Performance Bond for US Company to a Chinese Company
Posted: Thu Apr 19, 2007 4:39 pm
I have a customer that is looking to enter into a contract to provide and load 300,000 metric tons of Iron Ore in Brazil, each month to be shipped to a Company in China. The contract calls for a 2% Non-Operative Performance Bond to pay a 2% penalty to the Chinese Company if my USA customer can't fulfill the contract. Apparently, this is common in raw material supplier contracts, but I can't figure out who will write the bond. The contract represents about $24,000,000 per month so the bond needs to represent $480,000 per month or $5,760,000 per year.
Any ideas?
Any ideas?