Does anybody have experience with alternatives to surety?

November 12, 2024

by a searcher from University of Otago in London, UK

Does anybody have experience with alternatives to surety, performance/warranty bonds? I'm in discussions with a company that has a large amount of capital tied up in a surety bond. We are jointly seeking an alternative to release the capital. I believe there should be an insurance product that could replace this, so am seeking knowledge if such a product exists.

This is in the UK

Reply by an investor
from University of Rochester in New York, NY, USA

Hi Rob, is this an active bond tied to a project? Depending on the company's credit, they may have had to post cash collateral to a restricted account (which is what I'm guessing you're hoping to untangle.) It's possible to remove the bond but it may violate the terms of the active project. Happy to chat on it, the most common alternatives to bonds are cash or LOC vs a different insurance policy.

Reply by a searcher
from University of Otago in London, UK

Hi Tom - yes it is, although there is another project coming up that is requested similar. I’m curious on the alternatives - keen to chat

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