Export Credit Guarantee

Business requirement

The client wishes to finance the acquisition of machinery for expanding production facilities in his home country.

Solution – export finance

The client’s company imports the machinery from a German manufacturer for his production facility. The production line is eligible for 95{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} cover from the German export credit agency (ECA).  The ECA provides cover in the country of origin in order to facilitate exports from the country.

RKG makes an introduction to a bank.  The bank can lend to the producer on the basis of a mix of cover from the ECA and a corporate guarantee from Client’s parent company. The bank will take 5{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} residual risk on the parent company.

Structuring this as an export finance transaction allows a longer tenor and more attractive terms for the client