Also known as a parent guaranty. A guaranty whereby a parent company, as guarantor, assumes the responsibility for the payment or performance of an action or obligation of its subsidiary by agreeing to compensate the beneficiary in the event of such non-payment or performance. This is in contrast to an upstream guaranty provided by a subsidiary of the debtor and a cross-stream guaranty provided by an affiliate of the debtor.

For more information, see Practice Note, Guaranties: Overview and Standard Document, Guaranty.