Lloyds Banking Group has made its first transaction using the UK export credit agency’s letter of credit guarantee scheme.
Lloyds has provided UK-based Spooner Industries with a €2mn trade facility which is benefitting from ECGD backing of €1mn under the UK agency’s guarantee scheme.
The facility will finance a €5mn export order for drying equipment for the paper industry in the Philippines.
The ECGD backing is developed on a partial rolling confirmation structure which provides cover on a shipment by shipment basis, rather than the entire order value.
Mike Brook, managing director of the Yorkshire-based Spooner Industries, says: “The supply contract to our buyer in the Far East is a very significant size and thus the mitigation of payment risk was a vital element in enabling us to export our goods.
“Lloyds’s ability to construct an innovative trade structure delivered a solution that gave us sufficient levels of committed risk assurance at a very competitive price.”
ECGD’s chief executive Patrick Crawford adds: “We’re very pleased to have been able to help Spooner Industries with this order. We introduced [the] letter of credit guarantee scheme as a way of increasing capacity in the market, and I’m happy to see the scheme doing its job.”
Six UK banks including Lloyds are currently listed as participants in ECGD’s guarantee scheme; the others are Barclays, RBS, HSBC, Standard Chartered and Bank of London and the Middle East.
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