MG CAPITAL GROUP INC. | PRIVATE FINANCIAL CONSULTING SERVICES - MG CAPITAL BLOG , Bank InstrumentsMG CAPITAL GROUP INC. | PRIVATE FINANCIAL CONSULTING SERVICES - MG CAPITAL BLOG , Bank Instrumentshttps://www.mgcapitalgroupinc.com/blogs/bank-instrumentsFri, 12 Dec 2025 03:00:54 -0800http://zoho.com/sites/<![CDATA[How to get Bank Papers/Instruments/Securities Programs]]>https://www.mgcapitalgroupinc.com/blogs/post/Get-bank-instrumentsA Guarantee is a distinct promise to pay and is not dependent on the principal obligation. The guarantor (the bank) may not raise any objections or defenses based on the underlying transaction.]]>
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Obtaining and Issuing -
Bank Papers/Instruments/Securities Programs

A Guarantee is a distinct promise to pay and is not dependent on the principal obligation. The guarantor (the bank) may not raise any objections or defenses based on the underlying transaction. This means the guarantor pays upon the first written demand (claim) on the part of the beneficiary, i.e. on the presentation of the confirmation specified in the guarantee text and any required documents. The standard wording used by banks in individual cases either complies with the local legal framework or the policies of the International Chamber of Commerce (ICC). Uniform Rules for Demand Guarantees and Bank Guarantees (URDG 758), and Uniform Customs and Practice for Documentary Credits and Standby Letter of Credit (UCP 600). The URDG 758 and UCP 600, Their wording is based on the internationally recognized issued by the ICC.


This service designed for clients who want to funds their projects like export/import business, leverage equity funds, trade companies, Manufacturing companies, and more.  those securities issued to the clients can be obtained by several methods:


Types of Bank Guarantee


* Standby Letter of Credit (SBLC).

* Demand Guarantees (DG).

* Bank Guarantees (BG).


We, MG Capital obtain and issue the instruments from 15 Top Banks.


Obtaining a Licensing of the instruments. This bank instrument is full CASH BACKED as Collateral opened by the Provider for the benefit of the Beneficial(Client) or Monetizer.


*** Fifteen days before the maturity the Client can renew or return the bank paper-free, clean and clear without any lien.

*** if the clients bank don’t agree to issue the RWA/BCL, the client can deposit the fee’s in the Escrow IOLTA account.


There are three (3) ways you can get the Bank Instrument issued :-

1. All fees will deposit with Escrow IOLTA under the Term Sheet and Escrow agreement.


Issuing send swift MT799 pre-advice.

Client’s Bank sends swift MT799 RWA to receive the said instrument.  


The issuing bank sends swift MT760.



2. Registration bank fee 2% to Escrow IOLTA under the Term Sheet and Escrow agreement.


After registration of the file with the issuer bank, the issuer bank sends swift MT799 pre-advice.


Client’s Bank sends swift MT799 – BPU – balance to escrow IOLTA.  


Issuer bank sends the MT760.


Payment within 5 bank days via MT103.


3. Combination Leverage and issuing SBLC.


Cost about 6%-7% under the Term Sheet and Escrow agreement.


First step the process of the Leverage Debt.  


Within 30 bank days, we issue the said SBLC.


Issuing send swift MT799 pre-advice.


Client’s Bank sends swift MT799 RWA to receive the said instrument.  

The issuing bank sends swift MT760.


----------------------------

Issuing Deferred Purchase/Acquisitions of instruments. This instrument is full CASH BACKED and comes with the Title Owner of the Beneficial(Client).


*** Fifteen days before maturity the client has three options: the first is to purchase the instrument, the second is to renew the instrument (total renews up to 3 years). In the event that the client does not purchase or renew the instrument, the bank endorses and return the bank paper-free, clean and clear without any lien.


In order to get a term sheet of obtaining Bank papers, the following documents need to be submitted for review and due diligence:


  1. Application/Letter of Request.
  2. KYC on Corporations letterhead.


Once the full package submitted, the M.G Capital Compliance to review, within about five business days, on green lite and decided to continue the process, the client accepts the offer of service, the procedure, and schedules for performance.

Procedures Outline:


  1. The Provider responds with a delivery of a non-binding Term Sheet.
  2. After the client reviewed the Term Sheet and shared with his bank, which must be signed and if possible stamped as “Acknowledgment” by the bank.
  3. The process is a bank to bank basis (DVP settlement).



*** In heaven forbid which were allegedly forging documents or attempt of fraud, the company is obligated under law to notify the authorities, which could result in a criminal investigation as well as entry to the blacklist.


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]]>Fri, 12 Feb 2021 17:05:33 -0500<![CDATA[UNDERSTANDING BANK INSTRUMENTS]]>https://www.mgcapitalgroupinc.com/blogs/post/UNDERSTANDING-BANK-INSTRUMENTSWith so many people trying to broker private placement programs and bank instrument sales, we felt that it was critical to outline the entire process from instrument creation to maturity.]]>

Understanding Bank Instruments- From Bank to End Investor

With so many people trying to broker private placement programs and bank instrument sales, we felt that it was critical to outline the entire process from instrument creation to maturity.

To truly understand the purpose and functions of bank instruments, we must first define what a bank instrument in fact is.  By definition, bank instruments are asset backed notes issued by a bank to an investor which mature over 5-10 years, collecting an annual coupon (“interest”) until it matures at its pre-defined value.

For those who don’t understand why debt instruments, bonds, or notes are created, let’s explain it all in 2 sentences:

Companies, or in our case banks, create paper notes (“IOU’s”) which they sell to investors, guaranteeing a certain annual interest and maturity value.  This allows the investor to collect their expected profit, while the bank accesses immediate cash to meet capital requirements for additional financing opportunities.

Unlike its boring cousins (bonds), the bank instrument is rather complex, and is typically referred to as a “hybrid note”.  Unique amongst most debit financing notes, bank instruments: collect high annual interest rates, are backed by top rated banks, and are issued ONLY in amounts of 50 Million EURO or greater. Though those are intriguing qualities, the key is: bank instruments can be purchased at a discount from face value, and traded to investors in the secondary market.

Since we understand this topic is rather complex, we created a 5 step summary to clarify the details of how bank instruments evolve. This will explain the relation of bank instruments to private placement programs, and the investment benefits to purchasing bank notes.

Bank Instrument Steps to Maturation

1. Once the investor or trader has been cleared through compliance, the issuing bank will “cut”/create an instrument (Medium Term Note or Bank Guarantee), naming the investor or trader as the sole beneficiary.  This instrument will have a predefined interest rate (0-7.5%/yr.), and a value on the date of its maturity. At this point, the purchaser would more than likely pay a discounted rate to the issuing bank, ranging from 60-90% of face value, depending on their relationships and the instrument’s size.

2. If the investor chooses to hold the note, they just collect interest and exercise the value upon maturity.  If the initial purchaser was a “trader”, they would have a pre-defined “exit buyer” to buy the note at a higher value (ex. Trader buy at 65, sell at 74).  As you can see with spreads like that, if the trader can consistently access instruments, they can organize a very profitable private placement program.

3. Once the first purchaser has purchased the note, they will usually resell it to another buyer at a higher price.  Though the buyer isn’t purchasing the note directly from the bank, many private placement programs are run by middlemen who fit right here in the process. Usually, they will purchase the note, and make a profit similar to what was made off of them (ex. Buy at 74, sell at 81). People in this position are usually high net worth individuals, large corporations, hedge funds, etc.

4. The final middle man repeats the process the others have done, but they look for a different type of buyer. In this case, the note has been traded several times, and is at a smaller discount than it originally was. For many that may not be appealing, but for for some that seems intriguing and less “risky”. Since everyone can verify the instrument has been owned by several companies (“seasoned”), institutional buyers such as pension funds, hedge funds, mutual funds, and other low risk ventures flock for security and higher yields.  As expected, the final middle man usually sells the note to an institutional buyer for a profit similar to what was made off of them (ex. Buy at 81, sell at 90).

5. The final purchaser holds the note, collecting the difference between the discount they paid vs. face value, and the annual interest until the time of its maturity.

Though the information above is accurate, the spreads per trade may vary depending upon a number of variables.  To state the obvious, different traders, banks, relationships, and strategies can make prices/profits fluctuate.

Now that you have gotten a true understanding of what a bank instrument is, as well as its various purposes, it’s time to do some more exploring through our related articles. Expanding your knowledge base can only speed up your path to success!


]]>Wed, 02 Sep 2020 18:01:31 -0400<![CDATA[Leasing Bank Instrument]]>https://www.mgcapitalgroupinc.com/blogs/post/LEASING-BANK-INSTRUMENTSBy definition, “leasing bank instruments” involves borrowing an MTN or BG for the purpose of proving temporary collateral.]]>

Leasing Bank Papers

By definition, “leasing bank instruments” involves borrowing an MTN or BG for the purpose of proving temporary collateral. Once the lessee receives the bank instrument, they can prove these assets for the opportunity they have chosen. In most cases, investors attempt to use a leased bank guarantee to finance projects, attain loans, or enter in private placement investments. Though this sounds great from the pitch of a greedy broker, the reality is, investors rarely succeed.


Over the last decade, bank instrument leasing has evolved from an extreme rarity to a rapidly growing industry.  You may say, “Isn’t this good for both investors and brokers?” Well, bank instrument leasing can definitely be good for the brokers, but for investors, it can be the exact opposite.  The reality is, when you lease bank instruments, you will NEVER have full control over the asset.  Think about, if you owned a 500M note, would you let an investor put it at risk for 3% (15M). I don’t think so! Even if you get an MT 760 to your account, the leased funds are blocked. Though leased bank instruments can prove temporary collateral, you can NEVER lien, block, or assign leased funds to another person. This is the part most leased instrument providers fail to mention, leaving their pockets fatter in the midst of your failure.

Even though we have warned our readers, we know some of you will still choose to lease bank instruments. For those who pursue bank instrument leasing, please be safe and extremely cautious. There is no risk in assessing leased instrument providers, but always remember what you have learned here before making a decision. For more information on leased bank instruments, take a look at the articles in the private placement category of our blog. This will teach you the facts of leased bank instruments, and far more.

]]>Wed, 02 Sep 2020 12:34:33 -0400<![CDATA[LTN Information]]>https://www.mgcapitalgroupinc.com/blogs/post/ltn-informationIf you have Series H, J, K, L, M, R or Z Series Letras do Tesouro Nacional (LTNs) that are repactuated and fully and legally registered with the Central Bank of Brazil, then the information below should be of interest to you.]]>
Submit LTN Enquiry

Important Notices: 
As indicated in the LTN information presented elsewhere in this website, we no longer required to obtain "current" BCB Transport Authorizations and proof of "current" GRU payments before submitting a file to the program for registration. The new requirements are presented below. Also, please ensure that any package you send to MG Capital has current front and back photos of the physical LTN(s). 

Our History with LTN's

Since 2013 the MG Capital Group (MGCG) LTN Team with help of its partners has evaluated and tested over a 100 different LTN Trade and/or Sale Programs (programas letras do tesouro nacional). Most of these programs were not worth the paper upon which they were written. As every bond owner knows, navigating the processes required to complete an LTN transaction is very complex and difficult. Recurring events such as inconsistent guidelines from the Central Bank of Brazil (BCB), untimely downgrading of Brazil's government debt by credit-rating agencies, turmoil in the financial markets related to AML legislation and BASEL III banking requirements have created an environment that required LTN programs to undergo restructuring, often multiple times. And when this is combined with unprofessional behavior from uninformed or less than ethical "online brokers," life in the LTN arena has been challenging. 

We assist in

In 2016 our team narrowed its focus to 3 programs that we felt were truly credible and worthy of consideration. Even these programs have faced their share of painful program restructuring and delays. Even though none of those programs has performed yet, through these past difficult years MGCG experienced steady growth in our list of patient LTN bond owners--bond owners that we believe will soon be richly rewarded for their patience. In 2017 our focus was centered on just 2 LTN programs, programs that we have followed closely for over 3 years. We have strong faith in the principals behind both of these programs. 

In 2018, we announced our very high confidence in an LTN purchase program that uses a transaction process that has kept pace with the ever-changing and challenging issues associated with selling LTN bonds. This program is on the verge of demonstrating performance and we urge our bond owner clients to take note of it immediately and to carefully consider submitting some of their bonds to the queue that is just starting to develop.

In 2019, despite unexpected delays encountered since mid-2018 that have hindered this LTN program's purchasing activity, we maintain our very high confidence that this program will be the first (and perhaps only) LTN program to perform. This is the only program we know of that uses a transaction process that has kept pace with the ever-changing and challenging issues associated with selling LTN bonds. We expect program performance soon and we urge our bond owner clients to carefully consider submitting at least some of their bonds to the queue that has been steadily growing in length. We now have over 95 LTN packages officially submitted to this purchase program and we expect first purchases to occur in 2020.

If you have Series H, J, K, L, M, R or Z Series Letras do Tesouro Nacional (LTNs) that are repactuated and fully and legally registered with the Central Bank of Brazil, then the information below should be of interest to you--and you may want to consider having MGCG Services enter your bonds (or your client's bonds) into this program's queue. This LTN purchase program gives highest priority to bond portfolios that contain H-series bonds followed by M-series and R-series bond portfolios. Next priority is given to all other series bonds except Z-series bonds, which are prioritized last because of the fraudulent activity frequently associated with Z-series bonds.

Purchase Program available
 to bond owners who are able to present eligible bond portfolios, this LTN purchase program provides access to institutional LTN buyers willing to provide sale proceeds equal to approximately 18% of the LTN's future value (PU+),  At no up-front cost. This represents a price that will range from approximately  gross to the bond owner for an  $300M - $400M USD bond (depending on the maturity PU value of the bond and a BRL/USD exchange rate of .185), with correspondingly higher prices for higher value bonds. While this LTN purchase program has institutional buyers willing to buy any LTN bond series,  H-Series bond (depending on the maturity PU value of the bond and a BRL/USD exchange rate of .185), with correspondingly higher prices for higher value bonds. While this LTN purchase program has institutional buyers willing to buy any LTN bond series, 
the Program Manager reports greater initial demand for H-series and M-series bonds.   

Priority of our services

Recognizing that larger bond portfolios are frequently more attractive to Buyers, it should be noted that the priorities of this LTN purchase program are currently:
  • Priority #1: processing H-series (the highest demand bond series) and M-series  
  • Priority #2: processing bond portfolios containing: R-series, J-series, K-series, L-series bonds.  
  • Priority #3: processing Z-series bond portfolios. 

Criteria for receiving LTN program assistance from us:

    • MGCG will work with the consultant or the legal representative of the bond owner* for the purpose of receiving and processing required bond documents.
    • Direct access to the LTN owner must be available when required by the purchase program. 
    • The bond portfolio must contain:
      •           - CIS & PP from bond owner (full KYC documents are not required)
                - Bonds titled in the name of the CIS Applicant
                - STN bond documents actualized (updated) in 2017 - 2020
                - The most recent BCB or STN Transport Authorization  (even if bonds are outside Brazil)
                - The most recent GRU & Tax Receipts showing that taxes have been paid on the bonds
                - Corporate Resolution signed by the President and Signatory  (if the CIS is from a corporate entity) 
      • Other items that are helpful (if available) but not required are:​
                - STN black screen pages produced in 2017 - 2020 
                - Screen shots of the complete 21-page Euroclear file dated within the last 30 days. 
      • Upon receipt of all required bond documentation, MGCG will provide a Bond Package Summary & Genealogy document to obtain the information necessary to prepare a Profit Share Agreement (PSA) between MGCG and the Bond Owner. 
      • The final item required by MGCG prior to package submission to the LTN Purchase Program is the PSA, signed and notarized by the Bond Owner and MGCG. (The PSA will ensure that all eligible consultants will be compensated.)

      To receive LTN assistance from us: If your bond portfolio meets the criteria listed above, we invite you to submit general information about your bond portfolio using our online LTN Information Form. Upon an acceptable review of your LTN Information Form we will communicate back to you and arrange to send you a Program Overview of the LTN program mentioned above as well as other important documents needed to proceed.

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