What are acceptable guarantees for the loan? Who is creditworthy?
Answer – For public sector / government customers, a sovereign guarantee or a municipal guarantee is usually required to secure the transaction. An off-shore escrow account may be acceptable for revenue-generating public sector entities. Private sector customers are required to produce three years of audited financials in keeping with international accounting standards to determine if the borrower is creditworthy on a stand-alone basis without an outside guarantee. We have found that most private borrowers in emerging markets require either a local bank to provide a guarantee or a guarantee from a parent company, if available.
