EDC introduces new program to help Canadian exporters hedge foreign exchange contracts
OTTAWA – August 2, 2006 – Export Development Canada (EDC) today announced a new program that helps small to medium Canadian exporters manage their contracts negotiated in foreign currencies.The Foreign Exchange Facility Guarantee (FXG) works by guaranteeing up to the 15 per cent collateral that many financial institutions require on the purchase or sale of forward contracts. By returning this collateral to the exporter’s balance sheet, the program allows exporters to better manage their cash flow.
“The FXG program is another working capital solution that was created by EDC to meet the needs of our customers, to help them free up capital to do more business,” said Eric Siegel, Acting President. “Initial feedback from our customers, and the marketplace at large, suggests that the FXG fills a vital niche in helping small to medium exporters hedge their foreign exchange risk.”
The FXG can be used with any chartered financial institution in Canada, and is a 100 per cent irrevocable and unconditional guarantee. During the one year policy period, the exporter does not need to provide any further information with respect to the activities that occur under the guarantee. Forward contracts that are entered into during the validity period and respect the terms and conditions of the FXG remain eligible for coverage up to two years after the expiration date of the FXG support.
For more information about EDC and how the Foreign Exchange Facility Guarantee can help exporters to do more business abroad, visit http://www.edc.ca/english/bonding_foreign_exchange.htm.
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 7,000 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and human resource management.
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Media contact:
Phil Taylor
Public Affairs
Export Development Canada
(613) 598-2904
ptaylor@edc.ca
