EDC has adjusted its focus and solutions to reflect the challenges facing Canadian exporters during the COVID-19 pandemic. To learn more, click here

Foreign Exchange Facility Guarantee

Risk Transfer

     



A guarantee solution for your client’s FX hedging needs

Your client wants to hedge their foreign exchange risk, but doesn’t have the cash collateral you require to support the margin call or settlement risk generated from FX contracts. Our Foreign Exchange Facility Guarantee (FXG) provides you with an up to 100% irrevocable and unconditional guarantee of the collateral needed to cover the settlement risk. This allows you to meet your client’s FX margin needs without impacting their operating line or cash flow.

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FXG fast facts

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Coverage

An FXG covers all foreign exchange contracts entered into during the validity period, as well as those signed prior to the validity period, but that haven’t yet reached their settlement date. It has a one-year term, which is renewed annually, and covers foreign exchange contracts with terms of up to 12, 24 or 36 months.

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Eligibility 

To be eligible for support, the client must qualify under Export Development Canada’s (EDC) mandate and regulations. Foreign Exchange Facility Guarantees are for clients managing transaction-based foreign exchange exposure—not for speculation purposes.

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Pricing 

FXG pricing is based on the client’s credit rating, the amount of guarantee required, and the maximum duration of FX contracts allowed under the facility with their FX provider.

Coverage

An FXG covers all foreign exchange contracts entered into during the validity period, as well as those signed prior to the validity period, but that haven’t yet reached their settlement date. It has a one-year term, which is renewed annually, and covers foreign exchange contracts with terms of up to 12, 24 or 36 months.

Eligibility 

To be eligible for support, the client must qualify under Export Development Canada’s (EDC) mandate and regulations. Foreign Exchange Facility Guarantees are for clients managing transaction-based foreign exchange exposure—not for speculation purposes.

Pricing 

FXG pricing is based on the client’s credit rating, the amount of guarantee required, and the maximum duration of FX contracts allowed under the facility with their FX provider.


 


COVID-19

EDC has adjusted its focus and solutions to reflect the challenges facing Canadian exporters during the COVID-19 pandemic. To learn more, click here.

 


 

What does your client know about FX hedging?

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FREE guide—Strengthening your client’s FX strategy

Our guide offers a quick primer on providing your customers with the basics on managing their FX risk, including:

  • Common FX hedging tools
  • How an FXG works
  • FXG benefits for your client
  • FXG benefits for you

Download your copy of Strengthening your client’s FX strategy now.

Our guide offers a quick primer on providing your customers with the basics on managing their FX risk, including:

• Common FX hedging tools
• How an FXG works
• FXG benefits for your client
• FXG benefits for you

Tell us about yourself:

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Frequently asked questions

Get answers to the questions most frequently asked by FX providers


 

FXG case studies

 

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EDC’s FXG: One solution fits companies of all sizes

Three case studies show how companies of all sizes manage their currency risks with EDC’s FXG.

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Pre-shipment and foreign exchange solutions for a heavy-duty customer

Montreal-based cleantech company, Effenco, knew they needed to protect their balance sheet, so they turned to their FI for help in managing their FX exposure.


 


 

 

 

Have questions on our solutions for financial institutions?

Please contact us weekdays between 9 a.m. and 5 p.m. ET.

1-800-229-0575

Or send us an email and we’ll get back to you as soon as possible: bankchannel@edc.ca.