A Bond Facility is often a prerequisite for exporters/suppliers and companies providing goods or services to buyers in overseas or domestic markets. The Afreximbank bonding facility helps by providing bonds (guarantees) to support eligible export-related contracts and other services. It is common for a buyer to require their supplier to provide bonds (or guarantees) as part of a contract. We can either issue bonds directly to the buyer or provide a guarantee to the supplier’s bank who will issue the bonds.
Risks covered under Bonding facilities
Bonding Facilities cover counterparty risk including the unfair calling of the bond (or any related counter-guarantee).
Bid bonds provide a safeguard that the exporter is able, and will choose, to accept the award of a contract after a successful tender process. It assists such companies in bidding for large projects, operating licenses, prospecting licenses etc., which require that bid bonds be issued.
Advance Payment (Progress Payment) Bonds
Advance Payment bonds provide a safeguard that the exporter can perform the contract, or is able to return the advance payment, if the exporter is unable to perform the contract. It provides the importer/ buyer with security for their advance payment under an export-related contract.
Performance bonds provide a safeguard that the exporter/seller is able to perform the delivery or technical performance obligations defined in the agreed contract.