Reed Smith is the world`s leading law firm in the ship loan portfolio market and sells performing, struggling and underperforming debt for buyers and sellers. Many of these transactions include the sale and purchase of credits supported by the ECA. It is useful that certain provisions, which can only be found in the facilities supported by the European Court of Human Rights, have been included in the agreement, for example. B it includes a withdrawal of the Security Court, a clause to ensure that the financing rules are not incompatible with the requirements and directives of the Security Court, and an Isabella clause separating the rights and obligations of the credit agreement from those of the export contract of the assets concerned; and ensure that the borrower`s repayment obligation is clean. regardless of disputes arising from the export contract. An export credit agency (ECA) is a public institution or private enterprise acting on behalf of a government. They finance the export of goods and services from their home country to a buyer in a host country. The products offered by THE ECAs include export credit insurance, financial guarantees (of loans and bonds) and, in some cases, direct loans. ACEs take care of the economic and political risks associated with non-payment under export contracts. ECAS complements the private commercial banking and credit insurance markets and provides an additional source of liquidity for counterparties, usually with longer maturities and lower costs. The financing of the buyer`s credit can be carried out within the framework of methods of accreditation, direct payment or repayment.
Richard Hakes is a partner with Reed Smith and a member of the global asset and equipment finance group. He has extensive experience in wealth finance, with a focus on the ship and aircraft sectors. He has been involved in numerous ECA-supported operations in these markets for a large number of supported ECAs and lenders. Export credit insurance covers the risk of default of foreign claims (the percentage of coverage is between 90 and 100% depending on the agency). With the reduced payment risk for foreign buyers, suppliers can offer their buyers more extensive payment terms. Use our premium indicator tool to get an indicative premium rate for transactions in which UKEF supports a contract with a foreign public purchaser as a unit of risk. The new LMA credit agreement, as always with the LMA, was developed by consensus and through working groups and contains certain provisions that borrowers are likely to request. The amount eligible for security court support depends on a number of factors (e.g. B contractual structure, volume of value added in the exporting country, availability of reinsurance, etc.). The amount of financing is linked to the country of origin of the goods and services exported. The way in which eligible public contracts are calculated varies from country to country.
It is important to understand how the Court of the EU determines the eligible value of the country of origin. ECAs typically lend up to 85% of the content in question from the country of origin. Some ECAs are more flexible. Export financing is a method of financing linked to a specific contract between an exporter and an importer. It is usually used to finance the purchase of capital goods and/or services. Specific products are available to suppliers and buyers with maturities ranging from short (usually <1 year) to medium (5-7 years) and long-term (7 years or more). . . .