Aug. 23 (Bloomberg) -- Sotheby's, which auctioned $3.24 billion of art in the first half, revised its limit for the amount of guarantees it will offer to sellers.

Sotheby's board approved this month a $500 million limit for guarantees, which consist of promises of minimum prices to collectors who sell art at auction, the company said in a filing with the U.S. Securities and Exchange Commission. On Aug. 21, Sotheby's had offered or promised guarantees on about $475 million of art, it said. It didn't disclose a previous limit.

Guarantees are rising as Sotheby's and its competitor Christie's International lure sellers to the market for the November sales in New York. London jeweler and collector Laurence Graff said this month he consigned 30 artworks to Christie's for future sale, taking guarantees in case art prices fall. If a guaranteed work doesn't sell, the auction house still must pay the promised amount.

``We always put a cap on our guarantee book, as it's how we run the portfolio of the business to manage and limit risks,'' said Sotheby's Chief Executive Officer William Ruprecht, in an interview and in e-mails. ``Of course we will make money on some and lose money on other individual deals, but we have made profits on our guarantee portfolio each and every year.''

In each of the past 14 years, including the first half of 2007, Sotheby's has made a profit on its auction guarantees, according to the filing. Guarantees at year end and at June 30 were about 16 percent of auction totals, the filing said.

Shares Rose

Sotheby's shares rose as much as $2.62, or 6.4 percent, to $43.67, and closed at $42.68, up $1.63, in New York Stock Exchange composite trading.

Christie's guarantees for its contemporary art sale in November so far are $130 million to $140 million, or about the same as before the May sale, said Brett Gorvy, Christie's co-head of contemporary art, in an interview.

Overall, guarantees at London-based Christie's, which sold 1.52 billion pounds ($3.05 billion) of art and collectibles at auctions in the first half, tend to be about the same as at Sotheby's, said Marc Porter, Christie's president of the Americas region.

``We are similar businesses so you can assume we have comparable positions,'' Porter said.

To contact the reporter on this story: Linda Sandler in London at lsandler@bloomberg.net.

Last Updated: August 23, 2007 17:08 EDT