Unfunded Risk Participation
Product benefits
- Unconditional product
- Risk sharing with an S&P AA-rated partner (same rating as the Belgian State), improving the RWA (risk-weighted asset) for the bank
- Substantial capacities on various sectors in many countries
- Unlocks additional capacities for new deals
Main characteristics
- First-demand guarantee in favour of the bank (undisclosed to the obligor)
- Bilateral (or tripartite) relationship between Credendo – Export Credit Agency and the bank (and potentially its broker)
- Risk- and fee-sharing principle: the maximum participation amount will be equal to the bank’s net retention; participation will be under the same conditions as those of the bank
- Trade/project-related transactions (≥ 1 year) which are not related to Belgium
Credendo – Export Credit Agency offers banks the possibility of sharing their risks on trade/project-related credits without Belgian content.
The bank can choose to present the transactions to Credendo – Export Credit Agency directly or via a broker.
Participation is based on a bilateral (or tripartite, if dealing through a broker) Master Risk Participation Agreement signed between Credendo – Export Credit Agency and the bank (and potentially the broker), which gives the bank the possibility of presenting international trade transactions for risk sharing.
The maximum participation amount will be equal to the bank’s net retention. The pricing is based on the fee-sharing principle: the bank shares its margin (excluding the cost of funding) pro rata with Credendo – Export Credit Agency. Pricing has to be in conformity with the market.
The product is a first-demand guarantee. Based on the risk-sharing principle, the bank will have to share the benefits of any security or collateral with Credendo – Export Credit Agency.
Eligible transactions include structured commodity finance, project finance, export finance, asset-based finance, contract-related guarantees and financial institutions.
Unsecured general corporate purpose transactions (except RCF for commodities traders), acquisition finance, leveraged buyouts, real-estate deals and defence-related transactions are not eligible.
Market compliance:
Credendo – Export Credit Agency participates only in trade/project-related transactions and acts in a way that conforms to the market. The following rules will always be adhered to:
- The maximum participation amount will be equal to the bank’s net retention.
- Credendo – Export Credit Agency doesn’t quote: the pricing is based on bank remuneration and has to be in conformity with the market.
Why Credendo?
Credendo – Export Credit Agency is the official Belgian export credit agency. As a public player it benefits from the guarantee of the Belgian State. Credendo – Export Credit Agency is the official Belgian export credit agency and the fourth largest European credit insurer. As a public player it benefits from the guarantee of the Belgian State. Credendo – Export Credit Agency is a single-risk insurer with a focus on emerging markets and developing countries and a reliable partner with sound experience and a strong financial basis.