Corporate Guarantees received under leasing facility may be used by the Beneficiaries to secure lines of credit at their bank. Typically, a banker will have no objection to offering credit against Corporate Guarantees received in this manner up to 100% face value, however typical lending rates (loan to value (LTV)) will be around 50% to 80% of the face value.
If you intend to monetize or credit line a Corporate Guarantee that you have received or due to receive, It is important to ensure that the Guarantee contains no onerous conditions and that it is worded specifically for monetizing.
Drawing credit lines against a Corporate Guarantee that is conditional upon satisfaction of an action or other document may not be possible. For Example, if you have a conditional payment guarantee or rent guarantee, a lending bank will not accept to credit line it as it cannot be considered as suitable security. Generally, the purpose and intention of a Corporate Guarantee should be made clear from the outset, if your intention is to monetize or credit line the Guarantee, then the Guarantee should be specifically worded for this purpose.If it is not, then you may very well find the Guarantee is worthless.