Northstar opens Europe JV to finance SMEs

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23 June 2009

Canada’s Northstar Trade Finance has launched a European-based joint venture with ODL and SNCI to provide trade finance solutions for SMEs.

Vancouver, Canada-headquartered Northstar Trade Finance, together with Office du Ducroire-Luxembourg (ODL) and Société Nationale de Crédit et d’Investissement, has launched Northstar Europe based in Luxembourg. The new entity will provide term trade finance solutions for European small and medium-sized enterprises engaged in international trade, as well as larger firms with small and medium sized transactions. The banking licence was granted as of 17 June.

Northstar Europe will structure buyer financing for foreign buyers of European goods for values up to Eu5 million, and for up to five-years per transaction. The company expects to fund transactions that, because of their size or term, would otherwise not have had funding generally available to them. The set-up is expected to fill a recognised gap in the financial markets, providing vendor finance for export sales.

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Poll

Will Russia’s recent ban on grain exports result in a significant rise in private risk insurance claims from grain traders unable to fulfil their contracts?

Yes – there will be more claims. The government’s actions allow traders, with PRI cover, to make claims through contract frustration.

No - the majority of Russia’s wheat production, some 70%-80%, is used for domestic consumption so the contracts represent only a small portion of the total wheat market, limiting the amount of potential claims.

23%

No - traders had a week’s notice before the ban allowing them to secure alternative supplies to fulfil contracts stated as optional origin.

23%

Maybe - but claims are likely to be limited to traders dealing in soft wheat whose contracts demand they source wheat only from Russia.

46%