Product Description

Credits to be made available to beneficiary under the guarantee of KGF by the CREDITOR shall be provided in the letters of guarantee to be given for the guarantee of prepayments made by the borrower based upon the export registered contracts drawn up for ship building by and between borrower and beneficiary.
Letter of guarantee credit to be made available under the guarantee of KGF shall not be provided for the credits to be procured abroad under any circumstances.
Letters of guarantee to be made available under the guarantee of KGF shall be drawn up in terms of foreign currency requested in the contract executed by and between the borrower and beneficiary.

The contract executed by and between the borrower and beneficiary shall be drawn up in compliance with the legal authenticity requirements and international standards of ship building contracts. In case the borrower reneges on the contract, except for the event that beneficiary offends against the provisions of contract, it shall be clearly set forth in the contract executed by and between the borrower and beneficiary that it does not have the right to demand previous payments back and the letters of guarantee issued for such payments cannot be indemnified, and such letters are invalid even though they have not returned back.
The subject of the letter of guarantee to be issued in favor of the beneficiary against the guarantee of KGF shall be limited with the guarantee for repayment of prepayments made or to be made to the beneficiary by the borrower for the ship building in subject of the contract executed by and between the borrower and beneficiary, as well as the penal conditions in case the beneficiary violates the provisions of the contract.

The letters of guarantee issued in favor of the beneficiary under the guarantee of KGF can be issued on behalf of the borrower or its banks indicated by the borrower, as per the contract executed by and between the borrower and beneficiary.

Letter of guarantee to be issued in favor of the beneficiary under the guarantee of KGF can be drawn up step by step and at once in accordance with the payment conditions set forth in the contract executed by and between the borrower and beneficiary. However, sum of letters of guarantee to be issued shall not exceed the amount set forth in the contract executed by and between the borrower and beneficiary.

In case the letter of guarantee credit to be provided in favor of the beneficiary is to be made available step by step instead of at once, following the letter of guarantee to be issued for the first segment stipulated in the contract made by and between the borrower and beneficiary, the CREDITOR shall seek the written approval of KGF for each letter to be drawn up. KGF shall request from the classification society for the report issued so as to compare the ship building level realized by the payment amounts made by the borrower by considering the contract requirements and remaining payment amount.

The term of the letters of guarantee to be issued under the guarantee of KGF shall be minimum 6 months and maximum 36 months. In case a certain guarantee amount and term is set forth in the contract executed by and between the borrower and beneficiary, a letter of guarantee can be drawn up so as not to exceed 5% of the contract price for the guarantee term on condition that is to be kept in the guarantee limit, and such term shall not exceed 6 months.

In terms of letters of guarantee made available under the guarantee of KGF, in case it is stipulated in the contract executed by and between the beneficiary and borrower that the letters of guarantee are to be arranged step by step, the maturity of each letter is limited to maximum 36 months as from the date of issuance of the first letter of guarantee so as not to exceed the period specified in the contract.

Although it is regulated in the ship building contract executed by and between the beneficiary and borrower that the delivery period is to be less than 36 months, the term of the contract executed by and between the beneficiary and borrower can be extended up to 36 months with the approval of KGF in order to benefit from the guarantee of KGF in case it is understood that the building process of the ship in subject of the contract cannot be completed within this period or the process of ship building is to be delayed, by the determination of classification societies and surveyor’s report.

Resource for Guarantee

Treasury Undersecretary Funds

Related Financial Institutions / Corporations

KGF shareholder banks, leasing companies of those banks and provided that operating under law no. 6361, other leasing companies & finance companies if they hold KGF share.

Product Maturity

The period of the Letter of Guarantee is minimum 6 months and maximum 36 months.

Guarantee Limit

Total Guarantee Limit per Enterprise: USD 70 million
Guarantee Limit for a Risk Group: USD 200 million

Maximum KGF Guarantee Rate

70%

Fees and Commissions

The guarantee commission is collected based on the guarantee amount of KGF in advance during the credit extension for the first year, and at rate of 1% in advance based on guarantee risk for ever year in the consecutive years.

Application Conditions

It is required that the beneficiary makes contract with the foreign borrower for ships with at least 1000 DWT or 500 GT, towboats, auxiliary ships to serve any kinds of floating platforms to be constructed for seismic, oil and natural gas exploration / drilling purposes, yachts with 24 meter and above, and any kinds of vessels driven by hydrogen, natural gas (LNG, CNG) or hybrid technologies, built or to be built as export registered based on the borrower finance,
In terms of letters of guarantee credits made available under the guarantee of KGF, the delivery period does not exceed 36 months in the ship building contract executed by and between the borrower and beneficiary,