For the first time, Clal Credit Insurance, a subsidiary of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), has signed an agreement to provide credit guarantees to exporters participating in overseas projects. The agreement was signed with insurance concern Euler Hermes, the world’s largest credit insurer, owned by the Allianz Group.
The agreement will enable Clal Credit Insurance to replace bank guarantees required in contracts of exporters competing in overseas tenders and projects.
Clal Credit Insurance general manager Uri Levy said that the agreement would help Israeli exporters expand their bank credit lines and obtain an additional credit framework, without a further examining of their credit portfolio at the bank. These guarantees involve no fees for issuing the guarantees and increasing credit frameworks.
Levy added that the agreement would enable Clal Credit Insurance to offer Israeli companies that operae in Europe, and are required to give performance guarantees, guarantees issued and signed by Euler Hermes. This is the first time that an Israeli insurance company has signed an agreement with an overseas company for the provision of guarantees.
At the same time, through Clal Credit Insurance, Euler Hermes will grant performance guarantees in Israel to its European customers.
Performance guarantees are required in every public and government tender. They are designed to ensure that companies winning tenders meet their contractual obligations. Up until now, Israel exporters have used bank guarantees for overseas tenders.
Published by Globes [online] - www.globes.co.il - on September 25, 2005