Bonds, guarantees & standby LCs
Understanding bonds, guarantees & standby LCs
Course Outline
A practical guide to the nature and implications of using bonds, guarantees and standby letters of credit.
The workshop will provide attendees with a practical understanding of the nature, types, operation, risk implications, risk mitigation and considerations for their use.
The intermediate course also provides a detailed overview on the rules governing demand guarantees URDG758 and standby letters of credit (UCP600 and ISP98) and the opportunity for delegates to test their knowledge and participate in role play.
Duration
Entry level 1 day, intermediate level 2 days
Who Should Attend?
Companies, bankers, lawyers, and accountants.
The course is suitable for everyone involved in international trade – to include sales, finance, operations, administration, credit risk and compliance.
Course Content
- The nature of on demand and conditional guarantees, standby LCs and surety bonds
- Parties and operation of each
- Contractual and credit guarantees
- Impact on bank facilities and counter-indemnification
- Overview of the types to include:
- Bid bond
- Advance payment guarantee
- Performance bond
- Retention monies guarantee
- Standby LC (for trade)
- Standby LC (facilities guarantee) - Example wordings of each
- Detailed overview of the rules governing bonds & guarantees and standby LCs*
- Use of bonds Vs standby LCs*
- Governing law and implications for expiry
- Unfair calling*
- Pay or extend notices
- Cancellation
- Bank charges
- Practical case studies*
- Role play exercises*
Intermediate course only*
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