garantiqa local governmental guarantee – for local governmental bonds
Garantiqa offers its services for local governmental enterprises, which are willing to participate in development procedures, but for accessing the resources they do not have the necessary collateral.
The Garantiqa Local Governmental Guarantee (absolute guarantee) is member of the Garantiqa product range, which enables the local governmental enterprises to access the available resources with a safe criteria system at a low guarantee fee.
The Garantiqa Local Governmental Guarantee is available for bond issue.
In what forms can be the Garantiqa Local Governmental Guarantee requested?
Proportionate guarantee: absolute guarantee stated in % value with respect to the capital and interest payment obligation arising from bond issue.
Guarantee with a fixed amount: absolute guarantee with a fixed guarantee amount.
What are the advantages of Garantiqa Local Governmental Guarantee?
- Such local governmental enterprises are also able to issue bonds, which without the absolute guarantee of Garantiqa would be unable to do so.
- The local governmental enterprise’s chance to access the resources increases; therefore it is able to accomplish larger projects.
- The terms and conditions of issuing the bonds will improve due to the absolute guarantee of Garantiqa
- Negotiable real estates, as property collateral can be used for other purposes; if necessary they can also be marketed. By this new opportunities of asset management become available.
- If the local governmental enterprise due to the business’s temporarily financial difficulties is unable to pay the actual instalment, Garantiqa as guarantor delivers instead of the enterprise (cashing).
The guarantee may be partial or revolving cashing type, in both cases a maximum cashing amount is defined.
In the case of a partial cashing procedure if the local governmental enterprise is temporarily insolvent it is possible to enter into an agreement with Garantiqa, and in the frame of this agreement Garantiqa undertakes the payment obligation of the local governmental enterprise towards the bank. If the local governmental enterprise is able to settle its debt towards Garantiqa and after that it is able to settle the instalments towards the bank, no debt settlement procedure shall be initiated, but in the future only the difference of the maximum cashing amount and the already cashed in amount shall be subject to cashing procedure.
In the case of revolving cashing construction, if after the cashing the local government settles its debt towards Garantiqa, it shall still have the maximum cashing amount.
For what transactions can be the Garantiqa Local Governmental Guarantee requested?
- for EU tender own capital supplementary loans,
- for subsidy advance loans,
- for development and investment loans,
- for rescheduling existing loan collateral,
- for HUF and foreign currency loans.