An account party will seek a standby credit guarantee if the bank's fee for issuing the guarantee is less than the value assigned to the guarantee by its beneficiary.

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The account party will only seek a standby credit guarantee if the cost of obtaining the guarantee (i.e. the bank's fee) is less than the perceived value assigned to it by the beneficiary. This ensures that the account party is getting a good deal for the protection provided by the guarantee.

An Account Party Will Seek a Standby Credit Guarantee If