Issuance of Bank Guarantees

By issuing a bank guarantee UniCredit Bulbank undertakes an irrevocable obligation to pay a specified amount of money if the Beneficiary under the guarantee declares non fulfilment of the contractual obligations. The bank guarantee can be used as a protection instrument against breach or non-payment under trade contracts.

Advantages

  • Helping you to create stronger business relationships by giving your customers and suppliers the security of knowing that payments are guaranteed
  • Proving your financial credibility while guaranteeing your ability to meet contractual obligations
  • Giving you the reassurance of a secure, globally recognized method of settling overseas and domestic trade

Whom is it Suitable for?

For all companies which are required to ensure a safeguarding tool in favor of their counterparties in the frame of business negotiations or according to legislative regulations of the activity.

These companies may be buying or selling goods, participating in tenders or having other commitments towards the beneficiary under the guarantee.

 

How to Apply for the Service?

Please, approach our Trade Finance Advisory Team to receive:

  • Framework agreement for the issuance of bank guarantees, counter guarantees and standby letters of credit.
  • Application for issuance of a bank guarantee.
  • Draft text of the type of the guarantee to be issued.

Before signing and presenting the above documents for issuance, we kindly recommend you to discuss the deal with our Trade Finance Advisory Team.


Important: When applying for issuance of a bank guarantee, you should note that the Beneficiary under the guarantee declares your non-performance. The bank's obligation is irrevocable and unconditional and does not bind the bank with the actual performance under the underlying contract.

The issuance of bank guarantees is internationally regulated by the Uniform Rules for Demand Guarantees of ICC Paris. Their latest revision is from 2010, Publ. No 758.

Frequently Asked Questions

According to the type of underlying obligations being secured:

  • Tender guarantee /bid bond: to ensure against the bidder's withdrawal of the bid after being awarded or not concluding the contract assigned, 
  • Performance guarantee: for ensuring performance/fulfilling conditions of the contract,
  • Payment guarantee: secures payment in favor of a seller or a landlord according to the agreed terms,
  • Advance payment guarantee: ensures refund of an advance payment made in case of non-performance of obligations under the underlying contract,
  • Other types of bank guarantees: warranty guarantee, loan guarantee, customs guarantee etc. 

Unlike letters of credit, bank guarantees are not a payment but a security instrument.

No. Unlike letters of credit, bank guarantees are not subject to confirmation. In some countries 'confirmation' of a bank guarantee is used to describe the Issuance of a bank guarantee against a Counter guarantee received by another bank.

Yes, upon all parties consent and when the guarantee is:

  • Issued subject to the Uniform Rules for Demand Guarantees, Version 758, Revision 2010,
  • Is expressly marked as transferable,
  • All the rights and obligations under the underlying relationship for which the Guarantee is issued have been transferred to a new beneficiary under the guarantee.

Bulbank Online Trade Finance Module

Trade Finance module as a part of Bulbank Online is a new functionality for accepting corporate clients’ orders and processing trade finance deals.

The new platform has been developed to ease and speed up the communication, processing and access to real-time information regarding bank guarantees, Letters of credit and Documentary collections by using the advantages of the online tool.

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