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Surety Bond (STB)

A deposit to participate and execute your public and private contracts

The Surety Bond (STB) is a full range of guarantees for your public and private tenders participation – Export Trading & Cooperation to enable you to respond to public or private calls for tenders and to secure your markets. The instrument implemented for this is the stand-by letter of credit. It is implemented in the form of: bid bond, advance payment bond, retention bond, performance bond or subcontractor payment bond.

Our observation

Many small and medium-sized enterprises (SMEs) frequently find themselves having to give up applying for tenders due to a lack of cash. Regulatory or contractual obligations are difficult for them to meet and it is the commercial relationship that suffers.
ETC – Export trading & cooperation, offers a full range of guarantees to allow these SMEs to access public and private tenders with complete peace of mind.

What is the Surety Bond (STB)?

A deposit to participate and execute your public and private contracts

The Surety Bond (STB) is a full range of guarantees for your public and private tenders offered by ETC – Export Trading & Cooperation to enable you to respond to public or private calls for tenders and to secure your markets.
The instrument implemented for this is the stand-by letter of credit. It is implemented in the form of: bid bond, advance payment bond, retention bond, performance bond or subcontractor payment bond.
The Surety Bond enables the Bidder to meet the eligibility and financial capacity criteria required by the Project Owner. It can be delivered in several forms:

  • bond/bid bond, which allows a company to bid on a call for tenders;
  • surety/guarantee for the return of a deposit or start-up advance (Advance Payment Bond), which in the event of the award of the contract allows the tendering company to finance the launch of the works;

Who can benefit from the Surety Bond (STB)?

  • A construction, building, finishing, public works company
  • An industrial company
  • Any type of company participating in public or private tenders

When to apply for the Surety Bond (STB)?

  • Guarantee your regulatory or contractual obligations in the context of public or private contracts.
  • Secure your customer relationship by demonstrating your ability to respond to their call for tenders in a professional manner.
  • Optimize your cash flow throughout the duration of the contract

The advantages of the Surety Bond (STB) for you.

  1. Guarantee your regulatory or contractual obligations
  2. Preserve your customer relationship
  3. Optimize your cash flow

 

The terms of the Surety Bond (STB)


Silent risk sub-participation


No


Amount of guaranteed loans


From €250,000 to €30 million or their equivalent in local currency


Guaranteed quota


Up to 25% of the offer value


Duration of eligible loans


1 year


Covered risks


Covers the risks of non-performance and non-compliance with contractual obligations.


Generating events


n/a


Commitment


n/a

The Surety Bond (STB) in a nutshell


Object


Cover for bid/tender, start-up advances, bid bond, performance bond


Risk


Execution/Performance Risk


Instrument


Standby Letter of Credit (SBLC)


SWIFT Interbank Message


FIN MT760


Obligatory


Bidder (SME, Corporate)


Guarantor / Confirmer


ETC – Export Trading & Cooperation


Beneficiary


Adjudicator position

Formula :APR = (AF/T) + (IF/T) + CF

Caption:

APR = Annual Percentage Rate

AF = Application Fees (Indicative rate 1% flat)

IF = Issuing Fees (Indicative rate 0.5% flat)

T = Tenor (year)

CF = Commitment Fee (Annual rate according to Financial Rating*)

*  See table

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Surety Bond (STB)