What are Petroleum Bonds?
Petroleum Bonds are a form of security known as Supply Bonds for the payment of the delivery of fuel providing retail and wholesale petroleum dealers with an alternate form of contractual security to their existing bank Guarantee.
Since 1995, PetroBonds have been the leading provider of Petroleum Bonds in the Australia and New Zealand market. From the major oil company’s perspective these bonds are identical to a bank guarantee in that they are unconditional, irrevocable and pay on demand instrument.
The key benefit of a Petroleum Bond from Petrobonds is unlike bank guarantees Petroleum Bonds do not require tangible security by way of a General Security Agreement (GSA) or mortgage collateral in the form of cash or property. As no tangible security is required to secure a Petroleum Bond, it provides Petroleum Distributors and Retail Service Station Owners with greater financial flexibility to concentrate their efforts on growing their businesses, without hard earned assets being tied up by a bank as security.
Petroleum Bonds provide greater financial flexibility in that they offer a 1:1 Net Tangible Worth (NTW) versus a bank that generally offer a Loan to Value Ratio (LVR) of 65% of the banks valuation of that asset.
The immediate advantage of using a Petroleum Bond is it allows you to maximise the capital in your Balance Sheet. Terms are also covenant free, so it avoids having those tough discussions with the bank when and if breaches may occur. The traditional way of securing a bond through a bank is outdated and highly inefficient notwithstanding the opportunity cost to your business, it’s a “no brainer.”
Oil Companies and Bulk Fuel suppliers including BP Australia & BP Oil New Zealand, Caltex Australia, Glencore Oil, Mobil Oil/Exxon Mobil, Puma Energy Australia, Viva Energy Australia, Liberty Oil, United Petroleum, Lowes Petroleum, Mogas/Reliable Petroleum, Petro Diamond, Pacific Petroleum and Wessel Petroleum all accept CBL Petroleum Bonds.
The process of applying for a Petroleum Bond is kept simple and our Relationship Managers are there to assist you with the application process, providing a checklist of information required and answering any queries that may arise.
If our PetroBonds product is of interest to your business please feel free to contact our Relationship Managers as per the details following. Rohan Hankinson will also be attending ACAPMA’s Asia Pacific Fuel Industry Forum on September 13 & 14 in Melbourne.
Stephanie Fox, Relationship Manager, Petrobonds, 02 8274 2881, email@example.com.
Rohan Hankinson, Relationship Manager, Petrobonds, 02 8274 2868, firstname.lastname@example.org.
CBL Insurance Ltd purchased the Petroleum Bonds business from Corporate Indemnity in September 2016.
Petrobonds are underwritten by Assetinsure through an MGA with CBL Insurance Ltd.
Assetinsure Pty Ltd is a specialist APRA regulated insurance company and a member of the CBL group.
CBL Corporation is listed on both the ASX and New Zealand Stock Exchange offering coverage for select product lines focusing on companies and financial institutions. Classes of business include Surety, Contact Performance Bonds, Lease Bonds, Mining Rehabilitation Bonds, Credit Enhancement and a range of specialty insurances including builders’ warranty, agricultural income protection insurance (crop), strata, Enthusiast motor.