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International financing LG
International financing letter of guarantee (LG)
1 Product Introduction

The international financing letter of guarantee (LG) is issued by our bank upon the request of domestic customers (Applicant). Our bank’s domestic branches will act as the guarantors for the LG or standby letter of credit (LC), while overseas financial institutions will be the beneficiaries. When the guaranteed persons (overseas/domestic debtors) are unable to repay the loans provided under the LG or standby LC, the beneficiaries may claim compensation from our bank and our bank will be obliged to fulfill the repayment obligations under such LG or standby LC.

2 Target Customers

(1)Customers’ overseas investment companies or affiliates can use the products for financing. By issuing international financing LG, our bank can provide guarantee in favor of customers’ overseas investment companies or affiliates, thereby helping them raise money.

(2)Customers can use the products to lower costs when raising money abroad. Using our international financing LG, customers can leverage our extensive overseas platform and strong interbank channels to provide low-cost funds to their overseas affiliates.

3 Product Advantages

(1)Addressing difficulties faced by overseas companies in financing. Guaranteed by our bank’s creditability, domestic companies’ overseas investment companies or affiliates can rise funds locally more easily, which will facilitate local business development.

(2)We have many overseas platforms, including the offshore financial center, Hong Kong branch, New York branch, Singapore branch, Luxembourg branch, London branch, Sydney branch, CMB Wing Lung Bank, and other overseas institutions. Such strong overseas platforms can help businesses make full use of international financial markets to lower financing costs.

International non-financing letter of guarantee (LG)
1 Product Introduction

The international non-financing letter of guarantee (LG) is issued by our bank upon request of domestic customers (Applicant). In the form of international performance guarantee or standby letter of credit (LC), our bank provided a written guarantee (via telegraph text or letter) in favor of overseas institutions (beneficiaries). Under such guarantee, if the guaranteed person fails to repay debt or perform obligations as contractually required, the beneficiary may claim compensation from our bank, and our bank shall perform repayment/payment obligations. Based on scope of use and nature, our banks’ international performance guarantee includes tender guarantee/bid bond, performance guarantee, quality guarantee, advance payment guarantee, payment guarantee, etc.

2 Target Customers

Our international performance guarantee aims to serve customers engaging in international trades or cross-border cooperation on engineering projects. Such customers may apply for support in terms of international performance guarantee from our bank throughout the entire processes of cross-border transactions.

3 Product Advantage

(1)Addressing the lack of trust between transaction parties. On the back of our strong reputation, our bank can act as the guarantor in transactions, and provide guarantee in favor of any party in importation or exportation. By doing this, we can facilitate the transactions in importation or exportation.

(2)Reducing capital pressure. Through tender guarantee/bid bond, performance guarantee, and quality guarantee, constructors can reduce the payment of cash security deposit.

(3)Protecting interests of related parties. In case of any default, the non-defaulting party can be compensated, and the defaulting party can be punished by enforcing the LG, thereby reducing transaction parties’ nuisance and expenses arising from the lawsuits or arbitrations caused by disputes.

(4)Our extensive agency network. Our bank is cooperating with over 240 banks in LG business, and nearly 2,000 agents are backup channels. Our strong network can facilitate customers’ business development across the world.

All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.