completion bond

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Completion Bonding

A loan guarantee that a project will be paid for even if it is abandoned. Producers or publishers will make this guarantee to a bank in order to secure loans to finance their projects. Completion bonding benefits the bank as it guarantees that its loan will be paid. It also benefits the producer or publisher as the loan generally does not become payable until the project is completed, improving his/her accounting position. Finally, it benefits the person who actually develops a given project as the producer or publisher is discouraged from suddenly terminating that project. This form of financing is common to the video game and film industries.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

completion bond

A fidelity bond posted by a contractor or developer to guarantee that a particular project will be completed according to plans and specifications,on time,and without any liens incurred as a result of unpaid bills to subcontractors and suppliers;usually required as a condition of performing government work. It provides more coverage than a simple performance bond, which ensures that one party will perform if the other will perform, usually by payment.The completion bond is independent of any underlying contracts and any defenses to those contracts.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The typical types of contract bonds are bid, performance, and payment.
UKEF can also provide insurance protection to exporters against the unfair calling of contract bonds. Overseas investment insurance Overseas investment covers investors against losses on overseas investments arising from political risks.
Market Detail: The ProSure Group's (www.ProSureGroup.com) coverage for construction bonds can include payment and performance bonds, bid bonds, maintenance bonds, supply bonds, subdivision bonds, site improvement bonds, completion bonds, right of way bonds, service contract bonds, and contractor license bonds.
We've provided PS14 billion of support to UK companies in the last five years, with guarantees to banks providing exporters with contract bonds and export working capital facilities, and insurance against non-payment.
Alstom's banks want the state to come up with another solution as contract bonds needed to win new business are running out.
The division is mainly focusing on writing contract bonds for construction companies seeking to guarantee that a project will be completed.
The French state and Alstom's banks handed the company a 4.7 billion euro (pounds 3.24 billion) package in September to avert collapse, plus 3.5 billion euros (pounds 2.41 billion) in contract bonds -the financial backing it needed to bid for new orders.
Among the above mentioned surety programs South Coast Surety brought on line are; a number of "alternative bad credit" bonding plans, in house underwriting for commercial and contract bonds and an Instant Issue California Contractor License Bond application.
The French state and Alstom's banks handed the industrial titan a pounds 3.2 billion package in September that staved off its collapse, plus some pounds 2.4 billion in contract bonds that allowed it to bid for new business.
By law, for certain sized jobs and as an industry standard, builders are usually contract bonded, which helps them land largescale projects.
Paribas analyst Mr Darren Shaw said the announcement left unresolved the crucial issue of contract bonds issued by the construction side of Tarmac's operations and guaranteed by Tarmac plc.

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