Revolving Bank Guarantee Template for Hong Kong

The Revolving Bank Guarantee is a sophisticated financial instrument commonly used in commercial transactions where ongoing guarantee support is required. This document is particularly relevant in Hong Kong's dynamic business environment, where it serves as a crucial tool for securing continuing business obligations without the need for multiple separate guarantees. It is typically used in scenarios such as recurring trade transactions, ongoing supply contracts, or rolling credit facilities. The guarantee automatically reinstates after each demand up to the maximum facility amount, providing flexibility while maintaining clear risk parameters. Hong Kong's sophisticated banking laws and established commercial practices make it an ideal jurisdiction for such instruments, particularly given its role as a major financial hub in Asia. The document includes comprehensive provisions for the revolving mechanism, demand procedures, compliance requirements, and rights and obligations of all parties involved.

1. Parties: Identification of the Bank (Guarantor), the Applicant, and the Beneficiary

2. Background: Context of the guarantee, underlying relationship between Applicant and Beneficiary

3. Definitions: Definitions of key terms including Guarantee Amount, Expiry Date, Revolving Mechanism, etc.

4. Guarantee and Revolving Facility: Core terms of the guarantee including amount, revolving nature, and reinstatement provisions

5. Demand Procedure: Process and requirements for making demands under the guarantee

6. Payment Terms: Terms governing payment, including timing, currency, and method

7. Bank's Rights and Obligations: Detailed provisions regarding the Bank's responsibilities and rights

8. Applicant's Obligations: Obligations of the Applicant including reimbursement and fee payment

9. Representations and Warranties: Standard representations and warranties from all parties

10. Fee Structure: Details of fees, charges, and commission payable

11. Term and Termination: Duration of the guarantee and circumstances for termination

12. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction provisions