EKF to help Danish exporters impacted by coronavirus (COVID-19)

03/19/2020

EKF Denmark´s Export Credit Agency launches two initiatives to assist Danish exporters under pressure from the Corona Crisis.

Danish exporters under pressure from the Corona Crisis can now turn to EKF Denmark´s Export Credit Agency for assistance. The assistance will be offered by way of two specific initiatives aimed at exporters: one, geared to companies with liquidity problems; the second, designed to ensure that the companies can secure insurance for their export orders from private trade credit insurance companies. The two initiatives will aid the survival of several hundred Danish exporters during the crisis with operating loans from banks initially totalling DKK 1.25 billion and insurance of export orders for a similar amount.

“EKF is here to help, and we stand by our corporate social responsibility. We will be using every conceivable means of supporting Danish exporters to ensure their sales of products internationally. Our mission is to protect Danish jobs and the exports that are crucial for the welfare and prosperity of the Danish nation. We will be making our contribution with maximum impact”, said Kirstine Damkjær, CEO of EKF.

Now that the whole world is affected by the same crisis, Danish exports too are under immense pressure. Danish companies that to a greater or lesser extent depend on trading their products and services abroad risk a severe setback, which in turn will impact their employees, and ultimate survival as a business.

In extension of the many interventions from Denmark's political leaders to support Danish business and industry, EKF's two initiatives primarily target businesses engaged in export and internationalisation, who otherwise risk their export orders being delayed or cancelled outright. Denmark's borders remain open for transportation of goods, so the physical infrastructure for exports still exists. But for each individual export business, it is vital to secure their liquidity and insurance coverage.

I would urge all Danish exporters in need to contact us so we can jointly find a viable way forward

EKF has the financial strength to provide extraordinary assistance in this critical situation:

“EKF is sufficiently well buffered to be able come to the aid of exporters now contending with an extraordinary need. Effective assistance will be offered by EKF in the form of liquidity guarantees and reinsurance of private trade credit insurance companies. In the current situation, these two initiatives could help a large number of exporters. I would urge all Danish exporters in need to contact us so we can jointly find a viable way forward”, came the call to action from Kirstine Damkjær.

Last year, EKF assisted more than 700 Danish businesses with their exports. Eight in ten of EKF customers are SMEs. In 2019, EKF facilitated contracts for Danish exporters totalling DKK 15 billion and secured 7,200 jobs in Denmark.

Further information for the press

For press inquiries, please contact Rune Jonassen, M: +45 23 20 11 75, E: ruj@ekf.dk

EKF's specific initiatives


1: New Liquidity Guarantee for exporters impacted by coronavirus aimed at SMEs (small and medium-sized enterprises)

The first initiative, a Liquidity Guarantee, will support the many Danish exporters affected by liquidity problems in that their earnings decrease while they still have to meet supplier and payroll costs. This product offers improved conditions during the crisis.

Under a Liquidity Guarantee, EKF covers 80 percent of any bank loss on new lines of credit extended to secure exporter liquidity. This will give the banks an added incentive to grant the liquidity that may be make-or-break for many SMEs.

The existing Working Capital Guarantee scheme was established in the wake of the 2008 financial crisis and currently supports some 400 Danish exporters. The new Liquidity Guarantee may initially raise that figure by an additional 250 SMEs and lending totalling DKK 1.25 billion.

More information about the Liquidity Guarantee and who will be eligible for it will follow soon.



2: Extension of EKF's reinsurance of private trade credit insurance companies for the benefit of both large corporates and SMEs

The second initiative, which will extend EKF's existing reinsurance scheme to OECD countries, is intended to ensure that the Coronavirus Crisis does not deter private trade credit insurance companies from underwriting Danish exporters' export orders, as was the case during the financial crisis.

EKF acts as the 'insurers' insurer'

Since the financial crisis, EKF, in association with the trade credit insurance providers Atradius, Euler Hermes, Coface and Tryg, has offered a reinsurance product under which EKF reinsures the private trade credit insurance providers so that they can continue to insure Danish companies' export orders. In this way, EKF acts as the 'insurers' insurer' by covering up to 90 percent of the risk to trade credit insurers from new export orders.

In recent years, the trade credit insurance companies have had less need for this product, owing to the economic upturn. For that reason, export orders in the OECD countries have not been covered by the product. But now that liquidity problems are also affecting buyers of Danish products in OECD countries, the private trade credit companies may reduce the credit limits they can offer in Denmark and turn down Danish companies in need of insurance.

EKF will therefore be requesting European Commission approval to extend the scheme to EU and OECD countries as well. The aim is to ensure coverage of Danish exporters' risk, so they receive their money if their customer abroad is unable to pay.

The reinsurance scheme currently assists around 50 Danish companies with transactions totalling DKK 500 million but can be extended to cover many more companies. The reinsurance scheme covers all exporters, including SMEs and the export orders of large corporates.

The new schemes are pending European Commission approval

The new schemes have not yet come into effect, as they are pending European Commission approval in accordance with the rules on state aid. As a company, you must apply to your bank for a Liquidity Guarantee, and to your trade credit insurance provider for insurance of export orders. EKF also welcomes inquiries from companies seeking further information about the two schemes.

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