Forfaiting Glossary:
Glossary items beginning with: p
Parastatals:
An organisation which is indirectly controlled by the government.
Performance Bond:
A guarantee to a buyer that the supplier will comply with the terms of a contract.
Political Risk:
The risk of borrower-country government actions preventing or delaying payment of funds due to parties in other countries. Many government export credit agencies also include war, civil war, revolution, or other military or civil disturbances in their definition of political risk. Some also include physical disasters such as cyclones, floods or earthquakes.
Premium:
The cost to the buyer of an insurance policy.
Progress Payment:
Payments made in stages in the course of a supply contract.
Promissory Note:
A promissory note is normally issued by a buyer, such as an importer for example, promising to pay the seller at a future date - effectively like an IOU. The right to receive payment under a promissory note may be transferred by endorsement unless endorsement or transfer is expressly prohibited.
Protest:
A legal document showing that a Bill of Exchange/Promissory Note (debt instrument) was presented to the drawee/issuer for acceptance/payment and was refused.
Proven Default Bond:
A bond issued by a surety or insurance company which is a commitment to perform under a contract and/or pay a sum of money. There must be firm proof of the contract being defaulted on.