Pre-shipment Finance

Pre-export Finance

Depending on the conditions, bank guarantees can include bid bonds, performance bonds, and advance payment guarantees.

Pre-export Finance is covered by guarantees of the Bank or prime banks to secure obligations under the export contract.

Such guarantees include:

• Performance Bonds which secure payment of the guaranteed amount to the purchaser or customer (beneficiary), if the supplier (principal) fails to perform under the contract.
• Advance Payment Guarantees which secure reimbursement of the advance payment covering a part of producer's feedstock and material costs if the seller fails to perform under contract.
• Bid Bonds which are necessary at open international bidding when participating exporters are requested to cover their bids by bank guarantees.
  Bid bonds secure payment of a certain amount to the bidding organizer if:
  
  • the bidder revokes its bid before expiry date
  • the bidder refuses to accept the order (sign the agreement)
  • the bid bond is not replaced with a performance bond after the agreement is signed
• Stand-by Letters of Credit which are primarily used instead of a bid bond, performance bond, advance payment or payment guarantee. It secures payment in case a third party fails to perform under a contract.

Standard Terms

Guarantee terms and conditions are determined individually for each transaction.

Contacts in Structured and Trade Finance Department:

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