The New Zealand Export Credit Office (NZECO) and Canada's Liberty Mutual Insurance Company have entered into an arrangement to assist New Zealand exporters secure Canadian surety bonds.
Surety bonds are a form of performance guarantees provided to a buyer. In the Canadian market such surety bonds typically range between 50 – 100% of the contract value. They are typically required in construction contracts and normally if the project is receiving federal or local government funding.
The NZECO arrangement is designed to assist New Zealand exporters overcome difficulties they may experience in securing a bonding line from a Canadian surety because of insufficient tangible security and the lack of familiarity with New Zealand companies.
"We are very pleased with this new arrangement with Liberty Mutual, and look forward to assisting New Zealand companies to access new projects in Canada," says Chris Chapman, Manager of the NZECO.
This arrangement is based on a similar and successful arrangement that NZECO has had with the United States' Liberty Mutual Insurance Company. Over the last five years, NZECO has underwritten surety bonds ranging from USD 1 million to USD 21 million in support of New Zealand companies delivering airport baggage handling, construction, public safety and ICT projects.
NZECO (www.nzeco.govt.nz) is New Zealand’s export credit agency which provides a range of government-backed trade credit insurance and financial guarantees to New Zealand exporters. NZECO's products can cover repayment and performance risks which may enable exporters to secure and fund export sales.