Letter of credit insurance

Letter of credit insurance is purchased by exporters’ banks that confirm, discount, or otherwise finance commercial letters of credit issued by foreign banks in countries with developing or risky economies.

Confirming banks with letter of credit insurance are protected against non-payment of letters of credit by issuing banks for virtually any reason following presentation of conforming export documents. Letter of credit insurance can be purchased to cover a single L/C, an issuing bank, or a selected portfolio of letters of credit or issuing banks.


Foreign buyer credit facilities

A growing number of lenders provide short-term trade finance to companies located in emerging foreign markets, without letters of credit, for individual orders or revolving purchases from suppliers in the USA or other countries.

Such lenders can cover virtually all commercial and political risks of non-payment by their foreign borrowers with comprehensive trade credit insurance. This coverage manages a lender’s concentration of trade finance risk associated with a single foreign borrower and may engender new business relationships for the lender with the borrower’s U.S. and overseas suppliers.


Medium term export credit insurance

Medium term export credit insurance is purchased by lenders who make multi-year export finance loans to companies in emerging foreign markets for their purchases of capital equipment from exporters in the USA or other countries.

Insurance protection against virtually all commercial and political non-payment risks can be structured with terms of up to five years. New medium term export credit insurance policies offered by some underwriters afford experienced lenders the benefits of “multi-buyer” coverage, including delegated authority, programmatic terms and conditions, and blended premium rates.


Deprivation of collateral coverage

In order to extend medium term export finance, capital/operating leases, or other kinds of trade finance, financial institutions may depend upon liens they’ve perfected on capital equipment or other assets located in foreign countries.

Lenders can obtain collateral deprivation insurance to protect against confiscation, expropriation, or nationalization of such assets. This political risk insurance mitigates the risk to lenders of being prevented from exercising their legal rights over collateral following a trade finance payment default or at the end of an equipment lease.


Political risk insurance for investors

Political risk insurance is purchased by investors who extend medium term or long term export finance, project finance, or cross-border debt or equity investments into high-risk foreign countries. Political risk insurance policies can also cover loans made to U.S. companies for investments in their own international operations.

Payment defaults or investment losses are covered if they’re caused by expropriation, political violence, currency inconvertibility, export/import license changes, or other government actions, country issues, or political risks.


Note to banks and asset-based lenders

Meridian Finance Group does not provide any export finance, working capital, A/R financing, or letters of credit to companies located in the USA. We offer no services that compete with those offered by most U.S. banks or asset-based lenders.

The word "Finance" in our name refers to Meridian's facilities for arranging medium term cross-border equipment financing, foreign buyer credit facilities, and other kinds of international trade finance for buyers in emerging foreign markets.

When we broker export credit insurance, our insured clients sometimes require financing for their foreign receivables (and/or their domestic receivables, inventories, or other assets). Some of our clients may also need assistance with export or import letters of credit, foreign exchange, or documentary collections.

For these kinds of trade finance services, we regularly refer exporters to their local banks or asset-based lenders. Meridian has clients throughout the USA. If you’re interested in financing credit-insured foreign receivables, let us know about your lending parameters and we would be pleased to refer prospects that fit your profile.

Give Meridian a call if we can be of service to you or your customers, or feel free to have exporters contact us directly. All referrals are handled by Meridian in the strictest confidence and with the greatest respect of the relationships between banks/lenders and their customers.