Safely provide bonds for foreign customers
What we offer
Requirements for your business
How a Bond Guarantee works
Through a bank, you have issued a bid bond, an advance payment bond or a performance bond to a foreign customer in connection with an order.
If your customer makes an unfair call on the bond, EKF compensates up to 90 per cent of your loss. The also covers if the authorities in the country prevent you from delivering, or if an international ban on trading with the country is imposed.
This means you can safely accept orders from markets that you would otherwise be unwilling to venture into. Even if you do not know the customer, the risk you are running is small.
A bond larger than their own equity
In 2015, Aarhus-based architectural design firm CEBRA won a commission to design a cultural centre and park in the heart of Abu Dhabi. But to take on the order, worth around DKK 70 million, CEBRA was required to provide the client with a supply bond equivalent to 10 per cent of the contract sum. This was more money than the company had in equity. CEBRA's bank pledged the bond with risk cover from EKF. The bank also recommended a Bond Guarantee to make sure that the owners of the Danish company would sleep soundly at night, even though they had deposited DKK 7 million in an “open” account.Read their story
How to get a Bond Guarantee
Your customer demands a bond for your delivery
Your foreign customer is aiming to insure itself against loss if, for some reason, you do not deliver the agreed goods or services. The customer therefore demands a bond, which you provide via a local bank.
You want to ensure that the bond will not be misused
You are concerned that the customer may find a reason to call on the bond, even if you meet your agreement. You therefore contact EKF and ask to be insured against loss through a so-called Bond Guarantee.
We run a credit rating check on your export transaction
Before we offer you a Bond Guarantee, we have to check the credit rating of your customer, the industry and the situation in the country concerned. This includes a CSR screening, among other things. If the contract value is over DKK 25 million, a more in-depth CSR assessment will be required. You also complete and sign the relevant documents.
If we agree to cover your transaction, we will send an offer detailing the cover, price and conditions.
And we're done
We then provide the Bond Guarantee and you are insured against significant loss if the customer makes an unfair call on your bond. Now you can focus on delivering the order to your customer.