The medium and long term transactions involving private foreign buyers are for the export of Brazilian capital goods and/or services. These financing transactions are subject to commercial (default), political and extraordinary (transfer of funds) risks, according to Decree 3.937 of 25 September 2001.
The analysis that permeates this type of financing is focused on evaluating the ability of the debtor (importer) to honor the loan contract. ABGF´s risk assessment model is based on the debtor’s financial statements.
The model includes an internal credit scoring system (comprising the assessment of the industry and macroeconomic scenarios in which the company operates, as well as the historical accounting data and its financial indicators) and pricing according to the Minimum Premium Rates (MPR) of the Organization for Economic Cooperation and Development (OECD).
The buyer’s credit record is obtained through an international information network, the Berne Union, and data from external sources are also considered in the ratings. For political and extraordinary risk, ABGF assesses the buyer’s country risk.
Corporate credit risk transactions can also be subjected to the Reciprocal Credit Agreement (CCR) of the Latin American Integration Association – ALADI – (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela). In addition to the macroeconomic environment of the buyer’s country, four-month data on the transactional flow of that country in the CCR is evaluated.