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Irrevocable Standby Letter of Credit

Maryland

We are buying out a partner who was listed as a guarantor on two construction bonds. The projects are nearly finished, they total $2.4M in contract value, and we have been paid to date $2.0M. The Bonding company will relinquish the partners secured interest if we provide a $500,000 ISLOC. The other option is to re-issue the bonds, which is not likely to occur and considerably expensive. The remaining two partners are still secured parties on these bonds and such moving forward. Is this a good Idea? How does this negatively impact our business/credit?

1 reply

Sep 10, 2021

Rueben, thank you for reaching out! Due to the legalities in this situation, I want to make sure you get the answers you need. Please reach out to our Legal help - a group of attorneys that will be able to provide advice and detail, specifically in Maryland.

You can reach them here

Please let me know if I can help any further.

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