Guarantees

Financial guarantees

In certain cases we can advise you to develop a guarantee concept and structure necessary for the successful financing of the Project. Those guarantees are backed by financial instruments (>A S&P) issued by leading European financial institutes.

Following guarantees can be attached to any real estate project examined by us providing the developer understands the concept and has a firm believe in the success of the project.  The following projects add marketing value to the offer made into the market. Not only end buyers or final owners can benefit from such guarantees, risk and/or mezzanine investors can invest more safely and with much more comfort.

• Guarantee on the rental income (end buyer letting the property) = lease guarantee
• Guarantee for value increase
• Guarantee for a minimum return on investment
• Guarantee securing the initial purchase value (in part of in whole)

 
Other guarantees

Beside that, we can offer you through our affiliation with reputable financial institutes (banks and insurance companies) the following services:

Surety Bonds

Refers to obligations to pay the debts of, or answer for, the default or miscarriage of another. A surety bond is a legal relationship based upon a written contract in which one person or corporation (the Surety) undertakes to answer to another (the Obligee) for the debt, default or miscarriage of a third person (the Principal) resulting from the third person’s failure to pay or perform as required by an underlying contract, permit, ordinance, law, rule or regulation.

A surety bond is not an insurance policy. Because an insurance policy assumes that there will be a loss, so the premium for an insurance policy is calculated to cover losses that will occur. A bond, on the other hand, is an extension of credit with the assumption that the legal obligation will be fulfilled, and consequently, there will be no loss. The bond premium paid to the Surety covers only the underwriting expenses of the Surety company. When losses occur, they have a significant impact on the Surety company’s financial results.

Credit Deficiency Guarantees

A bond, guaranteeing payment according to a credit/loan agreement, signed between two parties. In case of default of the debtor and his subsequent unsuccessful liquidation, we guarantee the possible risk and payment of the financial loss within the terms and conditions set in the Guarantee.

Bid Bonds

A bond given by a bidder for a supply or construction contract to guarantee that the bidder, if awarded the contract within the time stipulated, will enter into the contract and furnish the prescribed performance and/or payment bond. Default will ordinarily result in liability to the Obligee for the difference between the amount of the principal’s bid and the bid of the next lowest bidder that can qualify for the contract. In any event, the liability of the Surety is limited to the bid bond penalty.

Balance Sheet Enhancements

An instrument securing specific assets listed on a Company’s balance sheet, in order to avoid remarks or rejection by the Company’s auditor or, to underwrite certain assets in the Company’s financial statements to enable the Company to pursue particular endeavours.
Meritsa also arrange the issue of Instruments for underwriting financial strategies on behalf of a Company subject to sufficient pledged collateral.

Completion & Performance Bonds

A Performance and Completion Bond is an irrevocable commitment issued by the Surety to Party A (Obligee) guaranteeing that Party B (applicant/client) will complete the referenced contract/perform within its set terms and conditions. The Surety is in effect co-signing said contract.
If a Completion and Performance Bond is required, Meritsa assited by a specific case specialised partner, thoroughly analyzes the capability and capacity of the application/performing party to verify their ability to complete the project in the desired manner. As Meritsa is neither in the contracting or manufacturing business and consequently has no desire to be required to complete the guaranteed work, it is very particular and highly selective about the clients it bonds.

Collateral for Venture Capital & Project Finance

Meritsa underwrites through its partners Venture Capital and/or Project Finance and arranges the issue of financial instruments provided that the project is feasible and the underlying assets are substantial and acceptable. It pursues its own due diligence and feasibility study and upon positive assessment of the parties and values involved, Meritsa will provide an offer of how it foresees its role in said endeavour.

Insurance and Re-insurance

In addition to the security provided by assets, Meritsa has over the years been engaged in building relationships with highly reputable insurance and reinsurance companies in order to provide a back-up to operations it endorses, thus creating a first class fundable instrument.

The establishment of this structure was not to place an additional name to the long list of competing players in the financial market. It is to provide for the increasing demand to break through the time barrier necessitated by the institutional funding of a non-rated instrument or a re-insurance instrument with a S&P rating of A or better.

Meritsa offers direct contact to sizeable insurance and reinsurance underwriting capacity in all non-life classes of business. The continuous influx of inquiries and offers handled by dedicated professional Underwriters, coupled with the steadfast commitment of appointing experienced Claims Staff to pre-process claims, attests to the insurance industry’s recognition of the value of the delivered security and the stability of the company as a whole.
The company’s long term commitment to the insurance and reinsurance Industry is evident by its collaboration with leading insurance companies, serviced by highly qualified underwriters, further underscoring Meritsa's industry reputation and dedication to excellence.

In order to fulfil these obligations to its insurance and reinsurance partners, Meritsa keeps a watchful, caring eye on the underlying transaction and accepts nothing less than quality and professional service. The management of the client company work in tandem with Meritsa in a team spirit to fulfil the company’s commitments and achieve utmost client satisfaction.