Direct guarantee from OP
An OP direct guarantee can be sent, as a printed out version on paper, to the guaranteed party or beneficiary in accordance with the guarantee application. On the other hand, if the beneficiary is foreign, the guarantee can be sent as an authenticated SWIFT message via the beneficiary’s bank (a so-called advised guarantee).
The beneficiary can require that a guarantee is issued by a bank in the beneficiary’s home country. In such a case, the guarantee is issued through our local correspondent bank as an indirect guarantee. OP will ask the correspondent bank to issue the required guarantee to your company’s contractual partner. At the same time, OP will issue a counter-guarantee to the correspondent bank. The counter-guarantee must be valid for at least as long as a guarantee issued in the beneficiary’s country. It is common practice for a counter-guarantee to be valid for 15–45 days longer than a guarantee issued in the beneficiary’s country. You must take this into account in your guarantee application.
An indirect guarantee is a first demand guarantee in every case.