Back to Back Guarantees

Stephen A. Jones ()
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Stephen A. Jones: AXS Trade Finance Ltd.

Chapter 10 in The Trade and Receivables Finance Companion, 2019, pp 131-148 from Springer

Abstract: Abstract In this chapter we examine a middle-party’s requirement for the issuance of demand guarantees, the nature of the resultant risk exposure for them and their bank, and how the transaction can be structured to mitigate risk. A variety of solutions are described for the middle-party’s bank to include back to back guarantees, assignment of proceeds and the use of transferable guarantees. The importance of considering the bigger picture is highlighted with regard to both risk and opportunity before issuing guarantees.

Keywords: Advance payment guarantee; Assignment of proceeds; Credit facility; Letter of credit; Middle-party; Operative clause; Performance guarantee; Transferable guarantee; Variation in amount clause (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-25139-0_10

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DOI: 10.1007/978-3-030-25139-0_10

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