Bonds concerning LCs
Bonds concerning letters of credit opened by foreign banks
Banks confirming, discounting or postfinancing letters of credit opened by foreign banks may take advantage of our bonds securing their recovery of any amounts due. Our bonds and the takeover of transaction risk allows financial institutions to continue supporting their customers in their export business.
What are the conditions?
- The protection covers an extensive list of countries excluding EU Member States, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the USA.
- The letters of credit cover the export of Polish goods and services.
- The bonds pertain to the damages suffered by their beneficiary as a result of its debtor's failure to settle due payments within the deadline specified in the letter of credit or the postfinancing agreement, if the debtor's non-payment is caused by the materialisation of a commercial or political risk.
- The credit granted by the bank for the payment of amounts due resulting from the letter of credit in favour of the importer's bank must not exceed 2 years.
What are the benefits?
- Limiting the bank's risk related to short-term financing.
- Possibility to issue a bond for up to 100% of the amount of secured debt due to the bank.
- Fast –track procedure – bonds are issued in accordance with bank limits previously specified by KUKE.
- The bonds are irrevocable and payable on first demand.