Financing

hu4 digital securities
for a safe investment and hedging via export credits

„human 4“

Export credit guarantees („Hermes Cover“) protect German exporters and the BANKS / INVESTORS financing them against political and economic risks.
With guarantees for untied buyer credits (UFK), the German government supports eligible raw materials projects abroad.

UFK guarantees from the federal government therefore also protect lenders / investors in raw materials projects abroad against economic and political risks.

To finance the export transaction, the foreign customer can utilise either a supplier credit or a buyer credit. In this way, the foreign customer is also protected, e.g. against: supplier default, plant breakdown, environmental and political influences, etc.

State guarantees / souvereign gurantee are required by the foreign buyer as a prerequisite for Hermes Cover to be issued. The state guarantee only becomes effective on condition that Hermes Cover (BRD) is provided. This results in the following safeguards for the entire project:

State export credit guarantees (Hermes Cover) are a central foreign trade promotion instrument of the German government. They protect exporters against economically or politically induced bad debt losses and in many cases make the necessary sales financing of a transaction possible in the first place. The cover offered covers the entire value chain of an export transaction – from production and delivery to payment of the final instalment.

By assuming an export credit guarantee, the risk of payment default is largely transferred to the Federal Republic of Germany. The policyholders pay a risk-adequate premium (fee) for this. In the event of a loss, the Federal Government indemnifies the policyholder in the amount of the covered claim (less deductible).

Export credit guarantees play a central role in risk management and sales financing. In many cases, they make it possible for banks to finance a transaction in the first place. Backed by the German government and its first-class credit rating (Germany’s AAA rating), the credit risk is reduced. This has a positive effect on financing conditions.

The Federal Government’s export credit guarantees are generally available to all export companies and export-financing banks based in Germany – regardless of the size of the company or the size of the order. The decisive factors for the granting of an export credit guarantee are eligibility for support and a sufficient prospect of a loss-free transaction (justifiability in terms of risk).

Export credit guarantees are only used in cases where the private sector does not provide an appropriate or sufficient level of cover. Consequently, the Federal Government’s business focuses on export credit guarantees for developing and newly industrialising countries. Hermes Cover helps to open up markets that are difficult to access and to maintain business relationships in difficult times.

UFK guarantees: For untied financial loans (loan agreement with a state)

Hermes Cover: Euler Hermes Aktiengesellschaft | Export Credit Guarantees of the Federal Republic of Germany;

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