Asset-Management-Software Are instruments specifically written to guarantee the repayment of credits extended by private lenders to international borrowers and projects that create economic well being for both the country of the lender and the country of the borrower.

International guarantees or assurance off payments are written to back up both financial and non-financial transactions. In financial transactions, they may be used to guarantee loans, back up commercial paper issues, or to ensure performance on options or future contracts.

In non-financial transactions, they may be used to cover contract performance usually associated with construction projects, or to ensure merchandise delivery such as import/export. Guarantors in the international arena generally will unconditionally guarantee 100% of the principal amount of a loan involved in a particular transaction plus interest at a rate satisfactory to the guarantor.

A proposal for an international guarantee should meet the following tests:

  • The project for which the financing is requested must be economically, financially, and technically sound.
  • It must be worthwhile and of high priority.
  • The project must not adversely affect the economy of either the country of the lender or the country in which it is located.
  • The project must be financially self-supporting and the links to productivity and earning capacity must be direct.

The pricing for the acquisition of a guarantee or collateral in the international marketplace varies considerably. Generally, it will depend on the country, method of payment, maturity, dollar amount of transaction for which the guarantee is being sought, and other factors that may come into play at the time of application.