What is a Corporate Guarantee?
A Corporate Guarantee is a new term like a Bank Guarantee and exclusively available with our providers where one Bank (Issuing Bank) issues an indemnity to another Bank (Beneficiary Bank) or directly to a Beneficiary, on behalf of its account holder. The Issuing Bank will expect its account holder to pledge assets to the bank for its issue.
Types of Corporate Guarantees
There are effectively two main types of Corporate Guarantees,
(1) A Direct Guarantee where the account holder instructs his bank to issue a Guarantee directly in favor of the Beneficiary, and
(2) An Indirect Guarantee where a second bank is requested to issue a Guarantee in return for a Counter-Guarantee. In this case the Issuing Bank will indemnify losses made by this second bank in the event of claim against the Guarantee.