, or retain Magister Operis — apply to every asset class: Monetization & Trading.
Every engagement is governed by the firm's Method and Disclaimer; intermediaries should also review Broker 101 and the firm's Due Diligence standards.