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Bank Guarantees (BG's)

Bank Guarantees (BG's) - Raise a Credit Line or Cash them in for real dollars.

Value conversion depends on many factors, some fixed, some floating such as…

  • Ownership of BG - Corporate or Private - Corporate is Highly Preferred

  • The Type of BG

  • Issuing Bank Rating as well as location (branch) of Bank Issuing the BG

  • Physical Location of the Original BG - Safety Deposit Box, Corporate Office Safe, Home, etc.

  • If an Agent, Security House, or Third Party Bank is Holding BG's

  • BG must be in US Dollars only

  • Market Conditions

  • Bank Policy

  • Client anticipation of return

  • Place transaction occurs

What is done with 'Cash' after conversion - this is becoming a paramount issue with banks
converting the instrument, the preferred and acceptable method is to deposit a portion
of the redeemed funds with the honoring bank, usually not less than 50% for a period
of not less than six (6) months.

Some Helpful Hints Before Starting....

  • BG's are usually issued by a corporation as collateral.

  • BG's held by individuals are highly questioned by banks throughout the world.

  • It is generally easier to raise a 'Credit Line' than convert the instrument to CASH!

  • Fluctuating World Market Conditions set the pace and determine the trading value, if any.

  • Usually most every instrument can be converted, however, some are just Not desirable

Trading Instruments on the current World Market.
Substantiated "Documentation' is needed for this type of transaction.

The Following Bank Guarantees are very difficult to do at the present, and only a  'Credit Line' could be raised:

  • Any BG issued from any Indonesian Bank

  • Any BG issued from any Thailand Bank

  • Any BG issued from any Philippine Bank

  • Any BG issued from any Malaysian Bank

  • Any BG held by an Individual in lieu of a company, trust, corporation, or nonprofit entity

    The Following BG's Are NOT Currently Tradable:

  • BG's issued from Russia

  • BG's issued from Vietnam

  • BG's issued from Cambodia

  • BG's issued from Laos

  • BG's issued from Burma

Important Notice:
It is widely considered a trading rule that any securities are deemed NOT Tradable if they originate from a non recognized international public trading exchange. This applies to Any type of Security Note (stock, bond, mutual fund, trust, MTN, debentures, etc.).

Recommended further reading:
Bankers Acceptances 
Bank Guarantees for officially supported exports 
Bank Promissory Notes, Bank Debentures
Bank Guarantee Form