Back To Back Bank Guarantee Template for New Zealand

The Back To Back Bank Guarantee is a sophisticated financial instrument utilized in situations where a bank needs to provide a guarantee to another bank to support an existing guarantee arrangement. This document is particularly relevant in international trade and cross-border transactions where local bank support is required in the beneficiary's country. Under New Zealand law, it incorporates essential elements including security provisions, demand mechanisms, and compliance with banking regulations. The document is structured to ensure perfect alignment with the original guarantee while maintaining the rights and obligations of all parties involved. It includes specific provisions for payment procedures, documentation requirements, and enforcement mechanisms, making it suitable for complex commercial transactions where multiple jurisdictions may be involved. The guarantee typically mirrors the terms of the original guarantee while incorporating necessary local law requirements and banking practices.

1. Parties: Identifies all parties to the guarantee: the issuing bank, the counterparty bank, and reference to the principal

2. Background: Explains the context of the back to back guarantee, including reference to the original guarantee and the underlying transaction

3. Definitions: Defines key terms used throughout the document, including 'Original Guarantee', 'Counter-Guarantee', 'Demand', and 'Guarantee Amount'

4. Issue of Guarantee: Details of the guarantee being issued, including amount, currency, and effective date

5. Mirror Terms: Specifies how the terms mirror the original guarantee and the relationship between the two guarantees

6. Demand Procedure: Detailed process for making and handling demands under the guarantee

7. Payment Terms: Specifies payment obligations, timing, and method of payment

8. Bank's Rights and Obligations: Outlines the rights and obligations of both banks involved in the arrangement

9. Representations and Warranties: Standard representations and warranties from all parties

10. Security and Indemnity: Security arrangements and indemnification provisions

11. Termination: Conditions and process for termination of the guarantee

12. Governing Law and Jurisdiction: Specifies New Zealand law as governing law and jurisdiction for disputes