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How to Mitigate RisksWhen Doing Business in the

United StatesMay 20, 2009

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Export Development Canada (EDC) is Canada’s

export credit agency, offering innovative financing,

insurance and risk management solutions to help

Canadian exporters and investors expand their

international business.

Corporate Information

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At EDC our mandate – to support and develop,

directly or indirectly, Canada’s export trade and

Canadian capacity to engage in that trade, as well as

to respond to international business opportunities –

guides everything we do.

Corporate Mandate

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EDC Financial Solutions

1. Credit Insurance

2. Contract Insurance & Bonding

3. Financing

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Source: EDC Data 2003

$7.0$12.6

$7.1

$51.0

$0

$10

$20

$30

$40

$50

CIB FIN PRI ARI

Source: EDC Data 20067 – Business Review

13%

15%

7%

65%

Volume by Program

$ = Billions

66Source: EDC 2007 annual report

EDC International Volume (billion)

Europe8.0910%

Asia/Pacific8.8911%

Africa/Mid East5.637%

South Central America

5.097%North America &

Carribean49.82765%

77Source: EDC Data 2007

Customers Served by Market Sector Team

727966

2209

1136981

436

0

500

1000

1500

2000

2500

TRN RES LTM INF ICT EXT

Legend

TRN – TransportationRES – ResourcesLTM – Light ManufacturingINF – Infrastructure & EnvironmentICT – Information and Communication TechnologiesEXT - Extractive

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Credit Insurance

1. Accounts Receivable Insurance (ARI)

2. Contract Frustration Insurance (CFI)

3. Single Buyer Insurance

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• Protect against losses when your U.S. buyer can’t or won’t pay with 90% coverage

• Enter new markets and expand existing ones

• Offer your customers more flexible payment terms – up to 180 days

• Increase your access to working capital with your financial institution

www.edc.ca/insurance

Accounts Receivable Insurance

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Contract Frustration Insurance (CFI)

• Single contract insurance that provides work-in-process and receivables protection

• Covers up to 90% of eligible losses arising from a wide range of commercial risks.

• CFI is targeted specifically to Canadian exporters of capital goods or services and their Canadian suppliers

• Available on a fully selective basis, provided the associated risks and Canadian benefits are acceptable

CFI is a single contract alternative to EDC’s Accounts Receivables Insurance policy.

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Single Buyer Insurance

• Alternatively you can consider covering your sales to only one customer with our Single Buyer Insurance

• Cover an unlimited number of payments due by the same customer, up to $250,000, in a six-month period

• Policy insures up to 90% of your losses if you don’t get paid after your goods have been accepted by the buyer

• Targeted to the occasional exporter who have infrequent insurance needs (one or two exports a year)

• Simplified application process and policy to make it quick and simple to use

www.edc.ca/singlebuyer.

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Promptly determine your buyer’s credit profile with: 1) EDC Opinion Reports

● Obtain key credit and financial information on U.S. or foreign companies as well as an opinion as to whether the company is insurable

2) Dun & Bradstreet Information Reports● Fast and easy access to detailed credit

information reports on foreign companies.

EXPORT Check

Helps you decide how much (if any) credit you might want to extend to a potential U.S. or foreign customer.

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Contract Insurance & Bonding (CIB)

www.edc.ca/insurance

www.edc.ca/bonding

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Contract Insurance & Bonding Services

●Bank Instruments guaranteeing contract performance

Performance Security Guarantees (PSG)

Performance Security Insurance – wrongful call (PSI)

●Bank Instruments guaranteeing contract performance ●Foreign Exchange Facility Guarantee (FXG) ●Financial Security Guarantee (FSG) – Offshore and

Supplier ●Surety Bond Reinsurance (SBI)

1515www.edc.ca/financing

Financing Solutions for Exporters

●Export Guarantee Program

●Direct Buyer Loans

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• A risk sharing guarantee designed to encourage Financial Institutions to advance loans to smaller exporters by providing additional security

• Guarantee covers the Financial Institution’s credit facility for :

Up to 90% for guarantees ≤ 500k Up to 75% where EDC’s exposure is between 500K and 10.0

million Up to 100% for guarantees in support of qualifying foreign

investment-related credit facilities of Canadian companies.

• Existing operating lines of credit are not affected.• Financial Institution is responsible for funding and

perfecting security

Export Guarantee Program

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● Loans can be used to cover WIP financing needs for direct exports as well as indirect (i.e. component sub-supply in Canada related to a product that is ultimately exported).

● Approved loans can be up to 100% of the contract costs.● The term of the loan is linked to the payment terms

identified in the commercial contract.

Variations of support:1. Contract Specific – One-off or “Bulge” facility to

specifically support an export contract. 2. Revolving Facility – specifically support a series of

purchase orders or contracts knowing each deal is covered under the guarantee

Export Guarantee Program

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Variations of support: (Cont’d)

3. Operating Facility – A general corporate purpose facility to be administered by the provider in support of day to day operational activities.

4. Term Loan Facility – Infrastructure investment in Canada relating to

specific existing export contracts;

Foreign Direct Investment to support the acquisition of a foreign asset or company.

Export Guarantee Program

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●Tailored specifically to your commercial contract

●Disbursed to you by EDC on behalf of the borrower

●Meets the credit needs of your foreign buyer

●Offered at competitive interest rates & fees

Direct Buyer Loans (Buyer Credits)

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QUESTIONS?

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Thank you

Harold Riley – District Manager, Quebec

(514) 215-7210 – hriley@edc.ca