Foreign Guarantees

Guarantees Contractual Obligation Irrevocable Obligation Sum of Money Non-performance

Target Regularly Tender for Business Construction and Engineering Companies Cross-Border Guarantees

Types of Guarantees Bid/Tender Bond Performance Guarantees Surety Bonds Advance Payment Guarantees Facility Guarantee Payment Guarantee Standby Letter of Credit Retention Money Guarantee

Bid Bonds Ensure Non Withdrawal Condition of Permission to Tender 2% - 10% of Contract Value

Performance Bonds Underwrite Contractor’s Performance Indicates Contractor’s Creditworthiness 5% - 10% of Contract Value

Advance Payments Working Capital 10% - 20% of Contract Value Undertaking Given to Refund Amount Prepaid

Gives Credence to Customer’s Capability to Fulfil Obligations Benefits Reputable RSA Banks Accepted Worldwide Favourable Terms

Considerations Credit Limit Required Payable on Demand Bank: – Not Obliged to Examine Validity – Legally Obliged to Pay