Glossary
EBRD
European Bank for Reconstruction and Development. One of the institutions that provide financial aid to countries in transition in form of loans to individual or corporate borrowers. Participates in projects.
ECA
Export credit agency. A generic name for all government institutions that provide financial support to exports in form of subsidized loans or guarantees.
EIB
European Investment Bank
Endorsement
Method of transferring the title to a negotiable instrument. Done by writing one's name on the back of the instrument.
Escrow account
Accounts hold usually in offshore banks for the benefit of the debtor outside the debtor country through which a portion of the export proceeds of the debtor is channelled. Positive balances are usually kept to cover future debt service payments.
Euribor
European Interbank Offered Rate, published daily by the International Banker's association or the Federation Cambiste International at or about 11 a.m. Brussels time.
Export credit agency
See ECA.
Export credit guarantee
ECA granted guarantee covering credit risks connected with exports.
Export credit insurance
An insurance policy providing cover for export related credit risks. Usually provided by government-backed organizations, although commercially operating insurance providers exist.
Face value
The nominal value of a bill.
Factoring
A method used by businesses to obtain cash for receivables with due dates in the future. Factoring house purchases the receivables at discounts them and paying the business a certain percentage of the receivable's face value. The factoring house then collects the receivables. Most common with domestic receivables.
Financed portion
A term denoting the portion of the export contract's value that is financed. Usually 85 % as the ECAs usually require a down payment of 15 %.
Financial engineering
A process involving the creation and combination of a variety of financial instruments in order achieve a defined financial objective within certain cost, tax and legal constraints
Fixed-date bill
Bill of exchange that becomes due and payable at a stipulated date after the issue date. Also known as after-sight bill
Fixed-rate loan
A loan with a permanent non-variable interest rate fixed for the entire life of the loan.
Flat
A once-for all percentage on the principal on a certain date as opposed to per annum rates
Floating rate
An interest rate consisting of a variable market rate plus a margin
Force majeure
The title of standard clauses in contracts limiting the parties' liability for non-fulfilment of their obligations as a result of conditions beyond their control.
Foreign content
Goods and services originating from another country than the one of which ECA is providing cover for the particular export transaction.
Forfaiting
A non-recourse export financing approach. The financier purchases bank avalized notes and carries all risks with no recourse to the exporter.
Front end costs
Commission fees and other charges taken at the outset of the loan.
