Buyer credit cover

• Buyer credit cover enables banks to insure their receivables arising from the financing of a German export transaction
• Two basic forms:
  - Combined buyer credit: When the exporter applies for a supplier credit along a bank that takes out buyer credit; this to cover the risk of non-disbursement of the buyer credit without having to pay an additional premium
  - Isolated buyer credit: The bank takes out isolated buyer credit cover against the risks arising from a buyer credit without the exporter taking out supplier credit
• Tenors:
  - Short-term: Up to 2 years
  - Medium- and long-term: 2 years and longer (up to OECD limits)
• Short-term buyer credit is generally not available for EU and OECD core countries
• Premium:
  - Calculated as a percentage of the order value covered as well as specific processing fees
  - Online premium calculator is available
• Buyer credit cover is for 95% of the loan amount
  • Euler Hermes can provide buyer credit for at most 85% of a supply contract

Buyer credit cover - Express

• Enables banks to insure their receivables arising from the financing of German export transactions having an order value of up to EUR 5 million
• Buyer credit cover is granted within 4 days after the submission of the application
• Tenors:
  - Short-term: Up to 2 years
  - Medium- and long-term: 2 to 5 years 
• Premium:
  - Premium calculated as a percentage of the order value covered as well as specific processing fees
  - Online premium calculator is available
• Buyer credit cover is for 95% of the loan amount

Credit confirmation risk cover

• With buyer credit cover against credit confirmation risk, a bank insures itself against the risks involved in the confirmation of an L/C that has been issued to finance an export transaction of a German company
  - Available for confirmed L/Cs and irrevocable purchase commitments
• Buyer credit cover against credit confirmation risks is not an independent form of cover—this a buyer credit guarantee amended by special conditions
• As customary with isolated buyer credit cover, the bank must give all relevant details of the export transaction and must provide a Letter of Undertaking and a Declaration on Combating Bribery signed by the exporter
• Partial cover of a quota share is possible on application

Securitization guarantee

• A solution for a bank in favor of which the Federal Government has already granted a buyer credit cover to obtain refinancing at favorable terms on the capital market via a special purpose vehicle or a mortgage bank
• From the viewpoint of the beneficiary, it is a 100% guarantee callable on first demand; in the internal relationship between the Federal Government and the lending bank, the terms and conditions of buyer credit guarantees remain applicable
• Guarantee is applied for in addition to a buyer credit guarantee

Supplier credit cover

• Supplier credit cover enables German exporters to insure trade receivables arising from a single export transaction (delivery of goods or rendering of services)
• Tenors:
  - Short-term: Up to 2 years
  - Medium- and long-term: 2 years and longer (up to OECD limits)
• Short-term supplier credit is generally not available for EU and OECD core countries
• Premium: Single premium is calculated as a percentage of the order value covered (interest excluded) as well as specific processing fees.
  - For a detailed calculation, there is an interactive premium calculator (German version only) available online
• Supplier credit cover is for:
  - 95% of political risks
  - Normally 85% of commercial risks (until the end of 2019—this may be increased to 95% by paying a premium surcharge)

Additional products

• Revolving buyer credit cover: Renewable 1-year policy that enables banks to insure their receivables under a loan agreement on the financing of a German exporter’s regular, short-term export transactions with a specific foreign buyer
• Leasing cover: A German lessor (manufacturer/exporter or leasing company) protects itself against the loss of the amounts owed by a foreign lessee under a cross-border lease
• Revolving supplier credit cover: Covers short-term trade receivables due to a German exporter as a result of supplies of goods and/or services to a foreign buyer on a continuous basis; the policy period is 1 year, and it will be automatically extended if notice of termination is not given in due time (at latest 1 month before the expiry)
• Framework Credit cover: Banks can insure their receivables arising from individual loans granted under a general loan agreement (credit line) to finance German export transactions
• Manufacturing risk cover: Enables German exporters to insure production costs incurred in connection with an export contract
• Whole turnover policy (APG): Cost-effective and easily manageable tool for German exporters repeatedly supplying goods and/or services to several buyers in different countries to insure short-term receivables (credit terms of up to 12 months)
  - The policy period is 1 year and about 2 months before the expiry, the exporter will receive a renewal offer
• Whole-turnover policy light (APG-light): Cost-effective and easily manageable tool for German exporters supplying goods to several buyers in different countries to insure short-term receivables (credit terms of up to 4 months)
  - The policy period is 1 year, and it will be automatically renewed if notice of termination is not given in due time
• Contract bond cover: Insurance against the politically caused or unfair calling of a bond to insure the exporter’s satisfactory performance of a contract
• Confiscation risk cover: Enables German exporters to insure the typical risks arising in connection with transactions abroad where it is not yet clear whether the goods will actually or finally be sold abroad when they cross the border or where a sale is not intended in the first place
• Constructional works cover: Insurance against arising in connection with the performance of construction contracts abroad
• Airbus Guarantee: Guarantee on first demand covering the risk of bad debt losses (excluding the structure risk)
  - Normally, the contractual set-up of the covered export transaction consists of a leasing contract, an isolated financial loan granted to a special-purpose company, and covered by the guarantee and a subsequent finance lease to an airline or an operating lease company (asset-based financing)

Other activities

• PricewaterhouseCoopers (PwC) provides investment guarantees for German companies and investors (direct investments abroad) and Euler Hermes provides UFK-guarantees (untied loan finance) for the purchase of raw materials