Raiffeisen Bank 

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Infoline: 800 900 900

Bid Bond

A bid bond is a non-payment guarantee and represents an irrevocable obligation of the issuing bank to pay the set amount in the event that the principal does not meet its obligations resulting from the conditions of the proceedings for an order, i.e. that an applicant (bidder for an order) cancels a bid when it is valid; that in the event the order is granted a contract is not concluded with the client under the conditions specified in the bid; or it does not present a performance bond, if one is requested.

Benefits

  • A bond represents a quality guarantee for the applicant’s obligation, and the beneficiary (tender authority) obtains certainty that it will receive performance under the bond from Raiffeisenbank, if the applicant does not meet its obligations resulting from the conditions of the proceedings for the order and if the beneficiary (tender authority) asks for performance in accordance with the conditions of the bond.
  • The bond strengthens the trustworthiness of the applicant (bidder for the order) in relation to the client of the order.
  • It enables an applicant to participate in announced proceedings for an order without depositing funds on the client’s account.
A bid bond enables a bidder for an order to meet the conditions for winning the order.

Issuance of bid bond and performance under bond

  • Raiffeisenbank issues a bid bond based on its client’s application up to the amount and with a tenor in accordance with the terms and conditions of the contract between Raiffeisenbank and its client (applicant).
  • Together with a request for the issuance of a bond, the client submits documents containing the conditions and requirements under which the bond should be issued.
  • In the contract on issuance of the bond or in the loan contract, the client expresses its agreement that if Raiffeisenbank, in accordance with the conditions of the bond, is asked for performance under the bond, it will provide irrevocable performance in favour of the bond’s beneficiary.
  • With regard to the fact that the bond represents an irrevocable obligation, Raiffeisenbank cannot change the conditions of the bond in a manner unfavourable to the beneficiary of the bond or cancel the bond without the consent of the bond’s beneficiary.
  • Raiffeisenbank provides performance under the bond only in the event it receives an invitation to perform submitted by the bond’s beneficiary in accordance with the terms and conditions of the bond.

Collateral

The requirements for collateral for a bond will be communicated by Raiffeisenbank to the client in connection with its check on the client’s good standing.



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