Issuing a Bank Guarantee

If Client intends to monetize or secure a credit line against Bank Guarantee that their bank have received (or due to receive), it is important to ensure that the Guarantee contains no onerous conditions and that it is worded specifically for monetizing. Draft Bank Guarantee wordings specifically used for securing credit lines can be downloaded from Downloads centre. These draft documents are accepted by mainstream banks for monetizing. Drawing credit lines against a Bank Guarantee that is conditional upon satisfaction of an action or other document may not be possible. For example, if you have a Conditional Payment Guarantee, a lending bank will not accept to activate a credit line because it cannot be considered as suitable security. Generally, the purpose and intent of a Bank Guarantee should be made clear from the outset. If your intention is to monetize or credit line the Guarantee, then the Guarantee should be specifically worded for this purpose. If it is not, then you may very well find the Guarantee is worthless. It would also be advisable to negotiate credit lines in advance of receiving the Guarantee. To provide draft wording or verbiage to a potential lender and obtain their consent.

Unique Funding Solution

Donend Financial Instruments Limited has adopted a unique funding solution where they can merge their Bank Guarantee through their issuers to Third party Lenders, who will receive guarantee and activate a secured Credit Line on behalf of Clients. Credit Line limits and conditions are negotiated with Lenders Bank and agreed prior to issuing Guarantees, to activate the Line.