A Surety Bond is a three-party agreement whereby the surety guarantees to the obligee (the project owner) that the principal (the contractor) is capable of performing the contract in accordance with the contract documents. Performance of the contract, which is the subject of the bond, determines the rights and obligations of the surety and the obligee.
Here are the nine different families of surety bonds:
- Fidelity Bonds
- Public Official Bonds
- Judicial Bonds
- Fiduciary Bonds
- License and Permit Bonds
- Contract Bonds (Bid and Performance Bonds)
- Miscellaneous and Federal Bonds
- Notary Bonds
- Financial Guarantee Bonds
FINANCIAL GUARANTEE BOND PROGRAM
Our Insurance Companies will consider executing financial guarantee instruments for asset-backed securities, private transactional financing and small national or local infrastructure projects. Financial guarantee (credit wraps) are offered on a fully collateralized basis only.
- *Minimum bond premium U.S. $25,000
- *Minimum due diligence fee U.S. $10,000
Financial Guarantee Bond Definition: A non-cancellable indemnity bond, backed by an insurance company, which guarantees that principal and interest will be paid in compliance with the underlying contractual agreement or promissory note.Financial guarantee bonds are used by debt issuers as a way of attracting investors. The guarantee provides said investors with an additional level of security that the investment will be repaid/obligation will be fulfilled in the event that the securities issuer is unable to do so. The bond may benefit the principal by enhancing the principal’s creditworthiness thereby lowering the cost of financing. The guarantee “wraps” the security/promissory note with the insurer’s indemnity. Because the bond represents an UNCONDITIONAL GUARANTEE of compliance/repayment, a preferred interest rate is often offered.
Want to see how much we can save you? Just request a quote to find out.