Professional Service. Term sheet prepared September 2025. SBLC issuance is subject to bank underwriting and approval.
Standby Letter of Credit (SBLC) Term Sheet
Arrange issuance of Standby Letters of Credit under ISP98 or UCP 600. Structures include performance standby, bid standby, advance payment standby, and financial standby. Optional confirmation can transfer risk to a confirming bank. Margin financing for applicants can be arranged separately, subject to underwriting.
Use Cases
Support contract performance, bid obligations, advance payment security, or financial payment undertakings. SBLCs provide an irrevocable bank undertaking callable on presentation of specified documents.
Issuing Bank Categories
Investment-grade international banks, established regional commercial banks, and specialist trade correspondents with tested standby desks and SWIFT capability.
Margin Financing
Applicants that need cash margin may request structured private credit or borrowing base solutions. Separate approvals, covenants, and controls apply.
| Indicative SBLC Term Sheet | ||
|---|---|---|
| Item | Term | Comment |
| Applicant | Corporate buyer, project company, or contractor with audited accounts | Minimum turnover and track record assessed at intake |
| Instrument | Irrevocable Standby Letter of Credit | Governed by ISP98 by default or UCP 600 if specified |
| Standby Type | Performance, Bid, Advance Payment, Financial | Drawing conditions tailored to the underlying obligation |
| Face Value | Deal dependent | Confirmed after bank underwriting |
| Tenor | Up to 12 months, extendable or evergreen by agreement | Auto-extension clauses considered case by case |
| Availability | Single transaction or facility-based issuance | Reinstatement and aggregate limits negotiated |
| Confirmation | Optional confirmation by a second bank | Used to mitigate issuing bank or country risk |
| Cash Margin | % of SBLC face value, deal specific | Margin finance available for eligible applicants |
| Collateral & Controls | Assignment of proceeds where applicable, escrow waterfalls, negative pledge, covenants | Insurance or performance securities if relevant to the underlying contract |
| Fees & Pricing | Issuance and confirmation fees set by banks | Arrangement and underwriting fees — request a quote |
| Documentation | Underlying contract or tender docs, standby text, corporate approvals, legal opinions if required | Full KYC, AML, and sanctions clearance for all parties |
| Conditions Precedent | Executed agreements, funded or financed margin, accepted standby wording | All control mechanics in place prior to issuance |
| Governing Rules & Law | ISP98 or UCP 600; facility law and dispute forum specified | Local counsel opinions where required |
Process And Timeline
Submit summary of the underlying obligation, draft standby wording, counterparty details, and requested amount and tenor. Preliminary KYC and sanctions screening conducted.
Provide audited financials, corporate documents, underlying contract or tender package, security arrangements, and any performance insurance terms.
Receive an indicative SBLC term sheet with proposed structure, governing rules, bank categories, fees, tenor guidance, and margin requirement. Arrangement fee: request a quote.
Issuing bank reviews credit profile, limits, corridor, and standby text. If requested, a confirming bank assesses confirmation appetite.
If cash margin is required, applicant funds it directly or applies for structured margin financing. Separate approvals, covenants, and reporting apply.
Finalize standby wording, drawing conditions, expiry terms, auto-extension clauses, and any required legal opinions. Align covenants and controls.
Issuing bank releases the SBLC via SWIFT. Advising bank authenticates and notifies the beneficiary.
Confirming bank adds its irrevocable undertaking to honor drawings that meet the standby terms.
Track covenant compliance, expiry dates, extension options, and any amendments. Provide periodic reporting as required by facility documents.
On successful performance, SBLC expires or is canceled. If a default event occurs and documents comply, drawing is honored per rules and terms.
Confirm release or settlement, record amendments, and provide final reporting for audit and covenant purposes.
Request Your SBLC Term Sheet
Upload your draft standby text and underlying contract details. We align wording with ISP98 or UCP 600, select credible issuing and confirming banks, and arrange margin financing where eligible. Underwriting and arrangement fees are quoted after review.
Start Your SBLC RequestDisclaimer. This term sheet is indicative. Final issuance and confirmation terms are determined by banks following credit approval. Any margin financing is a separate facility subject to its own underwriting. Documentation quality and control mechanics influence pricing, eligibility, and capacity.
