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Important Documents and Payment Methods

A Ready, Willing, and Able Letter (RWA)

A Ready Willing and Able Letter (RWA Letter) is a bank instrument that verifies that a bank or financial institution is ready, willing, and able to proceed on behalf of a client in any number of various financial transactions. An RWA letter is usually sent from a buyer’s bank to the seller’s bank and is commonly sent together with a SWIFT MT-799. While an RWA letter is sometimes issued without a SWIFT message from bank to bank, it carries more weight for buyers and investors if it is sent in conjunction with a SWIFT MT-799. If an RWA Letter is required by itself and a SWIFT transaction is not required by the seller, a bank or trust can send a Ready, Willing, and Able Letter (RWA) by other less common means as requested by the seller or the seller’s bank. With this document, the bank confirms:

  • The asset is of good, clear, clean, and non-criminal origin.
  • The asset does not have any kind of external constraint.
  • The activity can be confirmed by SWIFT MT799–MT760
  • Bank Confirmation Letter (BCL)


A bank confirmation letter (BCL) is a letter from a bank or financial institution confirming the existence of a loan or line of credit that has been extended to a borrower. The letter officially vouches for the fact that the borrower—typically an individual, company, or organization is eligible to borrow a specified amount of funds for a specified purpose.
A bank confirmation letter’s purpose is to assure a third party, generally a seller, that the borrower has access to sufficient financial resources to complete a transaction, such as the purchase of goods. The confirmation letter—sometimes known as a comfort letter—is not a guarantee of payment but only an assurance of the borrower’s financial resources to make payment.

Bank confirmation letters typically require the signature of representatives of the bank or financial institution who are authorized to issue such correspondence.

Since a letter of confirmation is issued with regard to a particular transaction or project, it’s not transferable to a different transaction or project. If the bank’s customer decides to enter into a different deal or purchase, the customer is usually required to obtain a new letter of confirmation.

Standby Letter of Credit (SBLC) or (SLOC)

A standby letter of credit (SBLC) is a legal document that guarantees a bank’s commitment to pay a seller in the event that the buyer—or the bank’s client—defaults on the agreement. A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller is certain to receive payment.

SBLC is used to: (1) guarantee any failure to pay on the part of the purchaser or importer; and (2) guarantee any failure to perform the agreement on the part of the supplier or exporter. The SBLC is only used if what is agreed between the two parties is not performed or is performed incorrectly. Only the documents requested by the terms of the SBLC are taken into consideration. SBLCs are subject to the Uniform Customs and Practice for Documentary Credits (UCP). This means that where commercial documents have to be presented, the UCP sets out how they may be verified. An SBLC may also be confirmed, whereas a guarantee issued by the beneficiary’s bank requires a double commitment since the issuing bank has to counter-guarantee the guarantor bank. It is also known as a “non-performing letter of credit.”

Bank Guarantee (BG)

A formal lending institution guarantees that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. A bank guarantee enables the customer (debtor) to acquire goods, buy equipment, or draw down loans and thereby expand business activity.

A bank guarantee and a letter of credit are similar in many ways, but they are two different things. The main difference between the two credit security instruments is the position of the bank relative to the buyer and seller of a good, service, or basket of goods or services in the event of the buyer’s default of payment. A bank guarantee is a guarantee made by a bank on behalf of a customer (usually an established corporate customer) should it fail to deliver the payment, essentially making the bank a co-signer for one of its customers purchases. Should the bank accept that its customer has sufficient funds or credit to authorize the guarantee, it will approve it.

A guarantee is a written contract stating that in the event of the borrower being unable or unwilling to pay the debt to a merchant, the bank will act as a guarantor and pay its client’s debt to the merchant. The initial claim is still settled primarily against the bank’s client and not the bank itself. Should the client default, then the bank agrees in the bank guarantee to pay for its client’s debts.

IMFPA

An irrevocable master fee protection agreement (IMFPA) is generally applied to an over-the-counter commodity transaction. It is an irrevocable and binding legal agreement between a buyer, a seller, and a business broker.

In an IMFPA, the objective is to reach a private agreement for the placement or purchase of a commodity or other piece of merchandise that has been clearly identified and negotiated in bulk. The buyer or seller offers a private business broker a fee (either a fixed sum or a percentage) for arranging the transaction. The fee is only paid if and when the transaction is completed. The commission and when it will be paid are determined by the aforementioned fee agreement. Usually, the fees are automatically transferred from the buyer’s bank account to the business broker when the buyer pays for the product.

Important Document and Banking Instruments

Oil and gas deals involve highly complex transactions spanning exploration, production, or midstream infrastructure. Depending on the deal type, key
documents include Confidentiality Agreements (NDAs), Letters of Intent (LOIs), Sale and Purchase Agreements (SPAs), Joint Operating
Agreements (JOAs), and Facility or Sales Contracts.

Preliminary & Transactional Documents

  • Confidentiality Agreement (NDA): Protects sensitive seismic, financial, and geological data before serious negotiations begin.
  • Letter of Intent (LOI) / Term Sheet: Outlines the proposed structure, preliminary valuation, and exclusivity terms of the deal.
  • Sale and Purchase Agreements (SPA): The definitive contract detailing purchase price, representations, warranties, indemnities, and defect mechanisms.

Important Document/Information

  1. Letter of Intent (LOI)
  2. Irrevocable Corporate Purchase Order (ICPO)
  3. Corporate or Company profile.
  4. Company registration certificate.
  5. Buyer’s or client’s information sheet (CIS)
  6. Know your customer (KYC)
  7. Company name registered office address, fax, web address, e-mail, phone, mobile, etc.
  8. Banking information
  9. Port of discharge (POD).
  10. Types of products, volume, quantity etc.
  11. Proof of funds showing that the buyer is capable; in this case, we accept BCL and RWA.
    Proof of funds (POF) shows that the buyer is capable.

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