Financial and banking levers provided by Eximbank

Eximbank’s current offer of financing, guarantee and insurance products meets the whole array of exporters’ requirements.

Eximbank’s core products range as following:

1. Guarantees

The guarantees issued by Eximbank are meant to back the Romanian exporters in their endeavors to carry out international transactions and participate in international bids by paving their way to external markets.

Eximbank takes risks not incumbent on other commercial banks, while supplying companies with guarantees at competitive prices in furtherance to existing collaterals, to enable them to apply for loans or letters of guarantee.  The guarantees are described as irrevocable and unconditional, duly acknowledged by the lending banks as risk suppressing elements.

Guaranteeing items:

• Export guarantees for complex projects and output undergoing long manufacturing process – supplementing those warranties requested by commercial banks in order to issue letters of guarantee in favor of exporters, also enabling the use of part of exporter owned assets to set up collaterals for other funding so as to achieve the output of complex projects and items undergoing long manufacturing processes. Such guarantees are extended to exporters of equipment, rigs, turn key objectives involving high costs and longer manufacturing duration which are distributed in countries of higher risk level.
  
  Amount: max. 80% of the value of letter of guarantee
  
  Term: 5 years max.

• Export guarantees for general goods (new product) – in furtherance to warranties requested from exporters by the commercial banks issuing letters of guarantee;
  
  - to be regarded as counter-guarantee for various types of bank guarantees:

  • Bid bonds

  • Advance payment bonds

  • Performance bonds and other export specific guarantees, including those for temporary import of equipment as part of the export production.

  Amount: max. 80% of the value of letter of guarantee

  Term: 2 years max.

• Guaranteeing credits extended for export intended output (new product) – available beside personal warranties set by exporters for credits engaged with commercial banks in order to achieve export output / fulfill export services – thereby taking over part of the risk incurred for credit granting. Hence, the exporters may devote time and resources to give a sharper competitive edge to products; the guarantee is extended on request from the exporter – goods producer or service performer.
  
  Amount: max. 80% of the credit (principal) value
  
  Term: 2 years max.
  
  The domestic content should amount to at least 60% of export contract (sole responsibility statement); complex exports are excepted.
  
  Financing value: accounts for max. 85% of export contract.

• Guarantees for SME-s (new product) – facilitating SME-s access to financing, by supplementing personal warranties of the credit applicant up to the level required by commercial banks to grant credits.
  
  SME-s business development and upgrade are upheld through guarantees of credits granted by banks for investments/ working capital, thereby directing SME-s towards larger credits meant to boost related activities.
  
  Amount: max. 80% of the credit (principal) value
  
  Term: 7 years max. alongside with credit term and currency.

• Micro-guarantee (new product) – i.e. guaranteeing RON credits signed by:
  
  - SME-s for business support and development
  
  - Companies for funding activities in the following domains: infrastructure and public utilities, regional development, research & development, environmental protection, staff hiring and training.
  
  Amount: max. 80% of the credit (principal) value, without exceeding RON 400,000.

 Letters of guarantee

• Bid bonds – enabling the Romanian exporters to reach external contracts without resorting to their own resources in order to fulfill mandatory conditions of bid organizers;

• Advance payment bonds –vouching for Romanian exporters creditworthiness in using amounts received in advance within commercial agreements to fulfill assumed obligations;

• Performance bonds – enhancing exporters capacity of achieving products/services on terms and conditions stipulated in commercial contracts concluded; the guarantee gives every assurance to its beneficiary– the external buyer – that the exporter is bound to fulfill obligations assumed through the sale contract, notably to accomplish work according to parameters agreed or to deliver goods at quality level and term requested;

• Retention money bonds - exporters capacity of achieving contract obligations is guaranteed during the technical warranty period of exported goods/services; hence the importer is confident that the exporter will provide satisfactory operation during the said period for the equipment/installation made, concurrently enabling the exporter to collect in full the export counter-value;

• Customs bonds – guaranteeing payment of customs duties in case the temporary imported equipment for making export output fails to be returned in accordance with contract terms and conditions; 

 2. Insurance

The insurance issued by Eximbank covers commercial and political risks related to term payment exports, short and long-term risks associated to external buyer or to his country. Commercial risks pertain to the debtor (buyer) stated insolvency or his protracted default, while political risks  refer to the occurrence of the state of war, riot, or general moratorium as declared by the government of debtor’s country.

By means of such an instrument, Eximbank is willing to particularly bolster the expansion of Romanian companies to emerging markets such as the Russian Federation, Moldova, ex-Yugoslavian countries, since the insurance policies operate by sharing risk with the exporter.

Taking over part of the export transaction–related risks onto such markets means that the Romanian State secures most of the income resulting from transactions to be safely collected by the exporter, irrespective of foreign partner’s financial standing or of the prevailing conditions in the country of export destination.

Eximbank insurance policies:

• Short, medium or long-term insurance policy against external non-payment risk guaranteeing that the exporter will collect most of his export proceeds, in spite of his external partner’s failure to fulfill assumed payment obligation within commercial agreement, for reasons pertaining to developments in his financial statements or to the evolution of political condition in the country of export destination. The exporter may apply for loans through assignation of policy insured commercial receivables;

• Insurance policy of export output credits – sticks to the principle of covering losses resulting from failure to disburse the credit granted by commercial banks to the exporter due to production un-appropriate performance of the latter;

• Buyer credit insurance policy – provides safety to the lending Romanian bank granting the buyer credit for exports promotion and sustain, therefore funding either the importer, or his bank. Through such an insurance policy the disbursement failure risk of the buyer credit for reasons due to the borrower’s financial statements or to the political condition of his country is offset by the commitment made by the Romanian State accordingly.

• Insurance policy of Romanian capital investments abroad – conveys confidence to the Romanian investor who is willing to expand business on markets located in countries of highly unstable political level. By means of this instrument, the investment undertaken in such countries is secured against the risk of failing to repatriate proceeds and of losing the amounts invested, subsequent to political decisions impairing foreign investors in that country.

3. Financing

RON financing is made available by Eximbank, ensuring those resources sought by companies both for current business and for development and upgrade.

Credits to be granted range as following:

• Credits for specific use or revolving credit lines which are tailored to exporter’s relevant activities and are meant to cover for the expenses required to achieve export output or exports; the exporter is granted financial support both during the performance of goods and after delivery of goods and services to the end-user until collection of related amount;

• Credits for complex exports and products undergoing long manufacturing process – granted on medium term by duration and features of funded contract; to be considered as specific solution focused on the project to be implemented by the Romanian exporter;

• Investment Credits intended to expand production capacities, to develop and upgrade exporters’ business; destination: acquisition of equipment, construction works, grounds, construction and assembling activities, working capital to tackle the investment project;

• Co-financing credits for R & D activities – designated to give an impetus to companies to perform such activities and apply results to improve efficiency and market competitiveness;

• Investment credits for environmental protection projects – in order to remedy or prevent damage inflicted to the environment or to natural resources, as well as to capitalize on such resources, i.e. power saving measures and use of renewable power sources;

• Credits directed at the financing of training programs and of new job opportunities – eventually leading to increased quality and competitiveness of exporting companies;

• Credits aimed at developing and modernizing SME-s business resulting in higher production capacities, multifarious products driving part of production towards export on the grounds that domestic market demand is already covered by domestic production, without resorting to imports to this end.

4. Partial interest rate offset for RON loans (new product)

Financing item designed to enhance the use of RON loans for upgrading and boosting companies’ competitive business. The offset is targeting those RON loans made by companies after January 2006 to spark the eligible domains. One economic company may apply for the reimbursement of the interest rate paid for one or several loans, to the amount of max. 50% of the credit with the offset being granted in the Quarter before the application, also abiding by the lowest State aid limit, i.e. RON 400,000 for up to 3 years time span.

SME-s are benefiting from it, for investment or current business credits used in production or services; likewise, other economic firms are making good use of the offset for credits devoted to R&D activities, environmental protection, regional growth, staff employment and training. Exporters may benefit from such product for the RON investment credits extended to them by commercial banks.

5. Further services provided by Eximbank:

• Commercial information

• Country risk reports – display risk assessment for about 74 countries with above average estimated risk from Asia, Europe, Middle East, Latin America, Africa, CIS

• Reports on the developments over the last 7 years for 12 core industrial sectors

• Reports on external demand, mainly on Western markets, for 17 industrial sectors also pinpointing economic forecasting.