1. EXPORT FINANCING AND RISK UNDERTAKING SOLUTIONS FROM EXIM HUNGARY GÁBOR SZŐCS, DIRECTOR VIKTOR BERKI, DIRECTOR 14 May, 2015 Kiev

2. INTERGRATEDSYSTEM TO SUPPORT FOREIGN TRADE AND ECONOMY INTERGRATED SYSTEM TO SUPPORT FOREIGN TRADE AND ECONOMY 2 OWNED BY THE MINISTRY OF FOREIGN AFFAIRS AND TRADE 20 YEARS IN SERVICE OF HUNGARIAN EXPORTERS

3. 3 OPERATION WITHIN AN INTEGRATED ORGANISATION the scope of activities is split between Eximbank and MEHIB; within an integrated framework

4. 44 EXIM OVERVIEW Specialised credit institution / export credit insurance company Set up by acts of parliament in 1994 EXIM has to comply with guidelines and directives of: WTO OECD and the EU Wholly owned by the government of Hungary with ownership rights exercised through the Ministry of Foreign Affairs and Trade MISSION EXIM IS AN INSTRUMENT OF ECONOMIC POLICY IN SUPPORT OF HUNGARIAN EXPORTS Financing and undertaking risks not covered by commercial banks and/or private insurance companies; to enable Hungarian companies – whether small or large – to take their export opportunities by assisting in financing the export of Hungarian goods and services

5. KEYFIGURES KEY FIGURES 5

6. 6 EXIM’S MAIN STRATEGY Hungarian export companies and the support of their subcontractors Finance of the enlargement and creation of export capacities Dynamic growth and active credit finance determined in the export incentive strategy of EXIM Increasing the credit capability of the Hungarian bank system

7. 7 Exports and imports of goods and services EUR M HUNGARIAN EXPORT SECTOR

8. 8 Overview of Hungarian exportation Hungary’s top export partners (2014) Rank CountriesExport (HUF bn) Share (%) 1 Germany25,506 26.2% 26.2% 2 Austria5,7825.9% 3 Romania5,1575.3% 4 Slovakia4,5704.7%4.7% 5 Italy4,4194.5% 6 France4,1864.3% 7 UK3,9754.1%4.1% 8 USA3,8093.9% 9 Poland3,6303.7% 10 Czech3,5063.6% 11 Netherlands2,9883.0% 12 Spain2,5302.6% 13 Russia2,2852.3% 14 Ukraine1,1962.0% 15 Belgium1,7281.7% 16 China1,6661.7% 17 Turkey1,6311.6% 18 Serbia1,4841.5% Others16,249 16.7% Total 97,079 100.0% 85% of Hungary’s exports are concentrated within Europe, with Germany (26.2%), Austria (5.9%), Romania (5.3%), Slovakia (4.7%), Italy (4.5%), France (4.3%), and the United Kingdom (4.1%) representing the largest shares Outside of Europe, Hungary’s largest export trading partners are the United States (3.9%), Russian Federation (2.3%), Ukraine (2.0%), and China (1.7%) Many of these Hungarian export companies are small and medium-sized enterprises (SMEs) with limited access to credit and liquidity due to the financial/banking crisis EXPORT RELATIONS

9. 9 OVERVIEW OF EXIM PRODUCTS AND PORTFOLIO

10. FINANCINGPRODUCTS FINANCING PRODUCTS PROCUREMENTDelivery INCOME REALIZATION INVESTMENT CREDIT – FOR FOREIGN INVESTMENTS CAPITAL ASSET INVESTMENT CREDIT FOR EXPORT DIRECT EXPORT PRE-FINANCING REFINANCING FOR PRE-FINANCING BUYER CREDIT FACILITIES FORFAITING, SHORT- TERM PURCHASE OF RECEIVABLES REFINANCING FOR POST-FINANCING EXPORT PRE-FINANCING INVESTMENT FINANCING EXPORT POST- FINANCING SUPPLY CHAIN FINANCING REFINANCING FOR LEASING AND INVESTMENT DIRECTLY FOR COMPANIES FOR COMPANIES THROUGH CREDIT INSTITUTIONS TIED AID PRODUCTION DELIVERYINVESTMENT

11. RISK UNDERTAKING PRODUCTS (INSURANCE) LOAN GUARANTEE SUPPLIER CREDIT INSURANCE (S) EXPORT RECEIVABLES INSURANCE (C) INVESTMENT INSURANCE (B) MANUFACTURING RISK INSURANCE (G) termeléskiszállítás befektetés, beruházás árbevétel realizálás NON-SHAREHOLDER’S LOAN INSURANCE (BH) BUYER CREDIT INSURANCE (V) SUPPLIER CREDIT DISCOUNTING INSURANCE (KV) FACTORING INSURANCE (CF) EXPORT L/C CONFIRMATION INSURANCE (AI) COMMERCIAL GUARANTESS PROCUREMENT PRODUCTIO N DELIVERY INVESTMENT INCOME REALIZATION EXPORT PRE-FINANCING INVESTMENT FINANCING EXPORT POST- FINANCING Directly for companies For companies through credit institutions

12. To promote increased domestic supply production that in turn generates additional export revenue for the investing entity. Tenor: 2-15 years The facility is available for capacity improvements, refurbishment and modernization. Manufacturing equipment, heavy machinery, production lines, fixed assets, commercial property purchase, building and remodeling (up to a maximum of 50% of loan amount). 12 INVESTMENT LOAN

13. EXPORT BOOSTING CREDIT PROGRAM (EHP) INDIRECT EXPORT PRE-FINANCING CREDIT - UP TO 2 YEARS INDIRECT EXPORT POST-FINANCING CREDIT REFINANCING FOR EXPORT PROJECT FINANCING LEASING REFINANCING CREDIT FACILITY FOR EXPORT INDIRECT EXPORT PRE- FINANCING CREDIT - 2-5 YEARS FACTORING REFINANCING CREDIT FACILITY FOR EXPORT FACTORING INSURANCE (CF) BUYER CREDIT INSURANCE (V) EXPORT L/C CONFIRMATION INSURANCE (AI) SUPPLIER CREDIT DISCOUNTING INSURANCE (FACILITY KV) NON-SHAREHOLDER’S LOAN INSURANCE (BH) INCOME REALIZATION EXPORT PRE-FINANCING INVESTMENT FINANCING EXPORT POST- FINANCING PROCUREMENTPRODUCTIONDELIVERYINVESTMENT Through banks, credit institutions LOAN GUARANTEE PROGRAM

14. PARTNER CREDIT ISTITUTIONS

15. 15 Facilitating the performance and delivery of goods and services from the preparatory and production phases through inventory buildup and the receipt of the export sales revenue as stipulated by the commercial contract. Up to 85% of the commercial contract or supplier contract Fixed CIRR, 2-5 years amortized in 3 or 6 months installments EXPORT PRE-FINANCING

16. For domestic suppliers with existing supplier agreements with a Hungarian exporter Up to 85% of the net contract value – excluding value added taxes – of the submitted, executed supplier agreement is eligible for financing Benefits of direct financing for the supplier Financing is available for the entire production and sales cycle Fixed CIRR, 2-5 years 16 SUPPLY CHAIN FINANCING

17. The classic buyer’s credit facility has been applied is order to finance the purchases of goods and/or services supplied under a commercial contract concluded between the Hungarian exporter and a foreign buyer, and is typically secured by MEHIB insurance policy (type V) Typically 2-5 years (maximum 10) years, fixed CIRR Maximum of 85% of the foreign trade/general contracting agreement may be financed. A minimum 15% advance must be paid by the buyer at the start of performance. Local costs may be financed in part. 17 BUYERS CREDIT

18. 18 Covers exporters’ risks connected to their short-term, typically unsecured and open account transactions with deferred payment to non-marketable countries. covers against losses caused by the buyer’s economic situation andcountry risks beyond the partner’s control. This insurance is guaranteed by the state budget, consequently facility C can only be concluded for the export of products with a Hungarian certificate of origin. The facility would cover the risk of the manufacturing period. EXPORT RECEIVABLES INSURANCE

19. The object covered by the KV-facility insurance is the bank’s receivable purchased from a Hungarian exporter, originating from a medium or long-term supplier’s credit facility related to a foreign trade contract. The insured is the bank purchasing the receivable, or in the case of a bank consortium, the lead member of the consortium. The insurance covers the commercial and the political risk as well as the performance risk of the exporter. General 5 % self retention. 19 SUPPLIER CREDIT DISCOUNTING INSURANCE (KV)

20. 20 OECD GUIDING PRINCIPLES Main conditions of export credits 15% down-payment of the export contract value 85% financing of the export contract value Repayment preiod: maximum 10 years (12 years for PP, RE, water) Repayment frequency: semi annually Interest rate: CIRR, fix rate for the entire life of the credit Local cost: 30% of the export contract value Risk premium: MPR based on country risk, buyer risk, tenor of the loan Environmental and Social Policy Special rules for Project finance Tied aid FINANCING & INSURANCE CONDITIONS

21. 21 Tenor: 2-10 years (refinancing credit line for pre-financing: 2-5 years) Fixed interest rate for the whole tenor, payable every 3- 6 months in equal installments (until 14.05.2015) EURUSD 2 - 5 years0.81%2.02% 5 - 8.5 years0.93%2.52% 8.5 - 10 years1.09%2.84% CIRR (COMMERCIAL INTEREST REFERENCE RATE) FINANCING & INSURANCE CONDITIONS

22. 22 HUNGARIAN CONTENT FINANCING & INSURANCE CONDITIONS Hungarian content Goods: For any goods export at least half (50 %) of the goods transported within the framework of the export deal must be of Hungarian origin. Construction, installation: at least one quarter (25%) of the value of the Exporter’s contracts for construction, installation, technological installation, design and related services provided by the Exporter must qualify as export of Hungarian origin. Service: It is a requirement that more than fifty per cent of the employees of the Exporter (or its subcontractor in Hungary involved in the service) must be covered under the national obligatory insurance scheme. Certificate of Hungarian origin Product: certificate of origin issued by regional chambers of commerce and industry Construction, installation: certificate is issued by the head office of the Hungarian Chamber of Commerce and Industry. Service: EXIM examines.

23. Address: Hungary, H-1065 Budapest, Nagymező street 46-48. Phone: +36 (1) 374 9100 / Phone: +36 (1) 374 9200 Fax: +36 (1) 269 4476 / Fax: +36 (1) 269 1198 Web: www.exim.hu Email: exim@exim.huwww.exim.hu Thank you very much for your attention!