Euler Hermes AGA German export credit

Euler Hermes AGA is the mandate structure under which Euler Hermes Aktiengesellschaft manages the Federal Republic of Germany's export credit guarantees, known as Hermes Cover, and untied loan guarantees, through the AGA portal used by exporters and banks for official German cover.

Federal materials state that Export Credit Guarantees, Investment Guarantees and Untied Loan Guarantees are established foreign trade promotion instruments of the Federal Government. The Federal Government commissioned Euler Hermes Aktiengesellschaft to manage Export Credit Guarantees and Untied Loan Guarantees. Guarantees for Direct Investments Abroad are managed separately by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft.

Mandate and institutional form

Euler Hermes Aktiengesellschaft manages the state promotional instruments as mandatary of the Federal Republic of Germany and is the point of contact for questions relating to those schemes. The AGA websites are provided by Euler Hermes within the scope of that mandate. The customer portal myAGA is the application and service environment for export credit guarantee handling.

In Berne Union directories, Euler Hermes Aktiengesellschaft is listed for Germany. The official export credit agency function for German medium and long term export credit cover is therefore exercised through this federal mandate rather than as a private insurer writing cover on its own account for Hermes Cover.

Hermes Cover is the market name for German federal export credit guarantee products. Cover is granted only where private industry does not offer appropriate or sufficient insurance. The Federal Government concentrates on emerging economies and developing countries. Risk of bad debt losses is transferred to a large extent from the exporter or financing bank to the Federal Republic. Policyholders pay a premium commensurate with the risk.

Euler Hermes AGA products for exporters and banks

Export Credit Guarantees protect German exporters and banks financing exports against political and commercial risks. Political causes of loss include warlike events, civil unrest or payment embargoes because of exchange restrictions. Commercial causes include protracted default or insolvency of the buyer.

Cover is available before and after dispatch. Manufacturing risk cover protects during production. Export credit guarantees cover risks after delivery. Financing may take the form of supplier credit, where the German exporter applies for cover, or buyer credit, where a bank finances the foreign buyer and seeks buyer credit cover against non payment.

Untied Loan Guarantees support external financing of raw material projects abroad that are eligible for promotion and help secure raw material supply for German industry. Covered commercial risks include insolvency of the borrower and protracted default. Covered political risks include state intervention, war and warlike events, and non conversion or non transfer of local currency amounts.

Investment Guarantees, managed by PwC on federal mandate, protect eligible German direct investments in emerging markets and developing countries against political risks such as nationalisation, expropriation like acts, war and civil unrest, payment embargoes and moratoriums, and convertibility and transfer risks. Eligible instruments include equity participations, investment like loans, endowment capital and other rights qualifying as assets.

Eligibility and risk justifiability

Two key criteria govern state cover: eligibility for cover and justifiability of the risk. Transactions are eligible if they fit the supporting intentions of the Federal Republic. Exports by small and medium sized enterprises are regarded as particularly deserving of support. Restrictions may arise from the type of goods, country of destination, parties, payment terms, or environmental, social, human rights or corruption issues.

The Federal Government covers only transactions that are justifiable in commercial and political risk terms. Buyer creditworthiness and country risk are scrutinised. Particular political interests may permit cover at higher risk where labour market, structural, regional, foreign or development policy considerations apply.

Hermes Cover is available in principle to all German exporters irrespective of company size and transaction volume. Cover follows national and international rules. Medium and long term officially supported export credits are subject to the OECD Arrangement framework applied by Participants, including minimum premium and repayment disciplines.

How banks use Hermes Cover

Buyer credit cover sits in bank documentation as federal cover assigned or noted for the lender. The loan agreement sets payment and default terms. The cover instrument sets covered percentage, risks, exclusions, waiting periods, premium and claims conditions. Manufacturing risk and supplier credit covers protect the exporter's production and receivable exposures. Combined structures can run from production through final repayment.

AGA portal materials describe the three promotion instruments as capable of combined use where exporters also become investors abroad. That combination is product specific underwriting, not an automatic package. Credit review identifies which federal instrument applies, who is the policyholder, what percentage is covered and whether OECD Arrangement terms govern the tenor.

Foreign buyers seeking German supply often encounter Hermes Cover as the credit enhancement that allows banks to extend medium or long term buyer credit terms. The cover does not replace the commercial contract or the loan agreement. It sits beside them as federal risk transfer for defined political and commercial causes of loss.

Hermes Cover is therefore German official capacity. It is comparable in role to other national ECA systems, each under its own statute. Euler Hermes AGA denotes the federal mandate and portal administration, not a substitute for reading the specific policy or guarantee wording on a transaction.

Institutional boundaries

Euler Hermes Aktiengesellschaft also appears in private credit insurance markets under related Allianz Trade branding in other contexts. Federal Hermes Cover and untied loan guarantee business managed for state account must be distinguished from private market policies. The legal notice for the AGA sites states that the sites give general information on the federal schemes handled by Euler Hermes and do not constitute individual legal or economic advice.

Premium, waiting periods, covered percentages and exclusions are set in the individual cover documents and in federal product rules. Annual reports and community materials published through the AGA channels describe scheme development, but transaction underwriting still turns on eligibility, risk justifiability and Arrangement compliance for the relevant tenor.

Euler Hermes AGA German export credit support is therefore federal Hermes Cover and related untied loan guarantee capacity administered by Euler Hermes Aktiengesellschaft for the Federal Republic, priced and documented under German eligibility rules and international export credit disciplines, and recognised through Berne Union membership.