An Irish construction contractor secured a major residential development in the UK, valued at over £30 million (€34 million). The award of the project was conditional on providing an essential performance bond, but the client faced unanimous rejection from the Irish surety market due to its limited trading history and the project’s complex on-demand bond requirements.
BBi Ireland was engaged to resolve this high-stakes challenge. By leveraging its international surety network and structuring a cross-border indemnity supported by the client’s wider group, BBi Ireland secured the required financial guarantee. This solution immediately unlocked the multi-million-pound project, allowing the client to commence work without delay.
Key client information
The client is an incorporated construction firm based in Ireland, specialising in large-scale residential and commercial developments. Although recently established in Ireland, the business forms part of a mature international group with a strong operational track record across different countries.
The awarded project involved the construction of approximately 170 high-value apartments in a major UK city, representing a £30+ million opportunity for the company as it expanded into a new market.
Company type: Newly incorporated Irish construction firm
Specialisation: Large-scale residential and commercial developments
Project value: Over £30 million
Structural context: Local entity supported by a well-established international parent company
Market challenge: Irish surety providers assessed only the limited trading history, without recognising the strength and financial stability of the wider group
The core challenge: Overcoming local market barriers to secure a £30+ million on-demand bond
Despite winning a lucrative, flagship contract, the client found itself at a commercial standstill. The awarding of the £30+ million project hinged entirely on the immediate provision of a robust performance bond.
The key difficulties were numerous and technical.
- Limited trading history
The local Irish company hadn’t yet accumulated the typical three years of trading experience or proven contract track record required by domestic surety underwriters for a project of this scale and complexity. - Market exhaustion
The client had already approached and exhausted all options within the Irish surety market, with all providers declining to underwrite the risk. - Much higher surety risk with the type of bond required
The contract stipulated an on-demand bond, a common requirement in many European markets. An on-demand bond transfers a significantly higher, immediate risk to the surety provider though. Securing approval to meet the specific wording of an on-demand bond, particularly for a newly formed company, was deemed almost impossible by local firms. - Funder approval
The final solution needed to be acceptable to the employer but also to their finance providers, who maintained stringent requirements for the security provided.
The consequence of failure would have been the immediate loss of the contract and severe damage to the client’s reputation in a new market.
The solution: International placement and cross-border risk structuring
BBi Ireland approached this challenge by immediately looking beyond the constrained local market, leveraging our deep, established relationships with reputable international surety markets. We transformed the risk profile by focusing on the strength and low-risk profile of the global parent company.
The solution involved a structured, highly consultative process that went far beyond placing a policy.
- International market access
We identified a key surety partner in a specialist international jurisdiction who possessed a greater understanding of the client’s parent company and its operational history. - Structuring cross-company indemnity
The cornerstone of the solution was negotiating for the established parent company to provide a cross-company indemnity. This crucial step effectively provided the surety partner with the security and financial assurance of an established global business, overcoming the subsidiary Irish company’s lack of track record. - Technical wording negotiation
We conducted detailed negotiations with the new surety partner to secure their agreement to the technically difficult on-demand bond wording. This involved carefully mitigating their perceived risk exposure for a newly formed business. - Stakeholder approval
BBi Ireland facilitated multiple discussions with the project’s employer and their finance providers to successfully secure their crucial approval for the international underwriter.
This ensured all contractual and funding requirements were met.
The outcome: Successful awarding of a £30+ million contract
BBi Ireland successfully navigated this complex cross-border challenge, delivering the essential financial guarantee and validating the client’s ability to execute major international developments.
The client moved from a position of commercial paralysis – the risk of losing a flagship contract – to successfully beginning work on a £30+ million development.
Tangible outcomes
Immediate project start
The client was authorised to begin work immediately on the residential development, ensuring their foothold in the new UK market.
Overcoming local barriers
BBi Ireland secured a surety solution from a global jurisdiction, effectively bypassing the limitations of the local market and setting a vital precedent for the client’s future UK and international growth.
Resolution of complex wording
Successful negotiation and delivery of the technically difficult “on-demand bond” wording, fully meeting the stringent requirements of the project funders.
With BBi Ireland’s support, this construction company was able to turn a critical commercial roadblock into a major success. By leveraging international market connections and securing a bespoke cross-company indemnity, BBi Ireland delivered the essential, highly complex on-demand performance bond.
This direct action immediately resolved the client’s local market limitations, validating their business model and securing the start of the £30+ million UK development.
