Contingent Guarantee

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 ?
Oil & gas company Ecopetrol SA (BVC:ECOPETROL)(NYSE:EC)(BVL:EC)(TSX:ECP) reported on Monday the receipt and closing of a contingent guarantee for expansion and modernisation of its USD3.
Ecopetrol SA awarded guarantee for expansion and modernisation of USD3.5bn Cartagena Refinery project
The IRS apparently views a creditor under a contingent guarantee as having a prohibited interest in the trust.
Cases and rulings on the marital deduction, and miscellaneous estate and trust issues
Mr Truell told The Times the plan would need the backing of the Treasury, as the taxpayer would act as the guarantor, and it would also need contingent guarantees from Tata Steel to stand behind the scheme and the support of the Pensions Regulator.
Tata could be sold for PS1 in bid to save site and protect pensions
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.
How Afreximbank is redefining the African business landscape
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