Interest Equalisation

The interest equalisation system is part of export promotion. Finnish Export Credit Ltd (FEC) administers the State of Finland’s interest equalisation system. Banks play a key role in the interest equalisation system.

How does the interest equalisation system work?

Under the interest equalisation system the bank arranges for its client purchasing Finnish capital goods and services a fixed CIRR-based export credit. A case-specific interest equalisation agreement with FEC provides the bank a hedge, which converts the fixed CIRR-based receivable into a floating rate receivable.

Under the interest equalisation agreement the bank will pay a fixed CIRR rate plus an optional margin to FEC and receive a floating rate (normally Euribor or SOFR) plus a spread from FEC as follows:

Repayment period in yearsCredit amount   
 under 5M€5–25 M€25–50 M€over 50M€
5 or under 50 bp40 bp35 bp30 bp
over 5–1050 bp45 bp40 bp40 bp
over 1050 bp50 bp45 bp40 bp

If the reference interest rate is a risk-free interest rate (e.g. SOFR), the margin shall be increased in accordance with the transitional practices generally accepted in the interest rate derivatives market.

The bank often covers the credit risk with export credit guarantee but the credit risk can also be covered by the bank itself or the bank can use other arrangement of it’s choice.

Main terms of interest equalisation

The OECD term export credit is arranged and funded by a financial institution. The financial institution is responsible for documentation, and shall administer the credit and its securities throughout the entire life of the credit. The credit currency is euro, United States dollar or the buyer's country's currency.

FEC charges the client a case-specific margin above the base rate, a commitment fee and a handling fee for renewing the offer.

Applying for interest equalisation

Application for export or ship financing and interest equalisation must be filed before the fixed CIRR rate is locked. The exporter or the mandated financial institution for and on behalf of the exporter / the buyer can apply for FEC financing.

FEC financing can be applied through Finnvera's Online Service when applicant is a Finnish exporter or a Finnish parent company. Preliminary application is available at the Online Service, which can be utilised for transactions where limited information is currently available. FEC financing can also be applied for by a PDF application which is sent to applications.eca(at)

FEC has signed co-operation agreements with a number of financial institutions; see the list

Share page: