Insuring export business as bank
Product at a glance
Hermes Cover click&cover BANK enables German Banks to obtain cover of buyer credits for straightforward export transactions quickly and easily online from the Federal Government.
In order to guarantee small and medium-sized enterprises a rapid processing, this type of cover is only available for standardised transactions. The focus is on transactions in countries classified in country risk categories 1 – 5 with credit periods of up to 5 years.
You can find out whether your transaction in question qualifies for this type of cover by means of the preliminary check for which you have to answer just five questions. Besides, you will also receive a premium indication in the course of the online application process, i.e. before you submit the application.
- German banks
- Branch offices of foreign banks in Germany
- Foreign banks (under certain conditions)
Payment terms of the covered transactions
- Short-term (up to 2 years)
- Medium/long-term (2 to 5 years)
Hermes Cover click&cover BANK offers protection against payment default if
- the foreign borrower fails to make payment within 1 months (0 months in the case of subsequent instalments) after the due date (protracted default)
Online application form.
Hermes Cover click&cover BANK is primarily suited for standardised business transactions with, among others, the following parameters:
- Order value of the export transaction for which the buyer credit is granted: up to EUR 5 million
- Terms of payment: only selected regular repayment profiles
- Maximum credit period: 5 years as of the commencement of the deliveries/services
- Countries classified in country risk categories 1 – 5
- Permitted foreign content: up to a maximum of 49%
- Of which local costs: 11.5% of the total order value
In particular, the following standardised features help banks to do small ticket business:
- Fixed premium as a reliable basis for calculations
- No need for recalculations and premium refunds; the premium is only recalculated in the event of an increase of risk
- Repayment schedule fixed at an early date free of any changeover scenarios
- The starting point equals the date of the first delivery, thus eliminating the lead time
- The actual commencement of the delivery/provision of services or eligible date for disbursement, starting point, the commencement of the Federal Government’s liability and the due date for the payment of the premium are always all a single date
- Elimination of the clause postponing the commencement of liability for the premium tranche
- Elimination of clauses postponing the commencement of liability for invisibly included services and/or disbursements at the latest date prior to performance provided that this does not exceed a threshold for services of 10% of the order value
- Premium due for payment not until the actual commencement of the delivery/services (and the buyer credit becomes due for disbursement)
- Elimination of the joint and several liability in the case of combined cover: the bank is the sole party liable for the payment of the premium, meaning that the monitoring/coordination process with the exporter is no longer necessary
The Bundesverband deutscher Banken e.V. (Association of German Banks, BdB) and the Bundesverband öffentlicher Banken Deutschlands e.V. (Association of German Public Banks, VÖB) will jointly commission a legal opinion on the effectiveness and enforceability of Buyer Credit Guarantees for the purposes of Article 194(1) first subparagraph of the Regulation (EU) No 575/2013 (Capital Requirements Regulation (CRR)). After its completion the legal opinion will be made available under certain circumstances and upon request to institutes governed by the CRR. Such requests should be made to the BdB or VÖB through the respective national banking association to which the institute in question belongs.
- Depending on the product parameters chosen, you will be shown the premium amount as “all-in premium” in the course of the online application process.
- 5 % for all risks
If a bank applies for Hermes Cover click&cover BANK, the exporter can apply for Hermes Cover click&cover EXPORT without having to pay any extra premium to protect himself in particular against the risk of non-disbursement under the buyer credit.
If necessary, Hermes Cover click&cover BANK may be supplemented with:
- Securitisation Guarantee (for refinancing on the capital market – improved conditions in favour of the refinancing institution)
- Covered Bond Guarantee (for refinancing in the bank’s own covered bond business – cover of the receivable seizure risk in favour of the covered bond creditors)
- Securitisation Guarantee for the KfW Refinancing Programme (opens the possibility to participate in the KfW programme aimed at providing liquidity by means of refinancing Hermes-covered receivables)
Applications for this product are made online
Country cover policy of more than 200 countries.