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Insuring export business as bank

Credit Confirmation Risk Cover

Brief description

With buyer credit cover against credit confirmation risks a bank insures itself against the risks involved in the confirmation of a letter of credit that has been issued to finance an export transaction of a German company. It is available in particular for confirmed letters of credit and irrevocable purchase commitments.

Buyer credit cover against credit confirmation risks is not an independent form of cover. For this a Buyer Credit Guarantee is amended by Special Conditions. As customary with isolated Buyer Credit Guarantees the bank has to give all relevant details of the export transaction and has to 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.

For further information see also AGA-Report 175 (German version only).

Target group

  • German banks
  • Branch offices of foreign banks in Germany
  • Foreign banks (under certain conditions)

Payment terms of the covered transaction

Period of validity of the confirmed documentary credit (up to 12 months) plus a credit period of up to 12 months (for deferred payment credits)

Insurable risks

Buyer credit cover against credit confirmation risks offers protection against payment default particularly if

  • the borrower, i.e. usually the foreign bank which opens the letter of credit, becomes insolvent
  • the borrower fails to make payment within one month after due date (protracted default)
  • adverse measures are taken by foreign governments or warlike events arise
  • local currency amounts are not converted or transferred

Special features

Limited in time until the end of 2011, cover for Bulgaria, Iceland, Latvia, Lithuania and Romania, in principle classified as marketable risks, is possible. Further information (German version only).

Premium

  • Single premium calculated as a percentage of the credit amount covered (interest excluded) as well as specific processing fees
  • For a detailed calculation based on the horizon of risk there is an interactive premium calculator (category: short payment terms) available

Uninsured percentage

5 % for all risks

For advice please contact

  • Mr Andreas Gehring, phone +49 (0) 40 / 88 34 - 92 97
  • Ms Sissi Gerstenkorn, phone +49 (0) 40 / 88 34 - 95 49
  • Mr Michael Schröder, phone +49 (0) 40 / 88 34 - 90 83
  • Email: info(at)exportkreditgarantien.de

Downloads

PDF fileProduct Information Credit Confirmation Risk Cover (237 KB)

Word fileApplication for a Buyer Credit Guarantee against credit confirmation risks (German version only; 284 KB)

Word fileLetter of Undertaking: Buyer Credit Cover against credit confirmation risks (German version only; 90 KB)

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