a commitment given by one bank (Instructing Bank) to another bank (Issuing Bank) in support of the former's request to issue a Guarantee. The Counter-Guarantee will act as the Instructing Bank's Counter-Indemnity in favour of the Issuing Bank.
What is the difference between a direct guarantee and a counter-guarantee?
The direct guarantee is issued by Danske Bank and sent direct to the beneficiary or sent via his bank. In contrast, if Danske Bank asks a foreign bank to issue a guarantee on our behalf, Danske Bank issues a counter-guarantee as security.
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