How to get a letter of guarantee?
To get the letter of guarantee, the customer has to apply for it. When the bank feels comfortable with the risk, they charge the customer an annual fee for backing them with the letter of guarantee. It can also be issued for technological trade, construction, financing from financial institutions, leases, and a large order of export and import.
Who is the beneficiary of the letter of guarantee?
First :- the client or the "owner of the project" - in our activity contracting activity - which is issued at his request and to calculate the letter of guarantee. Second :- The beneficiary is the " general contractor ", and the one to whom the letter is issued
What happens when XYZ qualifies for the guarantee letter?
The bank confirms whether XYZ qualifies for the guarantee letter, and once satisfied, it proceeds with the issuance of the legal document for $500 million with a validity of 180 days to ABC Company. Upon receipt of the letter of guarantee, ABC proceeds to supply the steel to the construction site in Cyprus.