Property guarantee and personal guarantee

Proper security

Mainly manifested in the mortgage and control of project assets, including the project’s real estate (such as Mortgage of land, buildings, etc.) and tangible movables (such as machinery and equipment, finished products, semi-finished products, raw materials, etc.), setting up security rights for intangible movables (such as contract rights, company bank accounts, patent rights, etc.), etc., such as If the debtor fails to perform its obligations, the creditor can exercise its rights over the collateral to satisfy its own claims. There are two forms of security for property:

Mortgage. The transfer of ownership of an asset to a creditor (mortgagee) for the purpose of providing security, but with an express or implied condition that ownership of the asset shall be re-transferred to the debtor after the debtor performs its obligations.

Guarantee. This form does not require a transfer of possession of assets and interests or a transfer of ownership, but is an agreement between the creditor or debtor.

Personal guarantee

It is a commitment made in the form of a legal agreement, and the guarantor assumes the responsibility to the creditor certain obligations. The obligation can be a secondary legal commitment, that is, if the guaranteed party (the principal debtor) fails to perform its obligations to the creditor (guaranteed beneficiary) (in case of default), it must assume the contractual obligations of the guaranteed party . Project investors serve as guarantors. Project investors establish a specialized project company to operate the project and arrange financing. Use a third party with an interest in the project as a guarantor.

Commercial guarantor. Providing guarantees as a means of making profit, assuming the risks of the project and charging guarantee service fees

Commercial guarantors reduce their risks through diversified operations. The guarantee services provided by commercial guarantors are to guarantee the obligations that project investors must assume in projects or project financing. Such guarantors are generally commercial banks, investment companies and some specialized financial institutions, and the guarantees provided are generally bank letters of credit or bank guarantees.