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Magnate Bank guarantees

A Bank guarantee is an irrevocable written commitment of the bank to pay a certain amount in favor of the person to whom a guarantee is issued in case of breach of a contract by a third party. The bank guarantee is a separate obligation independent of the underlying contractual relationship. The issuing bank must pay if all guarantee terms are strictly fulfilled.

Magnate Guarantees

Advantages for the beneficiary Advantages for the applicant
Irrevocable commitment of a Bank Securing of payment obligations without need of depositing funds with business partners
Each stage of the commercial transaction can be protected - Tender, payment in advance, good performance, payment, warranty obligations, etc. Opportunity to achieve better conditions in commercial transactions. For example: the possibility to negotiate a deferred payment.

Magnate Investment Bank offers guarantees securing the obligations of its clients to local companies and institutions (including to banks) and to foreign companies and institutions (including banks) as follows:

  • Payment Guarantees
  • Advance Payment Guarantees
  • Tender Guarantees
  • Performance Guarantees
  • Guarantees for customs duties
  • Guarantees for financial stability
  • Guarantees for warranty obligations
  • Others, according to the specific needs of each client

Magnate Investment Bank issues guarantees by client’s orders:

  • Fully secured with cash collateral

Documents required

  • Completed and signed by authorized persons "Application for issue of a bank guarantee" form with signed "Conditions governing guarantees"
  • Contract for transfer of ownership on financial collateral (template)
  • Notarized copy of the already signed Contract for transfer of ownership on financial collateral ensuring a reliable date of incorporation of the collateral
  • Notarized copy of the statement of account, which is credited with the relevant amount
  • At the discretion of the bank it may be required a certificate from the Central register for special pledges showing that at the certified date of the Contract for transfer of ownership on financial collateral and statement of the certified account, there are no registered rights of third party on the collateral
  • Guarantees issued within a pre-agreed credit line

More information can be found in Credit limits for bank guarantees and letters of credit

  • Guarantees secured by counter-guarantee
  • Fee for preliminary analysis and processing of credit documentation: according to the Bank's Tariff(see tha table below)
  • Other fees and commissions: subject to negotiation for each transaction

Fees and commissions

Letters of guarantees issued by the Bank
1. Issuing letters of guarantee
1.1. With cash cover 0.3%, min. $ 50, per quarter or part of it; + $ 10 one-off charge
1.2. Secured by a counter-guarantee 0.5%, min. $ 50, per quarter or part of it; + $ 10 one-off charge
1.3. With other type of collateral 0.10%
Issuing By arrangement, min $ 50, per quarter or part of it; + $ 10 one-off charge
Risk fee By arrangement
2. Amendments (excluding increase of the amount of validity) $ 60
3. Changing of collateral $ 15
4. Increase of the amount/extension of validity See the Notes below
5. Cancellation of application for issuing $ 50
6. Handling a request for payment 0.1%,min $ 100,max $ 500
7. Urgent processing upon customer's request within the working day in which a correctly filled application is received (applied for applications received up to 12:00 p.m.) $ 100
Letters of guarantees received in the Bank
8. Pre-advice $ 50
9. Advising of guarantees 0.1%, min. $ 50, max. $ 300; + $ 10 one-off charge
10. Administration and processing of Direct Guarantees 0.1%, min. $ 50, max. $ 300; + $ 10 one-off charge
11. Handling a request for payment $ 70
12. Cancelling a request for payment $ 40
13. Amendments (without increasing the amount) $ 60
14. Examination of guarantee texts which are expected to be received in favour of customers (by request of the customer) $ 50
15. Documentary guarantees To be treated as Documentary Letter of credits

Notes:

1. Issuing of letters of guarantee as per art. 1.3. is allowed only in presence of explicit prior arrangement with Magnate Investment Bank.

2. The issuance commission is collected at once, upon issuance of a bank guarantee for the whole period of validity. Commissions collected are not subject to refund upon amount decrease of the amount of the bank guarantee or upon its cancellation before expiry.

3. An amendment fee according art. 2. is charged when the extension of validity of a bank guarantee is within the quarter period for which an issuing commission according to art.1.1., 1.2.or 1.3. has already been collected. If the extension refers to another quarter or part thereof, the respective commission is charged as if on a new bank guarantee as per art. 1.1.,1.2. or 1.3.

4. Upon increase of the letter of guarantee amount a commission as if on a new letter of guarantee according is charged on the amount of the increase as per art. 1.1., 1.2. or 1.3.

5. The Bank is liable for processing claims according to Chapter II, art. 6.2.4 if these claims are presented at least 5 working days before stipulated latest date for presentation for claims which should be presented in the country and 7 working days before stipulated latest date for presentation for claims which should be presented abroad.

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MAGNATE BANK GUARANTEES

Magnate Bank guarantees secure the obligations to local and foreign companies

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