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Market bonds
& construction bonds
For your domestic and export markets, we negotiate on your behalf market bonding capacities with 1st rank insurer guarantors and assist you in their implementation.
- Issue your public & private market bonds
via insurers to free up bank credit lines - Digitize your deed issuance processes
and manage your facilities through e-caution portals - Benefit from insurers' legal advice
for drafting the bond market text on your international projects
Market bonds & construction bonds
Market bonds & construction bonds
The surety market is changing. The historical bank guarantors, subject to new and increasingly restrictive prudential rules, are today less present in market or legal surety issues for their corporate customers.
For your domestic and export markets, we negotiate market surety capacities on your behalf with 1stranking surety insurers and assist you in setting them up.
Benefits
The use of surety bonds facilitates the financing of the development of companies by providing the possibility of:
- conserving your borrowing capacity and your bank credit lines without mobilizing collateral
- securing the company's partners (Performance Bond)
- anticipating a cash inflow (Retention Guarantee)
- preventing a payment (e.g.: Supplier guarantee)
How it works
A guarantor insurer can offer a line of credit enabling you to secure all your activities on public or private markets in France and abroad.
Very common in the building and civil engineering sectors, as well as in the manufacturing industry, contract bonds in the form of Caution Solidaire or Garantie à Première Demande (GAPD) ensure that the contracting authority is compensated in the event of non-fulfillment of the contractual obligations of the prime contractor, in the context of the award of a contract.
Whether for a domestic public or international beneficiary, the Garantie A Première Demande (GAPD) enables access to a contract, to optimize cash flow by substituting for a sum of money immobilized as collateral, or more simply to guarantee a payment (supplier, rent ...) or any other obligation linked to a commercial transaction or contract.
Market bonds: the key to securing your domestic and international contracts
- Bid Bond
to be presented to respond to a call for tenders. - Down payment Bond
guarantees repayment of the advance paid. - Sub-contractors Bonds
guarantees the remuneration of sub-contractors involved in the project (Article L 231- 13 of the construction and housing code). - Warranty Bond
insures the project owner's withholding of payment. - Performance Bond
guarantees performance of the contract according to the original term. - Supplier Payment Guarantee
covers the settlement of your export purchases.
Construction bonds
Supporting you at every stage of your construction program
At every stage in the contractualization of construction projects, operators must provide proof of financial guarantees to secure the progress of operations and financial flows.
- The Garantie Financière d'Achèvement is a guarantee of repayment or completion of a real estate construction or renovation project. This guarantee protects the purchaser in the event of default by the property developer (art L261-1 of the French Construction and Housing Code).
- The VEFA (vente en futur d'achèvement), coupled with the GFA, provides the purchaser of a property program with the certainty that the guarantor will provide the financing for the successful completion of the building. It is also known as a Vente d'Immeuble à Rénover (VIR).
- Garantie du contrat de Promotion Immobilière (CPI) when the project owner entrusts the realization of a real estate project to a developer via a real estate development contract, known as a mandat d'intérêt commun; this guarantee ensures proper performance of the contract in the event of default by the developer.
- Contractor's payment guarantee to meet the obligation laid down in Article 1799-1 of the Civil Code, under a private works contract, to guarantee sums due to the contractor, in the event of default by the project owner.
- Guarantee of immobilization indemnity which prevents the developer from tying up large sums to validate promises of sale.
- Guarantee of payment of Rent or of taking possession within the framework of the signature of a BEFA (Bail en l'Etat Futur d'Achèvement).
Choose AU Group Caution, to benefit from the services of a high-performance team
- The provision of new Surety capabilities through AU Group's access to specialized construction and market surety guarantors.
- A reactivity in the execution of mandates for the study and placement of surety lines.
- The provision of online tools for the issuance and monitoring of e-c sureties.
- Taking charge of complex international issuance schemes (fronting).
- Advice in drafting tailor-made deeds (amount, duration, specific clauses).
- Syndicated surety lines set up between several insurer or bank guarantors on specific projects or day-to-day drawdowns.
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Frequently asked questions
All the answers to your questions about market bonds and construction bonds.
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A bank guarantee mobilises a traditional bank credit line and may impact the company's debt capacity. Conversely, a guarantee issued by an insurer does not affect debt capacity and thus allows financing lines to be preserved without tying up cash.
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Using an insurer frees up bank lines, simplifies issuance procedures and offers greater flexibility, particularly internationally. Insurers also provide valuable legal support in drafting guarantee texts in complex contractual contexts.
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Yes, first demand guarantees are widely recognised on international markets. They are a strategic tool for accessing export projects while reassuring foreign project owners of the company's ability to meet its contractual obligations.
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Bonds may be required at several stages of a project, whether public or private: in response to a call for tenders (tender bond), when advancing funds (advance payment bond), during the execution of works (performance bond) or upon delivery (subcontractor payment bond or retention bond).
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Yes, guarantee texts can be customised. This allows the clauses to be adapted to the specific features of the contract, the legislation of the country or the particular requirements of the project owner.
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Guarantees are governed by specific legal standards that vary depending on the country, sector of activity and nature of the project. In France, certain guarantees are imposed by the Civil Code or the Construction and Housing Code.
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Certain guarantees, such as the subcontractor payment guarantee (Law of 31 December 1975), are specifically designed to secure the contractual chain. They guarantee payment to contractors in the event of default by the principal as the general contractor, particularly on large-scale projects in the public and private sectors.
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Yes, AU Group is skilled in setting up cross-border guarantees, including in configurations with multiple guarantors for syndicated arrangements or via fronting mechanisms. This ensures that contracts abroad are properly executed and covered while adapting to local requirements.
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