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Bank Austria offers tailored and competitive export finance packages which include ancillary loan elements (advance payment financing with or without private insurance cover and local cost financing) in addition to financing products based on traditional insurance cover as offered by the Austria export credit agency, Oesterreichische Kontrollbank AG (OeKB) and/or other export credit agencies of foreign countries which are supported by foreign governments (such as Euler-Hermes, Bpifrance, SACE, EGAP, etc.).

In addition to the "hubs" in Vienna, Munich and Milan, Austrian exporters also benefit from the potential of an international banking group, where national borders are not considered barriers but natural parts of everyday business routine. Thanks to the global position of Structured Trade and Export Finance and the interaction between the local UniCredit experts, exporters benefit from

  • the specific national expertise on the country of the potential customer
  • financing solutions tailored to personal needs

Depending on the internal limits and risk assessment, Bank Austria makes a decision on a case-by-case basis whether the risks can be included in the individual portfolio. Particularly complex risk situations in connection with structuring the financing of a transaction often require creative solutions, and this also necessitates increased cooperation with multinational institutions (such as the EBRD, IFC, MIGA and the World Bank).

OeKB

The Austrian export promotion and financing system plays an important role in the area of investment goods and provides cover for political and commercial risks for medium- and long-term financing transactions. Therefore a close cooperation with OeKB and other export credit agencies (ECA) is essential for Bank Austria and the exporters.

Requirements

Preconditions for the issuance of guarantees by OeKB, acting on behalf and for the account of the Ministry of Finance:

  • A minimum level of added value from Austria (foreign content rule).
  • Compliance with international regulations (especially the OECD Consensus).
Foreign content rule

The provision of guarantees for Austrian exports and the associated financings requires a minimum level of added value from Austria. The globalisation of the economy often makes it necessary to insure foreign content together with the domestic content.
For medium- and long-term financings (terms longer than one year), the limits for foreign supplies including local costs are currently as follows:

  • Up to EUR 3 million / value 50 %.
  • Up to EUR 7.5 million / value 40 %.
  • From EUR 7.5 to 10 million / value EUR 3 million.
  • Over EUR 10 million / value 30 %.

The above mentioned foreign content can be increased by 10 % for immaterial services (such as planning and engineering).

The determination/analysis of value added is based on the origin of goods. The country of origin is the country where the last substantial transformation and processing justifiable on economic grounds took place. An assessment of value on the basis of sales prices can be recommended whenever goods qualify for an Austrian certificate of origin because in this case the goods can be considered to originate in Austria to the extent of 100 %. Conversely, goods with a foreign certificate of origin are deemed to be of 100% foreign origin independently of any Austrian content and Austrian trade margin/profit that may be included. In such a case the value should assessed on the basis of purchase prices because this will make it possible to classify overhead expenses, risk provisioning and trade margins/profits as value added in Austria. Furthermore, Austrian groups of companies can consider acquisitions of goods from its foreign subsidiaries as Austrian origin to the extent of 30% of the purchase price. Additionally, if foreign supplies contain substantial portions of Austrian origin, such portions can also be regarded as value added in Austria.

For services (e.g., design, planning, engineering, assembling, construction work) which are not allocated to specific material components, the determination of Austrian or foreign/local value added is based on the location of the principal office of the company providing the services. Wages and salaries for those foreign employees of the company providing the services who have an Austrian employment status (social security contributions and taxes are paid in Austria) are deemed to be value added in Austria in the same way as daily allowances and local catering for Austrian employees.

For transportation costs which are not allocated to specific material components, the attribution is based on the location of the principal office of the forwarding agent or carrier.

If the foreign content exceeds the permitted extent, it will be necessary to examine if such portions can be covered by OeKB on the basis of reinsurance agreements (with other export credit agencies) or if an adequate reduction of OeKB cover can be accepted.

OECD Consensus

Means internationally recognised guidelines (gentlemen´s agreement) on export credits with repayment terms of two years or more which include the following key provisions:

  • 15 % advance and interim payments must be effected by the buyer. This means that OeKB or any other export credit agency ("ECA") can cover max. 85 % of the export sales contract value.
  • Minimum insurance premiums (minimum benchmarks) for ECA cover against political risk (Knaepen package).
  • Country classification depending on the financial standing of the debtor country.
  • Maximum repayment terms depending on the financial standing of the debtor country and the borrower.
  • Rules about repayment of principal and payment of interest.
  • Rules about the repayment period defining certain terms and conditions.
  • Minimum interest rates for financing transactions with fixed interest rates.
  • Share of local costs under an ECA-covered financing.
  • Special regulations, for example for soft-loan financings (Helsinki V package).

Bank Austria offers OeKB/ECA-guaranteed buyer-based export finance in the following forms in accordance with the basic requirements listed above:

  • Buyers Credit
  • Soft loan financing

Financing variants covered by the OeKB:

Project finance

Project finance under OeKB guarantee is an in general medium- and long term form of financing which differs from "traditional" export financing for the following reasons:

  • Project Finance is applied when the granting of the loan is based primarily on the commercial viability (cash flow) of the project. 
  • The loan for the project to be financed is serviced by the project itself. This means that only the expected cash flows from the project can be used for repayment (the eligibility for an OeKB guarantee correspond to the OECD criteria for project financing).
  • In accordance with this, Bank Austria and OeKB develop a financial assessment on the basis of projections such as feasibility studies and cash flow projections, as well as corresponding sensitivity analyses.
  • The overall financing for the project consists of equity contribution of the sponsors and debt capital, whereby the share of each depends on the individual circumstances.
Multi-Sourcing

The increasing economic globalisation and the resulting flows of goods are leading to an increasing number of supply consortiums and complex export projects. In order to meet the current needs and expectations of its customers and the market, Bank Austria began building up the necessary know-how for complex financing solutions in a very early stage.

The so-called "multi-sourcing" solutions structure complex financing transactions for different supply components from different countries, taking advantage of the maximum hedging options.

Advance payment and local cost financing

The Structured Trade & Export Finance team at Bank Austria has an extensive know-how in ancillary loan.

In addition to the financing tranches covered by the export credit agencies, Bank Austria also offers financings for advance payments (with or without private insurance cover, as the case may be) and local costs for the realisation of 100% financing of export projects. Under certain circumstances Bank Austria might also covers the risks which are not borne by the export credit agencies under certain circumstances (i.e. the residual risks, like for example "self participation").