Leasing is not also a correct term to use as it is not possible to actually lease a corporate guarantee in this manner. It is another misnomer. But to make the people understand, we are also continuing this word. Actual term for this leasing is a “Transfer of a Corporate Guarantee”.
The bank will charge the asset and will raise a bank indemnity against it in favor of the Beneficiary. This bank indemnity will commonly be in the form of a Corporate Guarantee issued specifically for the purpose to the Beneficiary.
Transfer of Corporate Guarantee is the provision of assets from one party (The Provider) to another party (The Beneficiary) under a Transfer Agreement which will be called as Deed of Agreement (DOA). The Provider will effectively ‘lease’ his assets to the Beneficiary for a given term for a ‘rental.
Typically, the term of ‘lease’ would be 1 year but can often be as long as 3 or 5 years, depending on the willingness of the Provider.