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Export Credit Insurance in support of

Croatian Trade

Open days Workshop “Public Financial Institutions in Europe”, Brussels, 11Oct 2011

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Established in 1992 as a specialized financial institution with a public mandate

100% owned by the Republic of CroatiaCredit rating:

Baa3 (Moody’s) BBB- (S&P)

HBOR’s triple role: 1.) Development bank

2.) Export finance bank

3.) Export Credit Agency

About

HBOR is the Croatian Bank for Reconstruction and Development

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The business of exports

In today’s international trade, a precondition for the realization of an export transaction is very often the possibility of sale with deferred payment, i.e. on credit

This alters the business relation with the foreign buyer to a credit relation, creating additional costs and risks

The usual insurance instruments against non-payment, such as letters of credit and guarantees, are often impossible to obtain from buyers and sometimes offer insufficient security. Therefore export insurance against political and commercial risks has been developed

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The primary sector in which HBOR operates is the insurance of non-marketable risks

However, an „escape clause“ allows state intervention where the marketable risks become temporarily non-marketable owing to the unavailability of private insurance or reinsurance capacity

In this way, HBOR can complement the Croatian insurance market in line with EU regulations

HBOR provides comprehensive cover

Coverage can be granted for goods/services of Croatian origin (min.40% content of Croatian goods/services) or less in case of national interest

In what Environment do we act?

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What We Offer

As a public export credit agency, we offer export credit insurance programs on the state's account

We can accompany the domestic exporter during all stages of the export cycle:

Pre-shipment

Guarantees

Pre-export financing

Payment

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OUR PORTFOLIO

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Pre-payment insurance

Who benefits?Exporters facing lack of working capital for pre-export financing, in case when no customary collateral can be offered to creditors or in case when the collateral is not sufficient to meet the loan terms and conditions.

Who we protectWe provide support for exporters whose goods are manufactured according to a specific order and cannot be sold to any other buyer.

Pre-export financing insurance Pre-shipment insurance

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Guarantee insurance

What is the goal?Promote exporters, who are confronted with the need for first-class bank guarantees issued in favor of their buyers as a condition for entering into export contracts.

Who is insured?

The Program enables banks in the Republic of Croatia to insure the risk of payment under a guarantee issued for the purpose of winning or performing an export contract, owing to an unfair and/or fair calling up to 80% of loss.

Simultaneously, it safeguards exporters against political risks in foreign markets and the risk of unfair calling under a guarantee.

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for capital goods & servicesfor consumer goods

Post-shipment insurance

Buyer non-payment insurance

Short-term creditInsurance & Reinsurance

Medium-Long-term creditInsurance

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Overview

•Easier access to new markets

•Exporter can focus on growth & increase in competitiveness

•Easier access to financial resources and guarantees

•Better chances of winning a tender

•Commercial and political risks are transferred to HBOR

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Current exposure

by industries

Industries

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Countries

Exposure to 47 countries and 650 debtors

on 31 December 2010

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Indemnities

Between 1999 and 2011 87 indemnities have been

paid out

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How we are adding value

3,3% of overall Croatian export volume in 2010 insured

As a non-profit institution, we are able to complement the offerings of the private insurance market (non-marketable risks and “Escape clause”)

We insure the risk for countries that the market is not willing to hold

We support small and medium enterprises

Insurance policy is used as a protection and a marketing tool

With taking parts of their risk on us and providing them with easier access to financial resources, we support our exporters and consequently the growth of our economy as a whole

HBOR as a public export credit

agency

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Contacts

www.hbor.hr

Strossmayerov trg 910000 Zagreb

Croatia

Tel: +385 1 4591 539Fax: +385 1 4591 547

THANK YOU!