Insuring export business as bank
Product at a glance
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 cover 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.
- 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 5 years. If the credit period is longer than 2 years, the requirements of the OECD Consensus must be observed.
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
- 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 (German version only) available
5 % for all risks
Country cover policy of more than 200 countries.