Benefits of becoming an ATI shareholder - African Trade Insurance

Benefits of becoming an ATI shareholder

ATI is rated one of the strongest institutions in Africa with an investment grade rating from S&P Global Ratings. Based on strong capitalisation and a robust business strategy we are able to help our investors obtain a healthy return on their investment. An investment in ATI can be leveraged up to 30 times to cover projects valued at between USD600 million to USD1 billion. In addition, our strong growth rate and profitability is expected to lead to dividend payments to our investors in the near term.

ATI’s products have been used by member governments as an alternative to sovereign guarantees, to enhance  their letters of comfort and to reduce their debt ceiling.

In many member governments, the risk of expropriation, unilateral withdrawal of licenses, nationalization of assets and other perils often prevent the flow of investments into their countries. This can jeopardize a government’s chance of attracting foreign capital to develop priority areas. In these cases, ATI’s solutions are vital.

Some parastatals have a challenge honouring their obligations. These payment defaults can lead to difficulties attracting capital. With ATI’s cover backing the financing, lenders are more likely to finance parastatals at reduced rates.

Emerging countries often prefer to attract private investors for power generation. This allows them to increase the country’s capacity without borrowing and it avoids the added responsibility of managing the plant. Financiers require strong guarantees before funding these operations. ATI offers a solution, which allows the financier to safely lend to the government.

In most developed economies there are private credit insurers who insure exporters against the risk of not being paid by their clients. This product is rare in sub-Saharan Africa and, as a consequence, exporters must request for payment conditions (pre-payment, letters of credit, etc.) which affect their competitiveness. ATI can insure exporters against the risk of non-payment for single transactions or on a portfolio basis.

Small companies often have great difficulty accessing bank financing because they are seen as fragile. ATI has developed a number of products to make it easier for banks to finance these prospective clients, which strengthens both banks and SMEs.

State-owned companies are often seen as poor credit risks because of their perceived inefficiency. ATI’s strong partnership with member governments allows us to insure both domestic and foreign suppliers against non-payment risks. This arrangement helps state-owned companies get better credit conditions that off-set the cost of insurance.

In most developed countries, international banks have specialised departments to handle transactions involving insurance from the national export credit agency (ECA). This type of insurance allows banks to offer great conditions to their clients. In addition, Basel II rules provide banks with capital relief (up to 100%) for transactions that are backed by ECAs. Local banks in sub-Saharan Africa lack these facilities making them less competitive. Subject to an agreement by the local bank regulator, ATI can address this handicap.

ATI does not compete with local insurers. Instead, we help them to better manage their business. This has been the case specifically for two products - political violence & terrorism and for bonds, where we provide additional capacity to local markets.

To learn more contact us at membership@ati-aca.org

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