Contingent Guarantee

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Contingent Guarantee

A guarantee made by a third party to the buyer of a good or service stating that the seller will receive payment on time and in the correct amount. If the buyer fails to make the payment, the third party will make payment on his/her behalf. Contingent guarantees, known as letters of credit, have become very common in international commerce, as distance and other factors make it difficult for sellers to establish the credit worthiness of every buyer. See also: Co-signer.
References in periodicals archive ?
Afreximbank creates contingent guarantees for projects, and once they are completed the bank agrees to refinance the construction financing partners and provides extra capital for furniture, fittings and pre-operating working capital.
The assessment WMB is undertaking has no direct impact on WCG's operations, WCG's financial performance or the contingent guarantees WMB provided in support of WCG's $750 million network lease agreement (ADP facility) and the $1.
For TGN, the existence of creditworthy owners is crucial given the contingent guarantees provided by TransCanada and other sponsors under the certificates to the IFC.
5 million and cancellation of all contingent guarantees provided by Peerless.