Dutch credit debt swaps increase Indonesia risk profile

(ECA Watch, 29 August 2008) Because of Atradius DSB cover for the export of military navy vessels to Indonesia with a value of about €1 billion some years ago, [the legal cover ceiling for Dutch export credit support to Indonesia is only €1.5 billion] many regular Dutch exporters have found it hard to get ECA cover for their exports to Indonesia. The Dutch Government has developed hedging mechanisms to pass the risk off to third parties, allowing increased Dutch exports to Indonesia to receive export credit subsidies. Following last year's pilot of €60 million, additional credit default swaps for an amount of €150 million have been announced. Pilot exposure swaps were earlier conducted with EKF, the Danish ECA and the Dutch State also entered into a number of reinsurance agreements with other parties for part of their exposure on Indonesia. The Dutch Ministry of Finance did not disclose information on which banks they signed contracts with.