financial guarantee definition

financial guarantee

Non-cancelable indemnity bond that guarantees timely payment of interest and repayment of principal to the buyers (holders) of a debt security. Similar to under a standby letter of credit, the guarantor pays in case the first party (issuer of the security) fails to do so.

financial guarantee is in the Accounting & Auditing, Agreements & Contracts and Banking, Commerce & Finance subjects.

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