Thefutureofexportfinance

22 October 2021

Tensions, trade wars and global competitiveness 

Invited as a knowledge expert, Inal Henry, Head of Structuring: Markets at RMB recently spoke at the Global Trade Review  UK 2021 on the topic of tensions, trade wars and global competitiveness, and its impact on the future of export finance. The battle for global export competitiveness is an important topic, as major economies stake their claim across international markets. Inal provided an international banking perspective on what innovative financing products and tools Export Credit Agencies (ECAs) are using to gain a competitive advantage in the market.

She specifically highlighted three financing products that ECAs are using to both support exporters and offer holistic, dynamic financing solutions alongside commercial banks, sponsors and exporters. She first outlined the ability of the OECD ECAs to provide a tranche of direct lending at the referenced transparent CIRR Rate. These tranches help lower the all in cost of financing and go so far as to supplement and cross finance other more expensive tranches. The second relevant product is the ability to structure and include Local Currency tranches and risk management solutions which also provides a holistic and well mitigated financing package. Finally, recent transactions have highlighted the usefulness of being able to support the down payment facility outside the terms of the consensus.

These products assist ECAs to be dynamic and innovative in the post pandemic environment, and ensure success for the ECAs and its Exporters.

ECA financing is an integral part of infrastructure development and finance. ECAs will continue to play a strong and leading role in the future, as they continue to provide a favourable operating environment for global export.