Bid and Performance Guarantee Program

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Shipping Business Management Support

Bid and
Performance Guarantee

KOBC provides guarantees in lieu of cash deposit a shipping company is required to submit when participating in a bid (Bid Guarantee) or concluding a contract with a charterer (Performance Guarantee).

(Bid guarantee)Compensation for loss suffered by the charterer when the successful bidder fails to enter into the contract
(Performance guarantee) Compensation up to the amount of contract deposit for charterer's loss resulted from a shipping company's failure to fulfil obligations under the main contract

Features/Benefits

Support shipping companies in earning contracts with charterers by furnishing guarantees required from bidding to contract signing and performance

Main Terms

Main Terms
Classification	Details
Guarantee beneficiary	Charterer (the "Creditor") under the relevant transport services contract (the "Main Contract")
Guarantee period	Main contract period
Guaranteed amount	Amount equivalent to deposit under the main contract (Bid amount or contract amount × deposit ratio)
Guarantee rate	Guarantee Fee Rate = Basic Rate × (1 ± Discount/Surcharge Rate) * Basic Rate as determined by a shipping company's credit rating ** Discount/Surcharge Rate varies by guarantee period, guarantee amount, deposit ratio, etc.
Guarantee debt	Compensation up to the guaranteed amount for loss caused by debtor's default under the main contract

*For details, please refer to the terms and conditions of our bidding and performance guarantee.

Guarantee Structure (example only)

Performance guarantee flow chart: Bid announcement date → Bid registration date
Bid guarantee → Bid date (successful, failure) → contract conclusion date
Contract performance guarantee