An insurance product designed to cover a Russian or international bank against the risk of a default on a loan provided to an overseas borrower (the buyer or buyer’s bank) to pay for goods, work or services exported from Russia under contract.
What is insured?
The loan provided by a bank (international or Russian) to an overseas borrower (the buyer or buyer’s bank) to pay for goods, work or services exported from Russia under contract, as well as interest accrued
Who is the insured?
The policy holder is the Russian or foreign bank financing the foreign borrower
What is the term of an insurance contract?
The insurance period corresponds to the validity of the credit agreement
Degree of insurance coverage
Insurance covers both commercial and political risks related to non-fulfilment of the overseas borrower’s obligations
- Increases the volume of banking operations
- Minimizes the cost of financing for the borrower, while lengthening financing schedules
- Insurance contracts offered by EXIAR qualify as first-class security, thereby minimising reserve requirements
- EXIAR insurance may cover a bank loan (in addition to the principal) extended to the borrower for financing the agency's insurance premium
- Strengthens the competitiveness of Russian companies in international markets
- Provides the opportunity to finance export projects being implemented in “difficult” regions
- A substantial reduction on the capital load of Russian banks: with an EXIAR insurance contract, lending requirements and requirements concerning payable (accrued) interest denominated and/or allocated in roubles or foreign currency fall under the 3rd (0.5) asset group
The review procedure for export projects consists of 7 stages and takes between 12 and 29 days.
Documentation required to review a project:
- A brief description of the export project or an insurance application (using the agency’s form)
- Information on the Russian bank, including financial records (balance, profit and loss account), ownership structure, information on the group of companies that the counterparty is a member of, and the group’s consolidated management accounts (if applicable)
- The text of the letter of credit (or draft version)