Credit Enhancements are necessary in certain situations where project developers or borrowers do not have the necessary credit rating, assets or equity capital to secure suitable financing from commercial banks and the mainstream capital markets.

 

CAPITAL CORP and it's financial partners can provide a solution for this problem for select qualified transactions. 

 

We are in select cases able to arrange for a credit enhancement or financial guarantee product to be underwritten and issued from a rated commercial bank, financial institution, government agencies or insurance company that can be used to secure repayment of financing.   

 

Most commonly the form of a credit enhancement used is a stand by letter of credit, however in some situations other forms are utilized to meet the needs and requirements of the borrower which is more common in international transactions.

 

These companies may be willing to guarantee repayment of the loan and interest to the lender if the borrower becomes unable to service the loan and goes into default with the lending bank.  These types of loan guarantees typically require payment of certain fees similar to an interest rate on a loan, and the guarantor may in certain circumstances also require equity in the borrower's company based on the potential risk involved with guaranteeing repayment of a financial obligation should the borrower be unable to meet its obligation to the lender.

 

The preference is for companies who have or can obtain a lending facility with their bank because we are then able to structure a specific type of credit enhancement product specifically for the interested lending bank's requirements to ensure that we are able to secure the transaction to the bank's complete satisfaction.

  

How to Proceed:

Potential clients need to submit an executive summary to the business plan.

Upon review, if interested, a complete and detailed business plan and additional documentation will be requested.