Export Development Canada Presentation to Senate Committee on Foreign Affairs February 17 th, 2004.

Export Development Canada

Presentation to Senate Committee on Foreign Affairs

February 17th, 2004

2


EDC is Export Development Canada (Exportation et développement Canada) Canada’s official export credit agency.

EDC helps Canadian firms complete international

sales, foreign buyers to purchase Canadian goods and Canadian firms to invest with confidence

Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.

EDC - Facilitating Canadian Trade

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EDC’s Services

Risk management services• Export credits insurance• Political risk insurance• Performance security insurance and guarantees

Financing Services• Direct buyer loans• Lines of credit• Note purchase agreements• Guarantees• Leasing arrangements• Structured finance solutions


EDC Credit Insurance

Claim Payment90%

CanadianExporter

Mexican Buyer

Claim

EDCRecourse

Commercial and political risks coveredCommercial and political risks covered Increases export opportunitiesIncreases export opportunities Enhances competitivenessEnhances competitiveness Increases working capitalIncreases working capital Access to EDC world-wide credit networksAccess to EDC world-wide credit networks

CREDIT INSURANCECREDIT INSURANCE

Example of Credit Insurance

Buyer non-payment, insolvency, Buyer contract cancellation,

or political risk event


Example of Financing

Mexican Buyer

Canadian Exporter

EDC

Loan Agreement

goods &services

Direct Disbursementto Exporters

FINANCINGFINANCINGTo offer buyers a complete sales packageTo offer buyers a complete sales package To meet foreign competitionTo meet foreign competition To provide a cash sale for Exporter and To provide a cash sale for Exporter and

Repayment terms for buyerRepayment terms for buyer

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9

3

102

15

2

16

4

21

5

24

7

30

6

33

8

36

8

44.2

7.4

46

5.9

048

12162024283236404448

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Insurance Financing

• Billions of Canadian Dollars

EDC Business Volume


EDC Regional OfficesIn Canada:- Vancouver- Winnipeg- Calgary- Toronto- London- Montreal- Quebec- Halifax- Moncton- St. John’sInternational Representations:BrazilChina

MexicoPoland

Centres of

Expertise

EconomicsLegal

Project FinanceTechnical

Int’l MarketsEquity

EDC’s Sector Teams

Machinery , Equipment &

Advanced Technologies

Aerospace

Surface Transportation

Energy

Mining, Infrastructure

Development & Services

Forestry

Agri-Food

Consumer Goods

Base & Semi

LargeExport sales > $1 million

SmallExport sales < $1 million

Emerging Exporters Team

Financial Institutions

Telecom

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EDC and Mexico

Mexico is a priority market for Canada and EDC.

Recognizing the opportunities to build on its business in Mexico, EDC established direct representation in Mexico City in April of 2000, and a second representation in Monterrey in October of 2002.

Mexico is the most important market in Latin America for EDC. In 2003 alone, EDC support totalled over $C 2.4 billion.

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EDC Business Volume in Mexico

0

0.5

1

1.5

2

2.5

3

1998 1999 2000 2001 2002 2003

Financing Contract Insurance & Bonding

Political Risk Insurance Short Term Insurance

10


Consumer Goods 2.49%

Base and Semi-Manufactured

5.73%

Agri-Food4.31%

Other0.92%

Advanced Tech. & Machinery and

Equip.4.91%Surface

Transportation11.83%

Forestry5.35%

Telecom9.13%

Energy 55.33%

MexicoEDC Business Volume by Sector

2003

11


218

271

341349

393404 413

0

50

100

150

200

250

300

350

400

450

1997 1998 1999 2000 2001 2002 2003

EDC Support for Canadian Exporters in Mexico

# of firms supported

In 2003 over 65% of our clients were small and medium sized Exporters.

12


61294

2525 1 30

30 664

45

75

Agri-Food AF Aerospace AS

Base and Semi-Manufactured BS Consumer Goods CG

Emerging Exporters EE Energy EN

Financial Institutions FI Forestry FO

Surface Transportation SF Advanced Tech. & Machinery and Equip. ATM

Mining&Infrastructure Dev.&Services MIDAS Telecommunication TE

MexicoNumber of Exporters by Sector

2003

13


Priority Sectors for EDC in Mexico

Power

Oil and Gas

Industrial Equip.

Automotive

Telecom

Agri-Food

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EDC's Relationships in Mexico

EDC’s success in Mexico is built on its extensiverelationships with key Mexican buyers, borrowers,government agencies, financial institutions andintermediaries.

Banks (private/public sector)

Industrial conglomerates

Private sector companies

Public sector agencies and departments

Trade Associations and other intermediaries

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EDC Credit Facilities in Mexico

Scotiabank Inverlat(through EDC-Scotiabank facility in Canada, US20 million)

Banamex, US$100 million (MOU)

BBVA Bancomer, US$75 million

Bancomext, US$75 million (MOU)

Banco Inbursa, US$50 million (MOU)

NAFIN, US$30 million

BANORTE, US$20 million (MOU)

Banobras, US$20 million

Pemex, US$50 million

US$200 million

US$200 million

CFE, US$50 million

Telmex, US$400 million

América Móvil, US$250 million(for subsidiaries in Latin America)

Grupo IMSA, US$50 million

MOU : Memorandum of Understanding

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Other important EDC Relationships

CEMEX MABE

NEMAK TFM

FEMSA EMPAQUES NAVISTAR

FEMSA COCA COLA INNOPACK

GALVAK METALSA

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EDC’s Structured Finance Solutions

Transalta Campeche S.A. de C.V.

Mexico

US$ 122,000,000

(EDC support included Political risk

insurance and Financing)

Gas fired power plant

Joint Lead Arranger

Mexico is becoming one of the more active markets for EDC in terms of structured finance transactions, particularly in the power and telecom sectors.

Examples of recent signings in project finance.

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EDC Market Representation in Mexico

Presence established in Mexico City in April 2000 and in Monterrey in October 2002 reflect importance of Mexican market.

EDC’s on the ground representation works in close collaboration with Canadian Embassy in Mexico City and Consulates in Guadalajara and Monterrey.

Support to EDC and Canadian Exporters through :

Relationship buildingTransaction supportMarket intelligence

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EDC Market Representation in Mexico

Mexican buyers, borrowers, and project sponsors as well as Canadian firms with an interest in EDC are invited to contact:

Douglas FortneyRegional Manager, EDC

(52-55) 5387-9316Fax. (52-55) 5387-9317

[email protected]

Miguel GonzálezEDC Assistant

(52-55) 5387-9318Fax. (52-55) 5387-9317

[email protected]

The Canadian Embassy in MexicoSchiller St., No. 529, Polanco,

11560 Mexico, D.F.

Noé ElizondoRegional Manager, EDC

(52-81) 8344-3200 ext. 3360Fax: (52-81) 8340-7703

[email protected]

Canadian ConsulateEdificio Kalos 108-AZaragoza 1300 Sur

Monterrey, N.L. México 64000

Export Development Canada Presentation to Senate Committee on Foreign Affairs February 17 th, 2004.

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Transcript of Export Development Canada Presentation to Senate Committee on Foreign Affairs February 17 th, 2004.