Foreign Exchange Facility Guarantee

Overview of the Foreign Exchange Facility Guarantee program:

The Foreign Exchange Facility Guarantee encourages your foreign exchange provider to forego the usual collateral requirement by providing them with a guarantee that covers their losses in the event that you fail to honour your obligations. This saves exporters from having to put up collateral while locking in your exchange rate, ensuring that you will know exactly the amount you'll be paid in Canadian dollars.

Benefits of the Foreign Exchange Facility Guarantee program:

• Take the guesswork out of FX budget forecasts
• By locking in a rate in advance, youll feel confident pricing your product or service, so you can increase the accuracy of your cash flow forecasts.
• Increase your borrowing capacity
• With EDCs FXG, you can secure FX contracts without providing collateral, making financial institutions more confident in lending you money against those assets.
• Improve cash flow management
• Margin calls (the amount required as collateral for your FX hedge) can be unpredictable. With EDCs FXG, you dont need to meet those calls until the prearranged threshold of the guarantee is reached.
• Access more sophisticated FX tools
• By allowing EDC to cover the working capital needed for advanced FX hedging tools, you can book longer FX contracts (up to three years) and use varying risk products and parameters.
• Up to 100% coverage of your financial institutions collateral or margin requirement for:
• Foreign exchange derivative contracts, with contract durations of up to three years
• Foreign exchange derivative contracts outstanding and entered into during the validity period of the guarantee

Eligibility criteria of the Foreign Exchange Facility Guarantee program:

• Eligibility is determined by EDC based on:
• The managerial, technical and financial capabilities of your company
• Review of your foreign exchange hedging strategy
• The terms of your financial institutions foreign exchange facility agreement