Letter of Guarantee Facility

A letter of guarantee is a written promise issued by the bank to compensate (pay a sum of money) to the beneficiary (local or foreign) if the obligator fails to honor her/his/its obligations per the terms and conditions of the guarantee/agreement/contract.

Coopbank may extend a one-time or renewable letter of guarantee facilities. A one-time letter of guarantee facility is a non-renewable letter of guarantee extended to applicants who have no recurrent requests. Renewable letter of guarantee facility on the other hand, is a form of credit facility where the limit is set for customers with recurrent requests reviewed periodically when the customer fulfills the bank’s requirement.

The Bank provides guarantee services to both local and foreign customers. A foreign-currency permit from NBE should be obtained for any form of guarantee that the Bank is requested to issue in favor of foreign beneficiaries.

Types of Letters of Guarantees

  • Bid Bond Guarantee,
  • Performance Bond Guarantee,
  • Advance Payment Guarantee,
  • Suppliers’ Credit Guarantee /Trade Credit Guarantee/,
  • Retention Payment Guarantee,
  • Steamers’ Guarantee /Letters of Indemnity for Missing Documents/,
  • Customs Duty Guarantee