We do appreciate your help to work out these SBLC amendment. We understand from the call that MINT sees that SBLC should be covering the principal and not the interest and would like us to consider again which I did. However, our Risk Control unit in China informs us that from regulatory point-of-view they define exposure to be Principal + Accrued interest. It was never this issue because we used to have the full SBLC opened now that it converts to one-by-one SBLC vs. PN - the interest exposure is left uncovered for regulatory reporting purpose.
As discussed, we would like to work with you in China and agree to make sure that MINT is not impacted cost-wise. These 3 amendments will not have cost incurred to you. And the going-forward SBLC cost will be 48 bps (instead of 50 bps). Below is to demonstrate that this new pricing will be a saving for MINT. (comparison of 50 bps at flat notional vs. 48 bps at P+I)
Once again, please accept our apology for inconvenience caused. There is not in anyway our intention to inflate the notional of SBLC. It is a operation/regulatory-driven.
Please let me know if there is any further question on this request.