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Overseas Loan Under Domestic Warranty
2021-12-14
(I) Product function
The clients provide counter-guarantee in the method of open credit extension or deposit, and apply to our Bank for issuing financing letter of guarantee to overseas banks, so as to provide principal and interest repayment warranty for overseas enterprises’ financing in overseas banks.
(II) Business characteristics
1. Financing purposes include working capital, trade financing, project financing, equity acquisition, replacement loans, dividends and payout, etc., supporting local and foreign currency financing;
2. Overseas financing capital may be repatriated in the form of creditor’s rights, or equity financing may be carried out by domestic institutions;
3. Assist overseas affiliates of multinational enterprises in financing and credit enhancement, facilitate clients to choose the best financing channels and reduce financial costs.
(III) Applicable objects
1. Enterprises which are required to obtain overseas credit extension support for the establishment of an entity to carry out overseas business activities;
2. Enterprises that wish to take advantage of lower overseas loan rates to reduce comprehensive financial costs;
3. Enterprises whose overseas debts are due and need to receive financing;
4. Overseas dividend sharing enterprises with reasonable tax avoidance needs.
(IV) Business procedure
1. The clients (domestic enterprises) submit materials to our Bank to apply for the limit of credit extension of the letter of guarantee, while overseas enterprises submit materials to overseas banks to apply for the limit of credit extension;
2. The clients (domestic enterprises) sign a letter of guarantee agreement with our Bank, and the overseas enterprises sign the loan contract with overseas banks;
3. The clients apply to our Bank for issuing a letter of guarantee and provide business application materials;
4. Our Bank issues a financing letter of guarantee to the outside;
5. Overseas banks make loans to overseas enterprises;
6. On the due date, the overseas enterprises will repay the principal and interest to the overseas banks and release the limit of the letter of guarantee of our Bank.
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