Retention bond

Trade finance - major project contracting.

Retention bonds are a type of performance bond, used as an alternative to retention monies.

When using a retention bond, the client agrees to pay the amounts which would otherwise have been held as retention, and instead a bond is provided to secure the amount that would have been retained.

The value of the bond will usually reduce after completion has been certified.

Also known as a retention money guarantee, or a retention guarantee.

See also

• Bond
• Contract
• Guarantee
• Performance bond
• Performance guarantee
• Retention
• Retention of title
• Retention ratio
• Trade finance