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EDC Ready To Deliver New Domestic Business On Day 1
(OTTAWA) – March 13, 2009 – Export Development Canada (EDC) announced today that it has already begun work on transactions under its new enhanced domestic mandate, which were enacted into law with the passing of Bill C-10 on Thursday, March 12, 2009.
“EDC has been preparing since the budget was announced and we are delivering upon new business on Day 1, with an existing pipeline of transactions that came into us while the legislation was proceeding through approval,” said Eric Siegel, President and CEO of EDC. “In addition, we can now move to establish the terms by which EDC will add capacity to Canada’s private insurance providers. EDC is stepping up and can now fully engage Canadian companies to continue increasing access to credit.”
With the passing of Bill C-10, the Government of Canada has provided for a two-year temporary expansion of EDC’s mandate to help increase access to credit for Canadian companies.
This expansion is intended to allow EDC to support domestic trade by participating in domestic financing and insurance with private sector financial institutions, private insurance providers and the surety industry.
EDC’s capacity to undertake this new temporary mandate has been supported by the Government’s increase of EDC’s contingent liability, share capital and borrowing limits. The Government has also increased the limit on the amount of activity under the Canada Account.
With this additional financial flexibility, EDC will bring enhanced capacity to domestic transactions that are creditworthy and supported by a viable business model, but for which companies are having a difficult time finding credit.
EDC anticipates adding capacity to the domestic market in 3 broad areas:
Providing re-insurance to bring additional capacity to domestic credit insurers and help them to continue to serve their customers;
Providing re-insurance and guarantees as additional capacity to the surety industry; and
Providing loans and loan guarantees in the domestic market to assist companies facing challenges raising sufficient credit.
EDC’s new powers in domestic financing will be facilitated through its participation in the BCAP initiative, a partnership among EDC, BDC and Canada’s private sector financial institutions. The proposed transactions will be presented by Canada’s private sector financial institutions and evaluated on a case-by-case basis.
EDC will bring capacity to the private market in a manner that is complementary to the services provided by both the private sector and Business Development Canada.
“We know we can contribute so much more if we partner effectively with others, private and public,” continued Mr. Siegel. “The partnership approach will ensure that we bring capacity to the marketplace in the quickest and most efficient manner possible, and will help maintain relationships between the private sector banks and private insurance providers and their customers.”
EDC’s participation in any transaction will be predicated upon commercial principles for creditworthy transactions that have been constrained by the current economic environment.
“As we move through 2009, we will continue to identify export-related opportunities to deploy our capital and provide companies with the credit and insurance coverage they need to survive, to compete and to succeed”, continued Mr. Siegel.
In 2008, EDC undertook more business with more customers than ever before. EDC facilitated $85.8 billion in exports and investments, the most in its history, and a 23% increase over 2007. More than 8,300 customers generated that business volume, the most customers in its history, and an increase of 11 per cent over 2007.
“In 2008 alone, EDC added nearly $16 billion in new commercial support for Canadian companies at a time when Canadian companies needed it most, so we know what “doing more” really means,” continued Mr. Siegel. “EDC is very aware of the urgency of the current commercial demand, and we stand ready to continue to deliver upon our commitment to do more for Canadian companies through 2009 and the credit crunch.”
In the first two and a half months of 2009, EDC has undertaken 13.2 billion in new business, an average of $320 million dollars of new business every single business day. In that same time period, EDC has already taken on 543 new customers, over and above its existing customer base. EDC has also already facilitated over 500 transactions in partnership with banks and surety companies in the first ten weeks of 2009.
EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by more than 8,300 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, is a recognized leader in financial reporting and economic analysis, and has been recognized as one of Canada’s Top 100 Employers for eight consecutive years.
Phil Taylor Export Development Canada Tel: (613) 598-2904 Blackberry: email@example.com