OTTAWA, May 14 /CNW Telbec/ - Export Development Canada (EDC) and
Canada's private credit insurance providers today announced their intention to
collaborate to facilitate up to CAD 1 billion in new domestic credit to help
The collaboration will be based upon EDC providing re-insurance for
domestic receivables to Canada's private credit insurers, who will then access
this capacity to do more for their customers or take on new business.
AIG Commercial Insurance Canada, Atradius, Coface, Euler Hermes Canada,
Executive Risk Insurance Services and The Guarantee Company of North America
are the companies that will access the new capacity.
"By collaborating with Canada's private credit insurance providers, EDC's
capacity can be directly and immediately brought to Canadian companies where
they already go for their domestic credit insurance needs," said Pierre
Gignac, Senior Vice-President, Insurance, EDC.
"Insurance is a financing-enabling instrument that will play an important
part in EDC's plan to increase access to credit in the domestic market," he
While the use of this new capacity will be determined solely by market
demand, EDC's CAD1 billion in re-insurance capacity could facilitate Canada's
private credit insurance providers to support up to CAD4 billion in
transactions for Canadian companies.
"EDC's collaboration with the insurance industry to bring additional
credit capacity to the market place will provide greater security which
Canadian companies can leverage to obtain additional financing from banks,"
said Chris Short, Senior Vice-President and Country Manager, Coface.
"The more insurance that this collaboration can provide, the more that
financial institutions can lend against those receivables, and that means
greater access to credit for Canadian companies," said Paul Flanagan, C.E.O.
of Euler Hermes Canada.
EDC does not intend to provide domestic credit insurance directly.
Canadian companies and brokers must access the additional capacity through
their insurance providers.
The agreement was undertaken after changes to EDC's legislation as a
result of the Government's Budget 2009, in which EDC received a temporary
two-year broadening of its mandate to undertake domestic financing and
insurance. EDC's domestic powers became law on March 12, 2009.
This additional capacity will generally match the amount granted by the
private insurer and is intended to facilitate transactions that are
creditworthy and supported by a viable business model, but for which Canadian
companies are having a difficult time finding credit.
EDC is Canada's export credit agency, offering innovative commercial
solutions to help Canadian exporters and investors expand their international
business. EDC's knowledge and partnerships are used by more than 8,300
Canadian companies and their global customers in up to 200 markets worldwide
each year. EDC is financially self-sustaining, a recognized leader in
financial reporting and economic analysis, and has been recognized as one of
Canada's Top 100 Employers for eight consecutive years.
For further information:
For further information: Phil Taylor, Export Development Canada, (613)
598-2904, Blackberry: firstname.lastname@example.org