Trade Credit Insurance

Foreign Credit Market update

January 26, 2016

U.S. EXIMBANK has reopened and is again issuing credit protection for exporters and lenders.  Their single name and portfolio AR insurance programs are available, alongside their banking guarantee products.  Exports with content from outside U.S. continue to rely on non EXIM commercial markets.

Market softness continues.  Foreign AR credit pricing remains near or at historic lows.  A Fed rate increase has not resulted in any upward pressure on foreign credit insurance pricing.  Sector-wise, the bankruptcy of Third Avenue’s $788MM fund has increased scrutiny of private equity backed transactions and raised concerns regarding early redemptions.  Energy prices and pull back in Chinese equity credit markets has analysts on alert for global contagion.  Appetite remains limited for energy and other commodity related transactions.  Credit is available on a case-by-case basis.

New credit insurance loan product for borrower default.  Lenders can now purchase credit insurance policies directly on business loans to their US borrowers — increasing structural and capital flexibility.  Borrowers can be public or private.  Real estate lending is excluded.

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Dawson Beattie

Dawson Beattie leads CreditEureka as President and founder. He has helped companies navigate international credit markets through nearly 20 years of shifting market conditions. He has helped companies in retailing, mining, technology, life sciences, and agriculture.