Our Bank Guarantee Program provides cover to Canadian and international banks financing the sale of larger Canadian export transactions to customers in emerging markets (generally defined as financed amounts greater than USD 10 million).We will consider this guarantee for consensus transactions only. It is not applicable to syndicated credits, capital market instruments, structured or limited recourse transactions, nor is it applicable to transactions in the small and mid-market segments.
Under the Bank Guarantee Program we provide 90% cover on 85% of the export contract. EDC and the bank jointly determine the loan interest rate, and the bank retains up to LIBOR (The London Interbank Offered Rate) plus 50 basis points from that rate. The bank’s costs include a guarantee fee (the OECD minimum premium rate) and an administration fee of 25 basis points. Both are payable on the financed amount.
We may provide 100% cover when:
- the bank is financing, on an uncovered basis, the down payment or local costs;
- the uncovered bank financing is repayable not fewer than two years subsequent to the repayment start date of the guaranteed facility; and
- the uncovered bank financing is at least equal to 15% of the contract value.