Bonds - Cover for guarantors

This policy is designed for internationalisation transactions in which Spanish exporters are required to provide guarantees, as part of an export contract, to foreign buyers or authorities of the destination country.

The insurance covers the Financial Institutions that issue the guarantee.

When a guarantee issued to the Exporter by the issuing Financial Institution is enforced, irrespective of the cause of the enforcement, Export Credit is created in favour of the Bank. This policy covers the bank against the risk of non-payment of the credit.

Insurance can be requested for the guarantees of a single commercial contract or, alternatively, for a guarantee line, if the need to provide guarantees for several contracts is expected.

Who is the insured party?

The Policyholder and Insured Party will always be the Bank, which may apply directly to Cesce for coverage.

Who can apply for coverage?

The Exporter can also apply if it has not yet signed a guarantee issuance with a specific Bank. If the transaction is approved, Cesce will issue an indicative tender, which the exporter can transfer to the financial institution with which it finally decides to operate. The Tender will be formalised in a Policy once the assigned Bank sends a signed copy to Cesce as proof of acceptance.

Commercial risks

The insurance covers the risk of non-payment of the credit arising between the ordering party of the guarantee (usually the exporter) and the issuing bank or entity upon execution of the guarantee. It provides coverage against the non-payment of the credit due to insolvency in fact (prolonged default) or a statutory filing in law (insolvency proceedings, bankruptcy, suspension of payments, etc.) of the debtor (usually the exporter) and, where applicable, of the Guarantor.

There are no limits (maximum or minimum) on the amount per transaction.

The maximum amount of coverage will be limited by the amount of the Guarantee issued (or pending issuance) by the Insured Bank.

The guarantee to be covered must fulfil the obligations of a Spanish company (or its foreign subsidiary) under an international contract.   

The insurance policy price is in line with the bank price

The premium for Cesce is generally determined on the basis of the risk commission charged by the bank, which must declare, in addition to said risk commission, all commissions charged for the transaction. 

The rate on the basis of which the premium is calculated will generally be determined by applying a surcharge equal to 5% of the risk commission. 

Example:
Risk commission declared by the bank: 1.50%
Applicable surcharge: 0.075%
Premium (declared commission + 5% surcharge): 1.575%

You need to send an application, which will be examined and analysed. 

• After receiving an application, Cesce analyses the risk associated with the requested coverage based on the information provided by the Insured Party..

• The risk analysis examines the creditworthiness of the exporter (ordering party of the guarantee or debtor of the credit if executed) or, where applicable, of the Guarantor.
   

• Si esta empresa tiene una calificación crediticia favorable de Inbonis rating, se agilizan y acortan los tiempos de estudio, ya que Cesce reconoce las calificaciones de esta agencia.

• The study also examines the feasibility of the contract, the exporter's ability to perform it, and the possible environmental impact, among other aspects, ensuring at all times that the transaction qualifies for coverage by the State in accordance with current regulations.  
   
• Once the risk has been analysed, the Company submits a proposal to the decision-making body. If approved, Cesce will issue a proposal of terms and conditions. If the Insured Party accepts the proposal, the coverage will be formalised once the parties have signed the Insurance Policy and the Insured Party has paid the premium.
   
• When an application is made for a guarantee line, Cesce assesses the exporter’s eligibility and, if found to be eligible, issues framework terms and conditions and a maximum sum to be insured. Each individual operation to be assigned under such terms and conditions will be assessed and, if suitable, a policy will be issued. Securing a guarantee line reduces the processing time for operations when an exporter needs to make repeated applications.

If you are interested, please fill in and email the application form to cuentadelestado@cesce.es.   

If you have any questions, please call +34 91 193 19 99 or send us your details, and we will contact you.