Buyer Credit Facility: additional features

Find out more about Local Currency Financing and our Export Refinancing Facility.

Local Currency Financing

UKEF can guarantee a buyer credit loan to an overseas borrower in local currency, financing the purchase of capital goods, services and/ or intangibles from a UK exporter. Loans can be made in over 60 currencies . For the overseas borrower (and buyer) it reduces foreign currency risk and avoids a variable debt service cost.

A buyer credit in local currency follows the same format as a conventional buyer credit in a standard currency such as sterling, euros or US dollars except that it is funded from a bank in the buyer’s country.

Local Currency Financing is particularly suited to projects that do not usually generate foreign currency revenue, such as water/gas/electricity utilities, local transport and local municipalities.

Export Refinancing Facility

The Export Refinancing Facility (ERF) is an add on to UK Export Finance’s standard Buyer Credit, in that it provides:

  • an undertaking to the bank that UK Export Finance will purchase the export loan by a given time; and
  • an undertaking to the borrower that UK Export Finance will provide a repayment guarantee for bonds issued (or other replacement refinancing) to refinance the loan

The ERF is available to banks funding non-sterling Buyer Credit Loans, typically with values above £50m that are intended to be refinanced through the debt capital markets (DCM) or other commercial loans. Such re-financings are priced competitively as a result of UK Export Finance’s Guarantee of Payments Scheduled Principal, and interest due under the bonds.

Should such commercial refinancing be unavailable, UK Export Finance provides certainty to the borrower and to the banks that it will fund the loan until such time as markets reopen.

To find out more about a UKEF Buyer Credit Facility.

To discuss eligibility for our support, contact our customer services team. Email or call +44 (0)20 7271 8010.

Published 9 March 2020