Corporate Guarantees

Benefits of employing a commercial bond

Commercial bonds are an efficient way to handle the collateral requirements related to the daily business operations of your company, enabling your business to secure sales and avoid the use of cash collateral or unfavourable payment or business terms.

By utilising Garantias commercial bonds, you can optimise the use of your financing sources, as the necessary advance payment bonds, performance bonds or rent guarantees, for example, do not eat up the capacity of your credit lines at your bank.

General terms on commercial bonds

Garantia mainly underwrites commercial bonds for companies with guarantee needs of at least EUR 0.5 million.

Midcap and large corporates can be offered a commercial bond facility, allowing the company to independently draw individual commercial bonds within the facility, in a quick and flexible way by using Garantia’s eService platform.

Commercial bond types

Garantia’s offering for commercial bonds includes, for example:

• Delivery bonds
• Performance & maintenance bonds
• Advance payment bonds
• Bid bonds
• Payment bonds
• Licence & permit bonds
• Rent guarantees
• Customs bonds

The commercial bonds can be underwritten under Finnish law as absolute guarantees (fin: omavelkainen takaus) or as On Demand guarantees following international conventions.

Commercial bond pricing

The premium pricing of commercial bonds depends on commitment type, the creditworthiness of the obligor and the tenor of the commitment. Commercial bonds and relevant facilities can be underwritten unsecured.

Commercial bond underwriting

Commercial bond underwriting requires the successful completion of a credit analysis on the obligor. The analysis is focused on the ownership structure, corporate governance, business model, financial structure and sustainability (ESG) aspects of the borrower.

Garantia does not currently offer commercial bonds for real estate development related construction projects.