Bond Duration Vs. Interest Rate Risk | Performance Bond California Civil Code

Types of guarantee
or bond
Types of guarantee or bond

Below you can see the different types of international guarantees issued by Danske Bank.

With the supply of factory plant, machinery and other capital goods, it is often agreed that the buyer may withhold 5%-10% of the contract amount for a guarantee period, for example 12 months after the plant or machine(s) are up and running.

The exporter may wish to receive the full contract amount before the end of the contract period (in the example given above, 12 months) by issuing a retention bond that covers the amount that would otherwise be withheld.

The exporter will request its bank to issue a retention bond in favour of the buyer. Once the buyer receives the retention bond he will transfer the amount of the bond value direct to the exporter by international money transfer.

Sample retention bond (demand type) Sample retention bond (conditional type)

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Trade & Export Finance products and services

Read More about our trade & export finance products and services in these booklets (PDF):

Download factsheet on Documentary Credits
Download factsheet on Int'l Guarantees
Download factsheet on Collections
Download factsheet on Business Online

To read PDF documents, download Adobe Reader®

Document Checklist
What to look out for in every document involved in the documentary credit process:

Danske Bank A/S, London Branch, 75 King William Street, London EC4N 7DT, United Kingdom. Telephone: +44 (0)20 7410 8000 Facsimile: +44 (0)20 7410 8001 E-mail: [email protected] VAT number: 853 7590 92. Danske Bank A/S, London Branch is authorised by the Danish Financial Supervisory Authority (Finanstilsynet) and is subject to limited regulation by the the Financial Conduct Authority and the Prudential Regulation Authority. Complaints should be addressed to our Legal Department. Details on the extent of our regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from us on request. Registered Branch in England and Wales, Company No. FC011846, Branch No. BR000080. Danske Bank A/S, Incorporated in Denmark, CVR No. 61 12 62 28 Copenhagen. Our details can also be viewed on The Financial Services Register under Firm Reference Number 124655.

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