Finnish Export Credit Ltd (FEC) administers the Finnish interest equalisation system.
The Government of Finland is responsible for the interest support to be paid to financial institutions on the basis of the interest equalisation agreements. National interest is a prerequisite for interest equalisation.
FEC and the financial institution arranging the export credit will enter into a co-operation agreement prior to the first transaction. The financial institution shall have an investment grade rating for its funding and sufficient knowledge and experience in arranging and financing of officially supported export credits. FEC has signed co-operation agreements with a number of financial institutions.
Transactions benefitting from interest equalisation shall meet the criteria of the OECD Arrangement.
The credit is generally covered by an export credit guarantee, but the risk may also be carried by the financial institution.
For further information, please contact Finnvera’s personnel in Export Financing.
Under the interest equalisation system a financial institution arranges for its client a fixed CIRR-based export credit. The CIRR rate will be fixed on the day of the transaction. The responsibility of funding the transaction lies on the financial institution arranging the credit. An interest equalisation agreement with FEC provides the financial institution a hedge, which converts the fixed CIRR-based receivable into a floating rate receivable.
Under the interest equalisation agreement the financial institution will pay a fixed CIRR rate to FEC and receive a floating rate (normally Euribor or Libor) plus a spread from FEC. According to the decision of the Ministry of Employment and the Economy the interest equalisation maximum spreads to be added to the reference rate are as follows:
Repayment period in years
5 or under
over 5 - 10
The 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 mainly euro, United States dollar or the buyer's country's currency.
FEC charges a commitment fee according to its policies and a handling fee.
For the period from the 15th of May 2019 through to the 14th of June 2019
FEC will apply these rates to financing of export credits and to new interest equalisation indications, bids and agreements.
FEC will add a premium of 0.2 per cent to the CIRRs when fixing at bid. Interest rates may not be fixed for longer than 120 days.In project finance for repayment terms of up to and including 12 years, the normal CIRR shall apply. For repayment terms in excess of 12 years and up to 14 years, a surcharge of 20 basis point on the CIRR shall apply for all currencies. CIRR´s for Renewable Energies and Water Projects with repayment period over 11 years are available on OECD’s web site.
- CATEGORY I 2 - 5 years (8.5 years)
- CATEGORY II 2 - 10 years
Interest equalisation can be applied for by the exporter or the mandated financial institution for and on behalf of the exporter or the buyer. The application for interest equalisation must be submitted before the supply contract is signed.
Interest equalisation is applied for by an application which is sent to firstname.lastname@example.org.
FEC has signed a co-operation agreement with following financial institutions:
ABN AMRO Bank N.V.
AKA Ausfuhrkredit-Gesellschaft m.b.H
Banco Bilbao Vizcaya Argentaria S.A.
Banco Santander S.A.
Barclays Bank Plc
Citibank International Limited
Credit Agricole Corporate and Investment Bank Helsinki Branch
Credit Suisse AG
Danske Bank A/S
Deutsche Bank AG London Branch
DNB Bank ASA
Fortis (BNP Paribas) SA/NV
HSBC Bank Plc
HSBC Bank USA, N.A.
ING Bank N.V
JPMorgan Chase Bank, N.A.
Jyske Bank A/S
KfW IPEX-Bank GmbH
Mizuho Bank Ltd.
Nordea Bank Finland Plc
Raiffeisen Bank International AG
Skandinaviska Enskilda Banken AB (publ)
Standard Chartered Bank
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation Europe Ltd
Svenska Handelsbanken AB (publ.)
The Bank of Tokyo-Mitsubishi UFJ, Ltd
The Hongkong and Shanghai Banking Corporation Limited
The Royal Bank of Scotland Plc
The Standard Bank of South Africa Limited
UniCredit Bank AG
UniCredit Bank Austria AG