The Bank Guarantee (BG) means a Bank/Lending Institution ensures that the liabilities of a debtor will be met. In other words, a BG is a collateral facility which can be used to guarantee the supplier in commercial transaction (import-export), to improve up the project financing structure bringing it to a bankability stage, drawn down a loan or simply to trigger a credit line from the Bank. If the debtor fails to settle the debt, the bank will cover it.
Banks typically use ‘direct’ guarantees, issued directly to the beneficiary. Direct guarantees apply when the bank’s security does not rely on the existence, validity and enforceability of the main obligation.
A Bank Guarantee (BG) can be used also to raise funds through a so called non-recourse loan. A non-recourse loan can be structured with Monetization option only or the Owner/Lessee can have the opportunity to be accepted on Trade which is managed on a Private Placement basis and which normally runs for 10 Months.
What you can to do, if you are interested to become the Beneficiary of a Bank Guarantee, is to read our page (updated time-by-time) were you can choose the transaction procedure that best suite according your needs and requirements.
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