Import financing with participation of Export Credit Agencies ‐ financing of import of fixed assets (machinery/equipment). Financing is provided by first-class western bank against insurance coverage provided by national export credit agency from supplier’s country, and being sent directly to supplier.
Loan is usually provided in the form of payment under letter of credit which is issued by OTP Bank in favor of a foreign company ‐ supplier of machinery/ equipment.
Loan repayment is effected out of the buyer’s funds received from operation of imported machinery/ equipment.
Basic conditions of financing:
Minimum amount: USD 1 000 000 (or equivalent in other currency).
Type of financing: term loan.
Tenor of financing: 3-5 years.
Buyer’s advance payment: min 15% of the contract value.
Grace period for principal repayment: till delivery/putting into operation of imported equipment.
Loan repayment: by equal quarterly or semiannual installments.
Currency of financing: USD, EUR.
Interest rate for USD and EUR: LIBOR / EURIBOR + margin.
Organization fee: defined individually.
Pricing depends on borrower’s financial standing, deal structure, collateral quality under the deal, financing period, current situation on monetary and financial markets.
Possible collateral (or its combination):
- pledge of fixed assets (property complexes, real estate, equipment, vehicles, agricultural machinery);
- pledge of goods in turnover;
- pledge of property rights under deposits placed in OTP Bank;
- credit repayment guarantee of other bank acceptable for OTP Bank;
- financial surety (corporate guarantee) issued by a company acceptable for OTP Bank;
- financial surety of the borrower`s owners.