NZECO Introduces Contract Bonds and Targeted Working Capital Products
16 Nov 2007
On 12 November 2007 Cabinet agreed to the New Zealand Export Credit Office (NZECO) offering two new products: a broader contract bond guarantee and a targeted short-term working capital guarantee.
These guarantees will be provided to commercial bond providers and banks to enable them to support the additional growth of successful export companies.
These new products are targeted solutions to a specific gap in the market for the provision of trade finance and risk management, as an Export Year 2007 initiative.
A $100 million contingent liability has been established for exporters needing bonds and/or working capital. Access to the NZ$100m facility will be on a first come, first served basis, but as the guarantees expire - the funds will be accessible once more, so the facility will be revolving. In addition, the Government has the flexibility to increase the facility in the future if demand for this new product is much larger than anticipated.
Both of these products will be operational from April 2008.
Other associated products and work programmes
The NZECO’s U.S Surety bond guarantee is operational and has been successfully used by firms when contracts have been awarded or to compete in tender processes. For further information: US Surety Bond Guarantee.