The Bond Letter of Credit is primarily utilized in South African commercial transactions where enhanced payment security is required, particularly in large-scale projects or international trade dealings. This instrument becomes relevant when standard guarantees or performance bonds need additional banking security. The document incorporates specific requirements under South African banking law, including compliance with the Banks Act No. 94 of 1990 and Exchange Control Regulations. A Bond Letter of Credit typically includes detailed provisions for the bank's undertaking, drawing conditions, expiry terms, and document requirements. It serves as a hybrid instrument, combining the security features of a bank guarantee with the structured payment mechanisms of a letter of credit, making it particularly valuable in complex commercial transactions where multiple parties and substantial financial commitments are involved.
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1. Issuing Bank Details: Full details of the bank issuing the Letter of Credit
2. Beneficiary Details: Complete information of the party in whose favor the Letter of Credit is issued
3. Applicant Details: Information about the party requesting the Letter of Credit
4. Credit Amount and Currency: Specification of the maximum amount and currency of the Letter of Credit
5. Form of Bond: Details of the underlying bond or guarantee being secured
6. Expiry Date: Clear statement of when the Letter of Credit expires
7. Drawing Terms: Specific conditions and documentation required for drawing under the Letter of Credit
8. Payment Terms: Details of how and when payment will be made upon presentation of compliant documents
9. Governing Law and Jurisdiction: Specification of South African law as governing law and jurisdiction
1. Transferability Clause: Include when the Letter of Credit needs to be transferable to another beneficiary
2. Partial Drawings: Include when multiple partial drawings are to be permitted
3. Force Majeure: Include when specific force majeure provisions are required beyond standard UCP provisions
4. Amendment Procedures: Include when specific procedures for amendments need to be detailed
5. Counter-Guarantee: Include when there is a counter-guarantee arrangement involved
6. Special Instructions: Include when there are specific handling or processing instructions
1. Schedule A - Required Documents: Detailed list of documents required for drawing under the Letter of Credit
2. Schedule B - Form of Demand: Template for making a compliant demand under the Letter of Credit
3. Schedule C - Form of Bond: Copy or template of the underlying bond being secured
4. Appendix 1 - Authorized Signatories: List of authorized signatories and specimen signatures
5. Appendix 2 - Bank Contact Details: Detailed contact information for all relevant bank departments
Relevant legal definitions
Clauses
Issuance
Credit Amount
Expiry
Drawing Conditions
Presentation Requirements
Payment Terms
Documentary Requirements
Bank Obligations
Transferability
Force Majeure
Amendments
Assignments
Governing Law
Jurisdiction
Notices
Compliance with Laws
Anti-Money Laundering
Sanctions
Bank Charges
Communications
Default Events
Representations and Warranties
Credit Amount
Expiry
Drawing Conditions
Presentation Requirements
Payment Terms
Documentary Requirements
Bank Obligations
Transferability
Force Majeure
Amendments
Assignments
Governing Law
Jurisdiction
Notices
Compliance with Laws
Anti-Money Laundering
Sanctions
Bank Charges
Communications
Default Events
Representations and Warranties
Relevant Industries
Banking & Financial Services
Construction
Infrastructure
Mining
Energy
International Trade
Real Estate
Manufacturing
Engineering
Insurance
Relevant Teams
Treasury
Trade Finance
Legal
Compliance
Risk Management
Finance
Commercial
International Banking
Credit
Operations
Relevant Roles
Treasury Manager
Trade Finance Manager
Banking Relationship Manager
Chief Financial Officer
Financial Director
Project Finance Manager
Contract Manager
Legal Counsel
Risk Manager
Compliance Officer
Commercial Director
Credit Manager
Documentary Credits Specialist
International Trade Specialist
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