Product overview for financial institutions
All forms of cover for your foreign financing at a glance
Financing of recurring export transactions
transactions with a foreign buyer or transactions under a credit line/
framework credit with several exporters with one foreign buyer.
Revolving Buyer Credit Cover
Revolving buyer credit cover enables banks to insure their receivables under a loan agreement on the financing of a German exporter's regular, short-term export transactions with a specific foreign buyer. The policy period of a Revolving Buyer Credit Cover is one year and it will be automatically extended unless notice of termination is given in due time, at the latest one month before the expiry.
Protection against payment default arising from recurring export financing – one buyer, one country
- Up to 12 month credit period, in exceptional cases up to 24 months
Shopping Line Cover
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.
Protection against default of loan receivables under a credit line from several German exporters (tranches)
- Short term: up to 24 month credit period
- Middle-/long term: 2 years and longer
Framework Credit Cover
With Framework Credit Cover banks can insure their receivables arising from individual loans granted under a general loan agreement (credit line) to finance German export transactions.
Protection against payment default arising from credit facilities granted to be drawn
- Middle-/long term: 2 years and longer
Financing of single transactions
transactions with one foreign buyer.
Hermes Cover click&cover BANK
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, Basically, it is available for transactions in countries classified in risk categories 1 – 5 and with credit periods of up to 5 years.
Protection against payment default arising from single export transactions
- Short term: up to 24 month credit period
- Middle-/long term: up to 5 years credit period
Leasing Cover
With leasing cover, a German lessor (producer/exporter or leasing company) secures its leasing claim from a cross-border leasing transaction against a foreign lessee.
Protection against bad debt losses from individual export transactions
- Short-term: Up to 24 months payment term
- Medium/long-term: From 24 months payment term
Credit Confirmation Risk Cover
With Buyer Credit Cover for documentary credit confirmation risks, a bank cover the risk arising from the confirmation of documentary credit claims that serve to finance a German export transaction. It is available in particular for confirmed letters of credit and irrevocable purchase commitments.
Protection against risks arising from the confirmation of letter of credit claims from individual export financing transactions
- Short-term: Up to 24 months payment term
- Medium/long-term: From 24 months payment term
Supplementary cover
arise in the export transaction.
Forfaiting Guarantee
The Forfaiting Guarantee makes it easier for the exporter to refinance its small-ticket transactions covered under an Export Credit Guarantee of the Federal Government. It gives the exporter access to more liquidity and reinforces its position in international competition.
Protection of receivables resulting from cross-border deliveries having a contract value of up to 10 million euros (or the euro equivalent).
· Short-term (up to two years)
· Medium/long-term (two years or longer)
Learn more about how you can expand your financial leeway for your foreign business on our product page:
Counter-Guarantee (as beneficiary)
The Counter-guarantee complements a Contract Bond Guarantee and thus cannot be used independently. It enables German exporters to ease the pressure on their credit lines. Especially small and medium-sized companies can enhance their liquidity with it.
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.
Protection of exporters against recourse claims by financing institutions.
Covered Bond Guarantee
A Covered Bond Guarantee gives banks financing export transactions more flexibility when refinancing the export credits they granted in their own covered bond business (German covered bond; "Pfandbrief").
Protection against the withdrawal of covered bonds in the event of insolvency/insolvency of the bond institution outside Europe e.g. by a creditor of the bank.
Securitization Guarantee
(VBG-E / VBG-R)
The Securitization Guarantee makes it easier for banks to refinance export finance secured on the basis of Buyer Credit Cover externally by making certain improvements to the cover in favour of the refinancer.
For the refinancing of Hermes-covered export credits of commercial banks, the German Government has introduced an additional variant for refinancing by by commercial banks through “Pfandbriefbanken” (German covered bonds banks) (VBG-R) in addition to the traditional Securitization Guarantee (VBG-E). This is intended to improve the conditions for export financing from commercial banks.
Liquidity relief through access to refinancing for loans secured by the Federal Government and improved conditions.
Securitization Guarantee for the KfW Refinancing Programme
On behalf of the Federal Ministry of Economics and Climate Protection, the Kreditanstalt für Wiederaufbau (KfW) provides the German export industry with a programme for long-term refinancing if businesses receive a Federal Government Securitization Guarantee in addition to a Buyer Credit Cover or Airbus Guarantees.
With a Federal Securitization Guarantee, banks can participate in the refinancing programme of the state-owned KfW banking group and receive long-term refinancing for financial loans and Airbus Guarantees with matching maturities.
Protection against liquidity bottlenecks through access to long-term refinancing by KfW for loans secured by the Federal Government, or improved conditions.
Specific export cover
from project financing or structured finance schemes.
Project Financing
Project finance transactions are major projects where the operating costs and the funds for interest and redemption payments on the loans taken out are generated by the project itself. They centre round a legally and economically independent special purpose company ("SPC") which acts as borrower. Hence project finance is a form of finance which focuses on the direct revenues of the project (cash flow related lending) which does not appear in the financial statements of the investor (off balance sheet financing).
To protect against bad debt losses in large-volume investment projects, die economically independent Special Purpose Companies (SPC's) can cover manufacturing risks and payment default risks, and banks can cover the uncollectibility of loan receivables.
Promotion of climate-friendly exports
Global climate change is one of the biggest challenges that lie ahead in the coming years. The Federal Government supports the further development and transfer of climate-friendly, efficient high-tech products also by means of initiatives in the field of export promotion.
Special requirements / Protection against bad debt losses through improved conditions
- Up to 22 years credit period
- Inclusion of up to 70 % foreign content
Airbus Guarantee
The Airbus Guarantee to secure foreign transactions generally involves leasing contract structures with an isolated buyer credit to be guaranteed to a special purpose entity and a downstream finance lease to an airline or an operating lease company (asset-based financing).
The Airbus Guarantee covers bad debt risks (excluding structural risk) on first demand.
Ship Financing
Ship Financing requires a customized cover concept as the basis for competitive financing solutions for German shipyards and the supply industry. On the basis of flexible solutions within the framework of Export Credit Guarantees, it is possible to provide cover for newbuildings (such as passenger ships, container ships or product tankers, RoRo ferries, etc.) as well as for the conversion of existing ships, for example.
Protection against bad debt losses, especially for long-term financing
- payment terms of up to 12 years
