How to Mitigate Risks When Doing Business in the United States

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How to Mitigate RisksWhen Doing Business in
theUnited States
May 20, 2009
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Corporate Information

• Export Development Canada (EDC) is Canadas
  export credit agency, offering innovative
  financing, insurance and risk management
  solutions to help Canadian exporters and
  investors expand their international business.

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Corporate Mandate

• At EDC our mandate to support and develop,
  directly or indirectly, Canadas export trade and
  Canadian capacity to engage in that trade, as
  well as to respond to international business
  opportunities guides everything we do.

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EDC Financial Solutions

• Credit Insurance
• Contract Insurance Bonding
• Financing

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Volume by Program
65
Source EDC Data 2003
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Billions
Source EDC Data 20067 Business Review
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EDC International Volume (billion)
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Source EDC 2007 annual report
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Customers Served by Market Sector Team
Legend TRN Transportation RES Resources LTM
Light Manufacturing INF Infrastructure
Environment ICT Information and Communication
Technologies EXT - Extractive
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Source EDC Data 2007
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Credit Insurance

• Accounts Receivable Insurance (ARI)
• Contract Frustration Insurance (CFI)
• Single Buyer Insurance

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Accounts Receivable Insurance

• Protect against losses when your U.S. buyer cant
  or wont pay with 90 coverage
• Enter new markets and expand existing ones
• Offer your customers more flexible payment terms
  up to 180 days
• Increase your access to working capital with your
  financial institution

www.edc.ca/insurance
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Contract Frustration Insurance (CFI)

• Single contract insurance that provides
  work-in-process and receivables protection
• Covers up to 90 of eligible losses arising from
  a wide range of commercial risks.
• CFI is targeted specifically to Canadian
  exporters of capital goods or services and their
  Canadian suppliers
• Available on a fully selective basis, provided
  the associated risks and Canadian benefits are
  acceptable
• CFI is a single contract alternative to EDCs
  Accounts Receivables Insurance policy.

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Single Buyer Insurance

• Alternatively you can consider covering your
  sales to only one customer with our Single Buyer
  Insurance
• Cover an unlimited number of payments due by the
  same customer, up to 250,000, in a six-month
  period
• Policy insures up to 90 of your losses if you
  dont get paid after your goods have been
  accepted by the buyer
• Targeted to the occasional exporter who have
  infrequent insurance needs (one or two exports a
  year)
• Simplified application process and policy to make
  it quick and simple to use
• www.edc.ca/singlebuyer.

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EXPORT Check
Helps you decide how much (if any) credit you
might want to extend to a potential U.S. or
foreign customer.

• Promptly determine your buyers credit profile
  with
• EDC Opinion Reports
• Obtain key credit and financial information on
  U.S. or foreign companies as well as an opinion
  as to whether the company is insurable
• Dun Bradstreet Information Reports
• Fast and easy access to detailed credit
  information reports on foreign companies.

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Contract Insurance Bonding (CIB)
www.edc.ca/insurance www.edc.ca/bonding
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Contract Insurance Bonding Services

• Bank Instruments guaranteeing contract
  performance
• Performance Security Guarantees (PSG)
• Performance Security Insurance wrongful call
  (PSI)
• Bank Instruments guaranteeing contract
  performance
• Foreign Exchange Facility Guarantee (FXG)
• Financial Security Guarantee (FSG) Offshore and
  Supplier
• Surety Bond Reinsurance (SBI)

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Financing Solutions for Exporters

• Export Guarantee Program
• Direct Buyer Loans

www.edc.ca/financing
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Export Guarantee Program

• A risk sharing guarantee designed to encourage
  Financial Institutions to advance loans to
  smaller exporters by providing additional
  security
• Guarantee covers the Financial Institutions
  credit facility for
• Up to 90 for guarantees 500k
• Up to 75 where EDCs exposure is between 500K
  and 10.0 million
• Up to 100 for guarantees in support of
  qualifying foreign investment-related credit
  facilities of Canadian companies.
• Existing operating lines of credit are not
  affected.
• Financial Institution is responsible for funding
  and perfecting security

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Export Guarantee Program

• Loans can be used to cover WIP financing needs
  for direct exports as well as indirect (i.e.
  component sub-supply in Canada related to a
  product that is ultimately exported).
• Approved loans can be up to 100 of the contract
  costs.
• The term of the loan is linked to the payment
  terms identified in the commercial contract.
• Variations of support
• Contract Specific One-off or Bulge facility
  to specifically support an export contract.
• Revolving Facility specifically support a
  series of purchase orders or contracts knowing
  each deal is covered under the guarantee

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Export Guarantee Program

• Variations of support (Contd)
• Operating Facility A general corporate purpose
  facility to be administered by the provider in
  support of day to day operational activities.
• Term Loan Facility
• Infrastructure investment in Canada relating to
  specific existing export contracts
• Foreign Direct Investment to support the
  acquisition of a foreign asset or company.

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Direct Buyer Loans (Buyer Credits)

• Tailored specifically to your commercial contract
• Disbursed to you by EDC on behalf of the borrower
• Meets the credit needs of your foreign buyer
• Offered at competitive interest rates fees

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• QUESTIONS?

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• Thank you
• Harold Riley District Manager, Quebec
• [phone] hriley_at_edc.ca