EIB Guaranteed Trade Finance Facility

Bank of Cyprus, in collaboration with the European Investment Bank (EIB) is introducing to Cyprus a new credit facility aimed at boosting foreign trade activities through guarantees offered by the EIB.

In order to facilitate foreign trade transactions by healthy small and medium-sized companies (SMEs) and mid-cap companies (the “businesses”), Bank of Cyprus, in collaboration with the European Investment Bank (EIB), is offering a new credit facility up to €50m, the objective of which is to boost the volume of import/export transactions.

 

Under the trade finance facility the EIB will offer guarantees to selected foreign Correspondent Banks to cover risks related to letters of credit and performance bonds, of a maximum duration of one year, issued by Bank of Cyprus.

 

The purpose of the scheme is to provide these instruments to businesses at the lowest cost possible. The programme favours foreign trade activities and will create the conditions to help boost domestic production. In this way it is expected that the scheme will re-ignite trade flows with Cyprus, favouring an export-led recovery.

 

Scheme beneficiaries

Eligible for the scheme are autonomous* and healthy businesses based in Cyprus with less than 250 full-time employees (SMEs) and independent Mid-Caps with less than 3000 employees.**

 

Eligibility

Non-eligible are businesses active in the fields listed below, or where requested transactions relate to the following activities:

  • Manufacture of weapons, munitions, military or law enforcement gear and infrastructures, gear and infrastructures the use of which result in the abridgement of civil liberties (e.g. prisons, detention centres/holding cells of any kind) or violation of human rights.
  • Games of chance and related equipment.
  • Manufacture, processing or distribution of tobacco.
  • Activities involving live animals for experimental and scientific purposes, where in the opinion of the EIB, compliance with the European Convention for the Protection of Vertebrate Animals used for Experimental and Other Scientific Purposes is not assured.
  • Activities entailing or causing environmental impacts that cannot be mitigated and/or offset to a significant degree in the EIB’s opinion.
  • Fields considered unethical or morally questionable or are prohibited under international law e.g. research into human cloning.
  • Core real-estate activities.
  • Core financial activities e.g. trading in financial instruments.
  • Any other fields listed as non-eligible in the NACE codes provided by the EIB to respondent banks.

 

* “Autonomous” means, in relation to any SME or Midcap: 

  • less than 25% of its equity or equivalent is owned by another enterprise or individual; or
  • 25% or more of its equity or equivalent is owned by another enterprise or individual, but the group employs fewer than 250 persons on a consolidated basis; or
  • 25% or more of the equity or equivalent is owned by a public body and the public body is a local authority with an annual budget of less than EUR 10,000,000 and in an area of the authority’s administration which has fewer than 5000 inhabitants; or
  • up to 50% of the equity or equivalent is owned by companies or institutions in line with the exceptions detailed in Annex of the Commission recommendation 2003/361/EC of 6 May 2003, article 3, paragraph 2 (i.e. venture capital funds or “business angels”, provided that they invest less than EUR 1,250,000 in the same company, universities or non-profit research centres, institutional investors (e.g. pension funds, insurances) including regional development funds).

 

**Relates to independent businesses, and is calculated from data gathered on the date of filing of an application.

 

Terms and conditions of EIB guarantees

The EIB offers guarantees provided that the business/applicant and/or eligible trade transaction meets the following conditions:

  • The credit or letter of credit incorporates the rules and regulations of the International Chamber of Commerce, UCP, URR, ISP or URDG (depending on the case) or includes a provision on applicable law.
  • The business/applicant is an SME or a Mid-Cap based in Cyprus.
  • The transaction is executed exclusively in Euros (EURO €) or US dollars (USD $).
  • 85% of the transaction amount does not exceed €12,500,000 (or the equivalent in USD under the exchange rate on the date of the Participation Notice).
  • No document pertaining to an eligible transaction shall contain any term which in any way prohibits or curtails the granting of rights to the correspondent bank as such rights arise from the transaction. In the event any such prohibition is stipulated, any one of the parties involved must validly lift the prohibition for the duration of the transaction.
  • The business/applicant agrees that the correspondent bank shall provide information on the transaction to the EIB without the prior consent of any of the parties involved, including the business/applicant.
  • The business/applicant is not active in non-eligible fields (as described above).
  • The business/applicant agrees that the transaction and the documents relating to the transaction can be provided to the EIB and to other EU organisations, should the EIB deem it appropriate.

 

Pricing

The Issuance Commission of the scheme ranges from 1% to 4.25% per annum depending on the type and level of security offered, plus the standard commissions / charges of involved banks.

Note: The calculation of the Issuance Commission is done on a monthly basis, with a minimum period of three months and minimum amount €25 for Performance Bonds/€50 for Letters of Credit. 

 

Other features

  • The scheme has a duration of 2 years, and the maximum duration of each transaction will be 12 months.
  • All terms and regulations of the Bank shall apply e.g. security, repayment etc.

 

Contact

For further information, and to obtain the supporting documents for filing an application as required by the Bank, please contact the officer responsible for your account or the Call Centre at 800 00 800 (dial +357 2212 8000 if calling from abroad).

 

THE BANK RESERVES THE RIGHT TO REJECT ANY APPLICATION OR TO WITHDRAW OR AMEND THE PRODUCT WITHOUT NOTICE

CONTACT US 800 00 800 / (+357) 2212 8000 EMAIL US