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Foreign Exchange Facility Guarantee:
With the FXG, you will benefit from a 100 per cent irrevocable and unconditional guarantee, covering up to 30 per cent of the client’s forward contract facility, and limited to a maximum of 30 per cent per forward contract. The FXG facility is in place for one year and covers forward contracts of up to three years in length.
Benefits to your Bank:
- 100 per cent unconditional and irrevocable guarantee to your bank, on a second demand basis;
- The exporter's collateral held by the bank could be replaced with EDC's AAA rated credit, thus giving you the ability to free up the exporter's working capital;
- Since the FXG is operated on a facility basis, individual FX transactions of the client do not need to be communicated to EDC;
- EDC's risk is 0 per cent risk weighted by most banks; your bank may not have to provision for reserves in relation to these transactions;
- Like the PSG, this product gives both of us the ability to help more customers, by having access to more capital; and
- As the beneficiary of EDC's guarantee, your bank is in control of all communication and correspondence with EDC, including submission of the FXG Payment Request (see Forms and Tools).
Benefits to the Exporter:
- Access to additional working capital in order to assist in the completion of ongoing projects and in the ability to pursue more business in more markets – which also leads to more business for your bank.
- In combination with the forward contract, the FXG will help exporters better manage their cash flow and protect their balance sheet because they can accurately budget costs.
- In combination with the forward contract, the FXG will help exporters pay suppliers upfront without fear of losing money because of currency fluctuations.
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