The shopping line guarantee: A new approach to supporting exports
Bpifrance Assurance Export is structuring shopping line facilities to provide French companies with flexible, simplified ways to access international markets.
One credit, multiple projects
Shopping line credit facilities offer an alternative to contract- or project-based export credit structures by allowing a single financing facility to support multiple purchases of goods or services from domestic suppliers. Like traditional export credit structures, this type of financing may benefit from an Export Credit Agency (ECA) guarantee, enhancing both the credit conditions and the overall structuring of a facility dedicated to export contracts. Bpifrance Assurance Export’s Shopping Line Guarantee therefore aims both to support and strengthen France’s export capacity.
The starting point for establishing a shopping line with Bpifrance Assurance Export is to identify a list of contracts between French companies and one or several buyers with one common borrower. The latter may be a corporate, a public or sovereign entity, or even a financial institution acting under an on-lending scheme. The list of contracts justifies the implementation of the ECA cover by demonstrating a potential pipeline of transactions between French suppliers and the borrower, as well as demonstrating French content.
To enhance the attractiveness of the product, Bpifrance Assurance Export accepts both the refinancing of contracts concluded prior to the establishment of the shopping line (‘reach-back’) and the financing of future contracts (‘forward-looking’). Reach-back transactions are, however, subject to certain limitations in terms of timing (typically up to 24 months prior to the signing of the loan agreement) and amount (generally capped at around 20% of the facility). These limits are set to encourage the borrower to develop new forward-looking contracts with French exporters, thereby supporting France’s export capacity and promoting a lasting commercial relationship with foreign buyers.
Once established, disbursements are generally made to the borrower in the form of refinancing (also called reimbursement) drawdowns, corresponding to batches of amounts paid to French exporters.
The remaining parameters of the Shopping Line Guarantee structure are largely tailored on a case-by-case basis. Such a facility may be established either by bundling several large-scale projects under a single financing arrangement or by promoting the procurement of goods from SMEs, helping to reach new exporters through an approach that allows smaller contracts to benefit indirectly from financing schemes.
To be tied or not to be
Bpifrance Assurance Export’s solutions always remain linked to the notion of domestic interest, whether they concern tied or untied products. To ensure that each shopping line contributes to the French economy, the Shopping Line Guarantee is therefore linked to underlying commercial contracts.
Each commercial contract included within the facility is notified to Bpifrance Assurance Export, which reserves the right to refuse its inclusion. This framework is designed to ensure that the supported transactions collectively deliver tangible benefits to the French economy. French content is therefore still required but calculated on an aggregate basis.
Flexibility, but not at all costs
The primary challenge in product development lies in addressing market demands, particularly the need for simplification and flexibility, without compromising the high standards that have built the ECA’s reputation in risk assessment, environmental and social governance (ESG), and anti-bribery and corruption (ABC) compliance.
This balance between flexibility and oversight is reflected in the way shopping lines are structured. Close cooperation between exporters, banks, buyers and borrowers is essential to establishing the Shopping Line Guarantee. To streamline the structuring process, the ECA arranger plays a central role in managing the transaction, working hand in hand with the ECA and the borrower.
The Shopping Line Guarantee covers banks against the risk of non-repayment of the credit facility. As previously outlined, a single facility may encompass multiple projects and exporters. Exporters are no longer required to complete traditional insurance application forms.
Instead, the borrower, helped by the ECA arranger, completes a standardised spreadsheet containing the essential information required to identify each contract, such as the project name, exporter details, contract value, date of signature, and French content. (This list is not exhaustive.) For higher-value contracts, additional information may be requested directly from exporters, particularly in relation to French content, ESG considerations and ABC compliance. This approach significantly reduces the administrative burden by consolidating information related to all contracts into a single document, rather than requiring multiple application forms from exporters.
Importantly, environmental and social assessments continue to be conducted in accordance with the OECD Common Approaches or the Equator Principles. Bpifrance Assurance Export retains the right to decline financing for any contract that does not meet its standards, ensuring that increased flexibility does not come at the expense of environmental and social commitments.
