What are the characteristics of a Bank Guarantee?
Key Facts
The main characteristics of a bank guarantee.
A bank guarantee can not be bought or sold, they are non-transferable and non-divisible.
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Bank Guarantees are issued by a bank under instructions from their client and they have specific verbiage in relation to its intended purpose. Guarantees can be issued against cash or assets held by the provider or even issued on margin.
They are not a Financial Security, they are non-transferable and non-divisible. Bank guarantees can not be bought or sold and any company telling you they otherwise acting in a fraudulent manner.
A Bank Guarantee can not be traded or discounted, and they do not carry a CUSIP or ISIN identification code.
They are a non-interest-bearing instrument and they are not issued with a credit rating. Ban Guarantees are not issued to investors to raise cash and should not be confused with medium term notes, (MTN’s).
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