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Why Trade Finance Credit Insurance?

For Banks

Trade Finance credit insurance can provide Basel lll-compliant capital risk mitigation and protection to financial institutions/other funders as insured against the risk of non-payment by the obligors for trade financing programs.

For Corporates

Trade Finance credit insurance can assist corporates to expand their funding programs with banks/other funders while providing the corporate with efficient trade credit cover for its suppliers.  

Products covered, Characteristics & Benefits

Products covered

  • Receivables finance
  • Payables finance
  • Trade loans
  • Letters of credit/standbys
  • Asset-backed lending

Characteristics

  • Underlying trade
  • Short term
  • Self-liquidating
  • Global

Benefits

A Basel lll-compliant policy can help Banks and Funders to reduce

  • Credit exposure on obligors
  • Capital allocations

Summary of the policy types, industries, obligors & countries

Trade Finance Policies

  • Single Risk/Multi Named Buyer or Portfolio of buyers (including thousands of obligors)
  • Basel-III compliant
  • Indemnity or excess of first loss cover
  • Tenor - up to one year or max. 18 months non-cancellable
  • Up to 100% indemnity for portfolio cover
  • Flexible and customised solutions to match the financial institutions/funders risk profile and Basel needs
  • Can offer integrated technology solutions
  • Trade Finance structuring, securitisation and back up servicing available
  • Global coverage

Industry Focus

  • Oil/energy
  • Telecoms
  • Manufacturing
  • Paper packaging
  • Food
  • Banks
  • Logistics
  • Transport
  • Chemical/pharmaceuticals
  • Electronics

Obligor Rating Focus

  • Obligors rated BB- (or S&P equivalent) or better for single risk/named buyer transactions
  • AIG can consider a wide range of obligors in a portfolio

Country Focus - Global

  • AIG can provide locally admitted insurance in over 200 countries globally*

*OFAC/Sanctioned Countries excluded - Limited appetite for Cambodia, Myanmar, Turkey, Russia, Brazil, Venezuela, Haiti, certain African and Middle East countries, considered on a case by case basis.

For more information please email a member of the team at trade.finance@aig.com

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