What is Surety?
Surety is an obligation by a financial institution (which for our purposes is an insurance company) to guarantee the contractual or commercial obligations of one party, the Principal, to another, the Beneficiary.
Surety bonds can be required under the terms of a contract, or in accordance with statutory or licensing requirements, to secure the performance of the Principal in its commercial or contractual obligations to the Beneficiary.
As illustrated below, a surety bond is a tri-partite agreement issued by an insurer, the Surety, providing monetary compensation to the Beneficiary in the event that the Principal fails to perform its contractual or commercial obligations.
A counter-indemnity is taken from the Principal (and potentially its parent company) allowing the Surety to seek reimbursement in the event the Surety has to pay a claim under the surety bond.
Other service benefits:
- Pricing: consistently delivering competitive terms.
- Market influence: as a leading income generator to the surety insurers we have excellent buying power.
- Bespoke solutions: surety solutions for challenging, innovative and complex transactions.
- Global & local solutions: facilities on a local, regional or global basis.
- Delivery capacity: access to all major providers ensures all capacity options are fully explored.
- Industry expertise: expertise across multiple industry sectors.
- Syndication: organisation of multiple surety capacity to meet large surety bond requirements.
- Document analysis: market leading surety bond review capabilities including the analysis of contract.
- Facility management: full service administration of all day to day surety bond needs and arrangement of competitive surety bond facilities.
Get in touch with our specialist team
Types of Surety bonds
Surety is traditionally divided into two categories
Surety bonds are widely used and are a critical financial tool in many industries:
Why are insurer issued surety bonds superior to bank surety?
Bonds issued by a bank diminish available headroom underlines of credit and can limit opportunities for growth.
Insurers generally issue surety bonds on an unsecured basis, being provided on the assessment of a company's financial strength and proven track record.
The issuance of surety bonds by an insurer does not impact working capital or bank borrowing facilities, and therefore can provide a useful boost to a company's liquidity.
Meet the team
Executive Director | Head of Surety
James has largely focused on working with large international, Top 250 E&C firms, who previously solely relied upon the banking market to support their guarantee obligations. James has structured solutions for these companies via bank fronting and syndication – most notably with Petrofac, Tecnicas and Mainstream over the past twelve months where he has been involved in arranging over $1 billion worth of capacity.
Executive Director | Head of Syndications
Warren Withfield is a Loan Market specialist with over 20 years’ experience in Corporate and Investment Banking. He previously worked in Trade Finance for Investec and Corporate coverage for Commerzbank before joining MUFG where he spent the past 17 years in their Loan Syndications Origination team within MUFG Securities. Warren has recently joined Howden CAP to establish a dedicated Global Syndication desk supporting corporate clients, banks and sovereigns with bank-surety syndication transactions.
Executive Director | Head of Bank Fronting
Patrick is a senior FIG and investment banker with over 30 years’ experience across capital markets and insurance banking. Joining Howden after 8 years at ANZ, Patrick supports in the creation of a dedicated bank fronting desk in order to support clients’ bank guarantee and SBLC requirements globally, as well as assisting partner sureties and partner brokers.
Divisional Director | In House Solicitor
Matthew is an In-House Solicitor and Divisional Director sitting within the Surety team in London. Matthew is involved in all aspects of the Surety business and in particular structuring transactions and reviewing and analysing counter-indemnities, bonded contracts and guarantee wordings. Before joining Howden, Matthew worked in private practice as a corporate and commercial solicitor at Maxwell Winward (now Mills & Reeve LLP) and Trowers & Hamlins.
Divisional Director | Head of UK and Ireland
With over 5 years’ experience in the surety market, Tom has significant experience across domestic and international guarantee requirements, both on a direct and syndicated basis. This includes supporting Global 250 companies with their guarantee requirements. He has recently worked on providing over €600 million of capacity for one of Europe’s top infrastructure projects, the Fehmarn belt Tunnel.
Divisional Director | Head of Africa and Emerging Markets
Kevin has 27 years of investment banking experience having structured credit solutions for multi-nationals and syndicated risk amongst a diverse range of institutions. Kevin utilises his holistic understanding of credit and insurance markets to deliver the most optimal terms for clients.
Associate Director | Head of Business Development
Cerys joined the Howden Surety team in 2016 and is responsible for driving the new business initiatives and client development of the Surety team both in the UK and globally. Cerys has over 10 years’ experience in the Surety industry and over 25 years’ experience of business development in a variety of industry sectors from commercial real estate and construction to IT.
Danielle joined Howden in May 2022 from QBE, where she spent just under 8 years in the surety team, starting as an underwriting assistant in 2014, and departing in 2022 as a senior underwriter. Danielle has significant experience in bonding UK construction clients, as well as more non-standard transactions and schemes.
Abigail is a Broker within the Surety team at Howden, working with UK & Irish clients to support their bonding requirements. Alongside this, Abigail is responsible for the management of the client’s day to day surety needs which include setting up facilities, reviewing contract wordings, obtaining competitive terms and finding solutions for their transactions as well as securing new business for the team.
Teresa Baena Salado
Teresa Baena Salado
Senior Account Executive
Teresa Baena is a qualified lawyer in Spain, with experience in banking and law firms. Teresa's role in the Surety team is to be the link between the Surety team in Iberia and London, as well as facilitating the legal review of Spanish companies. Teresa also coordinates the Spanish market, so Teresa's role includes looking for new business opportunities in the Spanish market.
Sam has been a part of the surety team for one year, and has been involved in a number of our large structured transactions for our international clients. Sam has gained experience in producing credit memos, drafting and reviewing bond wordings and facility agreements, as well as building strong relationships with the wider surety markets.
Charles joined Howden at the end of 2021 as one of three graduate hires for the team. He has an educational background in Law and attended the University of Bristol. Since joining, he has worked primarily in the international team, helping to support our clients with their global guarantee needs. In particular, he has focused on structuring bank-fronted solutions, as well helping to grow our presence in Africa.
Eason joined the Surety team in October 2022 and provides support both on the broking and operational side of the business. Since joining, he has worked primarily in the UK & Ireland team, and is responsible for the reviewing of bond wordings, maintaining facilities to ensure our clients are most efficiently utilising their facilities, exposure management, and to facilitate bookings to help transactions close smoothly.