Insuring export business as bank
Product at a glance
Shopping line cover aims at providing access to the procurement programmes of large foreign customers with good credit ratings. To achieve this, it offers banks the possibility to obtain cover for a credit facility granted to be drawn on for this purpose. It may be used for export transactions which have been executed and paid for in full (reimbursement procedure). For the utilisation these transactions of various German exporters are pooled in one or several tranches each with a uniform repayment profile. The respective loan receivables are covered by the Federal Government under shopping line cover, a buyer credit guarantee which is modified by Special Terms and Conditions for this type of business.
- German banks
- Branch offices of foreign banks in Germany
- Foreign banks (under certain conditions)
Payment terms of the covered transactions
- Short-term (up to two years)
- Medium/long-term (2 years and longer)
In this context, the internationally permissible credit period is reduce by the time during which the credit facility can be drawn on.
Shopping line cover offers protection against payment default particularly if
- the borrower 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 of transferred
- One-time premium calculated as a percentage of the credit facility covered (interest excluded) as well as specific processing fees
- For a detailed calculation there is an interactive premium calculator (German version only) available
5 % for all risks
If required, shopping line cover can 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 (creates the possibility to participate in the KfW Programme with which funds can be made available by means of refinancing receivables covered under a Federal export credit guarantee)
The exporters may apply for cover of their own apart from shopping line cover in favour of the bank (e.g. manufacturing risk cover).
Shopping line cover has the following, distinctive features:
- Issuing of a Letter of Interest (LoI) to the foreign buyer possible including an indication as to the amount of the credit line
- Foreign content of up to 49% of the amount of the credit tranche permissible (rules governing local costs must be respected)
- Special arrangements for small tickets (transactions worth up to EUR 5 million)
- Option to retroactively include transactions already undertaken before the application was made (“reach back”)
- Simplified administrative procedures (among other things: only one credit documentation required, uniform repayment profile, bundling of loan disbursements in tranches)
Shopping line cover is also available for short-term credits with the exception of exports on credit terms of up to two years to EU and core OECD member states (i.e. EU member states, Australia, Iceland, Japan, Canada, New Zealand, Norway Switzerland, USA and United Kingdom); for a limited period of time until 30.06.2021, Export Credit Guarantees of the Federal Republic of Germany are also available for these normally marketable countries.
The Association of German Banks (Bundesverband deutscher Banken e.v. – BdB) and the Association of German Public Banks (Bundesverband Öffentlicher Banken – VÖB) have jointly obtained a legal opinion on the validity and enforceability of buyer credit cover for the purpose of Art. 194 (1) subpara. 1 of the Regulation (EU) no 575/2013 (CRR). Under certain circumstances the opinion can, upon request, be made available to institutions within the meaning of the CRR. Requests should be directed to the BdB or the VÖB via the respective national banking association of which the institution in question is a member.
This product can be applied for online
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Your fast lane to indemnification
In order to get assistance with asserting a claim under shopping line cover, you can use our Excel tool.
The following tutorial explains the structure, required entries and the benefits of the tool (in German only).
Information on the country cover policy on more than 200 countries is available.