What risks are covered under an Untied Loan Guarantee?
Untied Loan Guarantees provide cover against the risk of default on the repayment claim under a loan agreement.
The guarantee encompasses both political and commercial risks:
- State measures: Legislative or administrative measures
- War, armed conflicts, riots and revolution abroad
- Conversion and transfer risks
- Exchange rate losses on amounts deposited due to a national devaluation
- Insolvency of borrower (in case of private foreign debtors)
- Loss of receivables due to settlement in court or out of court as well as unsuccessful execution
- Suspension of payment by the foreign debtor
- Non-payment within one month after maturity (protracted default)
Worth knowing: On application, the scope of cover can be limited to political risks. Furthermore, the Federal Government may exclude or limit the extent of cover for certain risks when deciding on issuing a guarantee.
Do you have any further questions regarding the risks covered?
Please do not hesitate to contact our specialists who will be pleased to assist you with any questions regarding the risks covered under an Untied Loan Guarantee at any time.