Risky loans to get lease of life from guarantees

When Chinese company Wugang Trading launched a loan backed by both a bank guarantee and a letter of comfort from its parent, it immediately caught the attention of bankers eager to mitigate credit risks. Although guarantees and standby letters of credit (SBLC) do not feature regularly in Asian syndications, there are plenty of incentives for companies that take up these structures, write Shruti Chaturvedi and Rashmi Kumar.