Canada–UK Export Finance Partnership: Unlocking Global Defence Opportunities

Wilson Pearce  
Welcome and thank you very much everyone for attending. You know, we’ve got an hour with a topic like this that kind of has us just rushing past the buffet.
But that’s fine. We’ll start with that. We’ll get that information rolling. I think you’ll find that Oscar and his colleagues from UK Export Finance are a wealth of knowledge and we have some background and context to provide to you from the standpoint of how CCC works. So I’ll start as you’re.
As your MC and host, I am Wilson Pearce. I’m the Senior Director of Trade Strategy and Operations with the Canadian Commerce Corporation. I’ve been with CCC for about three or four years. I was originally an exporter.
Came into the organization because of my interest in the mandate and helping Canadian companies develop, secure and manage contracts with foreign governments abroad. I’ll stop there because I will talk a little bit more about CCC in a moment and maybe I’ll hand the mic over to my friend Ozgur who will talk.
Introduce himself and his colleagues from UKEF.

Ozgur Kutay 
Wilson, thank you very much. I hope you can hear me well. I’m Ozgur. I’m based in Toronto in Canada with UK Export Finance. I’m one of the, or part of the international network, which is now about 25 people around the world.
I am a former banker, a corporate investment banker, but have been with UKEP now for eight years, but last year and a half in Canada only. And we’re proudly joining today this conference call based on the MOU we signed last year with CCC.
to join forces and help both countries’ exporters out. I’m also joined by a couple of my colleagues from UCEF HQ in London. First of all, there is Natalie Ribovage, who is a senior business origination officer. Hi, Natalie.

Natalie Rybova  
Hi everyone. Yeah, very, very quickly happy to just jump in. So yeah, my name is Natalie. I’m a senior business origination officer. I’m London-based, supporting Ozgur from abroad, but pleasure to meet you all.

Ozgur Kutay  
Perfect. So that means for the time being, that’s it from you. Back to you, Wilson.
Wilson Pearce  
All right, great. Well, again, so in terms of the, the agenda and the flow for the webinar today, we’re going to start. I’m just going to give a brief intro around the Canadian Commerce Corporation for those of you on the call who may not be familiar with us.
I’m gonna talk a little bit about the market overview and the market opportunity specifically with respect to the defence and aerospace market in in Europe. We could have a another extended call on defence and aerospace markets in other regions, but for a number of reasons.
We’ll focus on the European market today and then from there I’ll talk a little bit about the context, you know in terms of the relationship between CCC and UKEF and then I’m gonna hand the floor over to Oscar who will walk you through a number of elements.
Of UCAF, how UCAF operates some real world examples. We’re going to talk a little bit about how, how you would apply, like how and when you would apply for export credit agency support from UCAF. I I’m going to assume the export credit agency world is 1 which we’re all generally familiar with, but I think you’ll.
You’ll pick up some more, some more knowledge on that just in in listening to Oscar describe UKEF.
So having said that, CCC, Canadian Commerce Corporation, we’re a Crown corporation. We report to the Minister of International Trade. We’ve been in existence for a little over 75 years. Our mandate is to work with Canadian exporters.
Uh, who are selling goods and services to foreign governments abroad? That covers a wide range of sectors. Uh, you know, the largest part of our pipeline at any given point in time is aerospace and defense, and that’s because of the nature of aerospace and defense sales.
Uh, they tend to be the kind of sales where a foreign government buyer is buying directly. It’s not always a B to B. Uh, it’s more of a B to G kind of sale. Uh, and it’s the kind of sale where the foreign government is interested in getting the kind of security and transparency around the contracting process that CCC delivers.
What I mean by that is that we will step in and do a due diligence on Canadian exporters to ensure from a financial, managerial and technical standpoint, they have the capacity to deliver the goods or services that are being sought by a by.
By a foreign by a foreign buyer. And so we do that by providing a performance contract guarantee. And the way we provide that guarantee on the contract performance is that we actually sign the prime contract now in signing the prime contract.
Immediately sign a domestic with yourselves. We are strictly A contracting body. One of the reasons we have this relationship with UKF, Oscar will describe in in more detail, is that it’s invaluable for us to have relationships with export credit agencies and banks, including our own export Development Corporation.
Canadian banks, regional and local banks, because the financing is part of the transaction. We’re not a signatory to that, but it is part of the transaction. So we think it’s important that people are familiar with that now.
Let’s talk a little bit about the Um, excuse me, let’s talk a little bit about the European market. I think I don’t need to reread the Uh, the Globe and Mail, Uh, BBC, World News, CBC or anything like that in terms of world events and what is triggering.
A renewed interest in spending in defence and aerospace by a number of jurisdictions around the world, but it’s there and you know you spending I think in in in the European market alone, it’s expected to be a little over almost 400 billion euros this year.
Up to somewhere in the area of 800 billion euros by 229 or 2029. So it’s a it’s a market which is growing significantly. Canada has a couple of interesting.
Angles into that market, if I can, if I can speak strictly as a as a Canadian exporter, one of those, one of those angles is courtesy of our access to a program called the SAFE program and it’s a program design, financing and management entity.
Uh, that is run by the Europeans. Uh, we joined SAFE in December of 2025. We’re the 1st and to my knowledge the only, but we are the first non European participant. So this is a program which is really designed to encourage the development of the defence and aerospace sector within Europe.
We have been granted A privileged access into that market. However, it’s not a it’s not a unique access and for a number of reasons it often works best if we partner with firms who are already within that market as well.
Which Oscar will speak to a little bit in terms of how Canadian firms and UK based firms, when they partner, they begin to have access to things like the UKF financing. But that’s one of the issues. There are programs like SAFE and a couple of these programs.
That are being put in place by the Europeans along with an effort to streamline some of their procurement, Uh, which is all designed to open up the European market Uh and accelerate some of the procurement activities that are Uh are going on in there, supported by a combination of financing vehicles.
Which are intended to, uh, allow people to quite literally put their money where their mouths are. Um, Canadian firms. We’re not, um, we’re not unique in the world. You know, there’s lots of companies doing lots of different things, but there are a couple of areas.
Where EU backed joint procurement and procurement in general may be of interest. First of all, the European Union Uh investment is focused to a large degree on multi Um or sorry on dual use technologies.
That’s cyberspace, AI, space, electronic warfare, integrated defence systems. Those of you who’ve been working in the sector know that as Canadians, we’re generally building defence solutions that are designed to be NATO compliant or integrated with other areas simply because there’s not enough.
Canadian purchasing to justify a lot of this design all by itself. So we’re well positioned Uh as Canadians to access this market because we think about integrated Uh design solutions. Um we’re focused on Arctic issues which are which is a little bit unique and as I said we’ve.
You’ve got skills in areas like drones, cyber warfare, electronic warfare, space assets and things like that. So there are some unique areas where we bring skills and technology to the table. And one of the things, you know, for anyone looking at market growth and market development is you’re often looking to partner.
Going in all by yourself as a Canadian is often a pretty tough way to enter a market. The Canadian Commercial Corporation can help. We can we can provide you that Government of Canada branding basically as you go into those discussions.
But in terms of the ongoing delivery, the maintenance and support, the local presence, the local business culture, it’s really important to partner with companies that are already in the market. So just almost a year ago we signed an agreement with the UK export.
Finance organization where if you sign a prime contract, the GG contract with Canada and you have a you meet the criteria for financing, which generally involves an element of the UK in your supply chain or in your partnership.
It makes you eligible for UKFUKF financing. So we wanted to talk a little bit more about that just to start prompting some thoughts in those areas around what’s possible. So I think I’ll stop there. I’m just about where I wanted to be at 11:15.
I’ll pause there. Oscar will speak for at least probably the next half hour. He’s got some really interesting information to go through and then we’ll have a bit of a Q&A in the in the last 15 minutes. So I think I’ll turn it over to you Oscar and I’ll jump in occasionally but.
Off you go. Thanks.

Ozgur Kutay
Wilson, thank you very much. I think that was an excellent introduction to the discussion today, giving the background and the geopolitics that has been sort of stealing the headlines in the last one year and is going to stay longer.
I’m hoping to share my screen and share with you some slides. I’m hoping that you’re seeing them as we speak. So we are okay.

Wilson Pearce  
That was good.

Ozgur Kutay  
Okay, great. We are a UK government department, essentially. So we’re not a crown corporation. We don’t have a separate balance sheet, but, you know, working as part of UK government brings a lot of flexibilities and we are reasonably, we reasonably take pride
of being the first export credit agency that was set up in 2019. Over time, obviously, the environment has changed dramatically, had, you know, quite ups and downs economically, politically around the world.
But the UCEF has always been more on the innovative and flexible side when it comes to export credit agencies, which I’m going to point out in a minute how, you know, how we ended up with this webinar today and how we can join forces with Canada and support some projects that qualify for the export support.
countries. We are just to position, we are offering debt financing. So it is not equity, so it’s not an investment financing. We’re providing international debt that is in a non-concessionary basis.
which would be close to commercial debt. And we’ve been doing this for a long time using a lot of our banking partners, including some of them from Canada.
Last financial year, we were able to underwrite 14 and a half billion pounds of new business, and that included a mega size defence deal with the Polish government. In fact, we were financing about over 8 billion pounds of financing of short-range air defence missiles.
Maybe moving couple slides, maybe here quickly. This is a bit outdated and I’m proud to say that our capacity is now being increased over to 160 billion, hopefully. There’s A parliamentary discussion in the UK to double our support. So that’s good news. That will give us more firepower in the coming year.
financial year that is 1st of April.

Wilson Pearce  
Yeah.
Yeah, Oscar, sorry, I’m gonna jump in just for a second. We seem to have sort of inconsistent ability to view the slides. So we’ll, yes, somebody just asked. Yeah, we’ll be sharing the deck afterwards as well. So Oscar will be speaking to the deck. Oh, that’ll look different. I wonder if people are starting to see slides now.

Ozgur Kutay  
Go ahead.
Yes, we will.
We will.

Wilson Pearce  
We’ll deal with our technical issues, but yeah, apologies for those of you who can’t see the slides, but we’ll be sharing them afterwards as well. Sorry, I didn’t mean to jump in, but.

Ozgur Kutay  
Okay, no problem. I hope majority sees them. I can see them on the screen, so thank God. And maybe a few points on this one to step on some of the differentiating factors.

Wilson Pearce 
That’s helpful.

Ozgur Kutay
in our offer. One is the strength of the UK backed guarantee. Since we are a government department, when we sign that guarantee agreement that a bank funds your clients, ultimately, you know, these are different countries, usually governments, different of this world.
we will provide 100% unconditional guarantee on the amount that we agree. So that is quite strong. So I used to be in the lending business in commercial banks before. It has always been an issue when an ECA comes in and guarantees 90%, 80%, 98% different times.
But it’s always very, very good when you have this 100% guarantee so the bank can really deploy their funding under our guarantee to that project or to that purchase without or less with less strings attached, I think.
The second, I think, most appealing part of this conversation today is that we would require a minimum 20% of the contract value or our financing to be spent on UK content. And I’ll come to what we mean by UK content in a couple of slides.
But essentially, that gives a lot of flexibility, a lot of money on the table to be used for the Canadian content, obviously, but also local content.
in those projects. We have existing footprint on 23 different countries, usually located in British embassies or high commissions or consulates, myself being in Toronto. So we provide a lot of assistance to these
projects, businesses, buyers, by just being on the ground. Some of us cover more countries than the country they are residing in, like regions, but that gives us a good excess on the ground and understanding the matters around financing or the purchase. So that’s definitely a strong edge.
We provide long-term financing, competitive rates. We have over 60 currency options as well, although we expect most of the defence contracts are priced in, you know, US dollars, Euros, Canadian dollars, British pounds, and yens or Swiss francs, so the G7.
currencies mostly.
I’ll move to the next slide. This shows the basic diagram of how we would finance. I hope most of the people can see that. When I say UK exporter, you can consider this as the bidding consortium. So there must be a UK exporter or a UK export element in the bidding consortium.
There’s an export contract with the buyer. So this is your CCC led contract, right? And then UCEF comes in and provides a guarantee of repayment, as I mentioned, through three different products. One is the buyer credit, which is the most used one, where we provide a guarantee and a bank.
here on the right hand side funds the buyer. It might be the sovereign of a country, the Ministry of Finance, Treasury of a particular or Ministry of Defence of a country through a law, right? So that this bank doesn’t take the risk of that buyer or that country. And it’s in case of a, you know, things go
wrong, they have full recourse to UK government. And that makes obviously the pricing and the terms much more sort of accommodating for the project. We can also offer a smaller version of buyer credit that’s below 30 million pounds. We could do that as well. Less likely with a sovereign, but it is possible for us to do, you know, any size. And there’s also a direct lending option.
which is usually very, very limited. And we would always try to prioritise deals that have the highest UK content for those, which includes a limited pot. But yeah, that is the three main products that we can do. This is a chart about where we come in, where we fit.
in terms of the global financing food chain.
Obviously on the very left hand side, the beginning, it’s the grants, right, which we don’t do, but many countries do. They come in and provide grants. There are these concessionary lending structures, mostly the international multilateral financing organizations, that’s the World Bank, the
America Bank, the EBRD, and the African Bank and so on and so forth. But ECAs come in between them. ECAs are commercial and the pure commercial banks, right, where we would be providing
an advantage over the pricing and terms of the project, as seen here. So during the product life cycle, in the very early stage of technology, you would, that’s the dark blue line, you would be using probably grants, equity, and concessionary lending,
But it as goes into maturity and starts generating revenue, the red line that is, that’s where the public markets, commercial banks, ECAs, UCAP or others are interested. And obviously, eventually it ends with a Eurobond, the capital market, which is very common for the developing world to issue.
fixed income debt instruments by their governments usually in the international markets.
This is how the economics work. On the left hand side, you have this large blue light blue box, which is actually the risk premium that is paid by the borrower. Let’s say it’s a double B developing country. And you know, there’s a risk
premium on top of the funding cost, which also has the red, the bank profit margin, as well as, you know, covering their operating costs. On the right hand side, the two boxes, the red and the grey remain as they are, right? They don’t change because the bank needs to make that profit again and the operating costs.
pretty much the same, but we’re trying to reduce this light blue box to the right, where the risk premium of our AA guarantee and 100% government back guarantee will reduce it significantly, even if with our ECA premium, which I’m going to explain in a couple of slides,
together, added together, it should be much less. In most cases, the sweet spot is either the non-investment grade or low-end investment grade. And looking to the ambitions that would look into financing and where the CCC obviously will be the leading contracting
party, G2G contracting party, you would expect a lot of the developing countries anywhere around the world, Asia, Latin, Africa, Middle East, Eastern Europe, right, part of NATO, but kind of like rating wise a little bit behind than the developed world. Those are going to be the best targets.
Moving a little further, so UK content, and I think this is quite interesting how we define UK content. We’re one of the most flexible export credit agencies, and I’m going to just walk you through three main areas of UK content.
which is because we are requiring a UK element in your contract, and it could be your consortium partner, or it could be your supply chain, where you could be using a part of UK supply chain in terms of goods or services already.
And if that makes up from a value added point of view, a minimum 20%, preferably a little higher, we would be very happy to have a 30%, 30, 35% in a deal, then that we will consider that deal.
So we include goods in the middle here, which is the products applicable for a UK country of origin certificate, which are goods that are made or altered, modified in the UK, because we’re talking defence here, and I’m not talking very simple widgets, obviously these are complex.
So we will go by the value added part of a solution, a system solution in defense, right? What is the percentage of that particular end product is made in the UK? And that’s up to the exporting companies to tell us that. And services is quite interesting if there is design engineering, legal consultancy services.
And in defence area, there could be, you know, services provided through know-how transfers, things like that. These could be also counting towards the UK content. So let me stop here just to re-emphasize there is a low threshold already so that we can combine forces with Canadian exporters.
that is a minimum 20%, preferably a little higher, but you know, that is our rule. And then this is also easier or provides an easier way to reach that low threshold, relatively low, easy threshold by combining services, goods, and also intangibles on the right hand side, which is the intellectual property rights.
So there’s a patent, license, trademark, whatever in the sort of solution, the final product, we will consider as UK export content. The supplier fares are the ones that we bring in. You know, if there’s a project that is still looking for additional suppliers, we can always
make a day in London. Usually we bring in UK suppliers related to that project. It’s like a roadshow, but a commercial one. Some presentations by the lead contractor, ourselves, the bank, the borrowing country, their MOD or whatever.
And then the afternoon usually is the one-to-one meetings to make up for that. So a summary, at least 20% UK content. The overseas company would approach UKEP and present financing their buyer. G2G contracting can be supported.
as in the case that is done by CCC. So it can be the lead Canadian company that is in the contract under CCC can approach us. Or likewise, if it’s UK and having Canadian content, we can be able to do that as well. Procedures are otherwise regular.
We provide expressions of interest letters if needed at the bidding stage for that project, and we will leverage our overseas network, as I mentioned. And that’s not only us, the 20 or 25 live bodies in the network, but also using the British diplomatic
sort of network as well, where it’s helped together with the Canadian network, of course.
Yeah, quickly moving, maybe let me just go over and if there are any questions, I have my head of deputy head of defence also on the call and we can have the detail. But the defence area provides us to be able to deal with non-OECD terms.
So outside the OECD arrangement, which is even more flexible. So we can go up to 100% financing of the contract value. No, that’s good. Rather than up to 85% in civilian world. We can provide local content support. So if, you know, increasingly countries will require local content.
right, in those solutions, especially in defense, as the defence spending increases around the world. So if you have a project in Indonesia, right, if the government requires some local content as well, we are happy to look at it and consider that. And the repayment tenors, so beyond the delivery of the project, right, whether it’s a
it’s a service or it’s a sort of project building something together or just selling some equipment. Once it’s completed as per the commercial contract, then our repayment tenor starts and that can go beyond the off-the-shelf common arrangement term by OECD, which is 15 years, so we could do longer.
And we can also sculpt the repayment profile, but the borrower requires early payments, late payments, you know, skewed towards each end of the spectrum. That is possible for us to do that.
Few case studies, this one is, you know, quite public. There are some developing ones as well, but this one is in particular interesting. This is the UK, which is the defence and security sort of export organisation of UK and Babcock.
So these are mine sweepers and then Ukrainian government has been, you know, the borrower and the buyer of those. And we have put together this facility covering 100% contract financing with a three-year grace period and put in place in
two months. So that shows that we can be real quick. And this was not small, right? 300 million pounds. So that’s a good example. We can always, you know, when in the Q&A period, I can refer to my colleague, Josh Edwards from UK, who can walk you through on some of the recent case studies. There’s a, as I said, a large deal in
Poland in defence, air defence missiles. There is also not yet financed, but we’re about to look into the commercial contract to sign this public view, so I can share a number of second hand C-130 aeroplanes for the Turkish Air Force.
That is another deal that the team is working on. This is a good slide for our third country collaboration, where we don’t necessarily stick to UK only, as I keep saying. We’re happy to work even in the civilian place for other countries.
contractors. In this case, it would be CCC led G2G contract. It could be a Canadian led contract. It could be a UK led contract. There could be consortium members in both and happy to look at both angles as long as we satisfy the UK content. Examples here are…
Quite interesting, and I was sort of more aware of the two. This first one is a 250 plus bed healthcare facility in Guyana. It’s an Austrian contractor, Varmet, and UK content has been project and construction management, design and engineering, construction works.
supply and installation of mechanical and electrical equipment for the hospital. And our sort of loan was 160 million pounds for this 256 bed hospital where the borrower is the government of Guyana. So good example from Latin America. This one I was somewhat personally involved in the middle, that’s in Serbia.
That is a project building into the European motorway network. That’s a high technology 5G enabled motorway stretch within Serbia called the Morova Corridor. The builder was Bechtel.
So again, a non-UK lead contractor, and the UK content was comprising machinery, construction equipment, trucks and buses, and insurance, that is service, that’s property and casualty insurance. This was a billion euro project that stretch.
We financed 430 million of that along with MIGA. So it’s a multilateral organization, right? So it could be with MIGA or it could be with other ECAs, other banks. And then the UK content was about 30, 35% of this 430 million.

Ozgur Kutay  
This more recent one is in Saudi Arabia and it’s the Six Flags Kadia City. Six Flags, obviously we all know this part of the world. It is a US-based franchisor. It is a French lead contractor. The borrower is the Saudi pension, sorry, Sovereign Wealth Fund.
PIF. And this is a $700 million deal. It’s structured in a Sharia compliant way, Islamic financing. So we have flexibility to do these sorts of things, as I mentioned, currencies before, we can do this if needs be, if the client requires that, we could do that.
on a Sharia compliant basis for this large amount. But the UK content, most importantly, was mechanical engineering, plumbing, creative services, specialist lighting and security systems, which enabled us to do this deal. So again, Saudi borrowers, Saudi government,
borrower, a French lead contractor, US-based franchisor, and Sharia compliant financing, which is not small, but also UK content was possible to achieve.
Getting to the end of the presentation, maybe I should mention briefly two more important pages. One is the UCAP premium or ECA premium. We, because of the service that we do and financing, the risk we take, which is 100% non-payment.
credit risk on the borrower, we charge a premium. We charge a one-off up prompt premium that can be financed from the loan itself. So which means $100 million contract, say 15-year contract, let’s say the premium is 10% for the sake of simplicity.
We would add that 10% on the 100 million. We would lend 110 million. The 10 million we will keep as insurance. The 100 million is available for the project, right, as agreed initially. And the borrower will pay that 110 million in 15 years. So it is financed along with the project.
The premium is also financed. The premium, usually for the developing world, it’s a calculator, which is a function of the length of the contract, you know, the rate, the OECD rating, the credit risk of the country or the borrower.
and then some of the repayment terms. So it will provide a number really for sovereign borrowers, a percentage rather. And we will use that and we will finance that quickly. And I remember Wilson mentioning what stage, you know, we are involved. We’re happy to listen to you at an early stage as well.
But when it becomes a real project for us, where we start asking questions, putting in our deals pipeline, we start to get supplier pairs, talk to banks who can look into that, is the time when you are almost…
you know, sure about these items, right? What is the project scope? What is the project? What are we, what is, what is the consortium doing and what is, what are they going to build and sell? What are the terms, the timeline and all that, right? As first, the project scope. Secondly, the name of the borrower and the guarantor, I expect for the purposes of this
audience, it will be either the Ministry of Finance slash Treasury of a country, or it can be MOD equivalent of a country, DOD, MOD equivalent. So, but it will be always useful to know that for us to do our due diligence, but I would think CCC
by the time that’s introduced, would have a very strong idea on who the borrower is due to their G2G contracting structure. The financing structure, right, we would know by that time whether it’s sovereign or corporate or project financing, likely sovereign in this case. Then we have to find out if it is
early enough in the process or is available at an early stage in the project, the planned UK content, roughly, not line by line, but we would do some due diligence. We will cheque around with the UK supply chain that you mentioned to us, whether they are able to deliver it.
or this project. And then we will come back to you pretty quickly. If you’re in need of introductions to new UK supply chain to provide content to make the financing possible, we will also help out on that as well.
We would need the value and the currency of the contract, obviously, what is what is being contemplated, potential major stakeholders who are going to who are the borrower we’re going to use. Is there a different local party? This is more know your customer sort of consideration.
duration of the borrowing, obviously an indicative financing plan would be required, but happy to cover other questions on those. So I’m going to stop sharing my screen.
Play now, and then…
Yeah.

Wilson Pearce  
Great. I’ll, I’ll, I’ll, I’ll step in for a moment just because I know that there were some technical challenges on the on the call and I know how distracting that can be as an attendee. Well done, Oscar. You were not distracted as a presenter. I was, I was.

Ozgur Kutay
Great.

Wilson Pearce 
Maybe I’m going to recap a couple of things for the attendees by way of an elevator pitch before we go to the Q&A if that if that helps everyone. First of all thank you Oscar very much for the for the detailed presentation and we have seen questions in the in the chat around.

Ozgur Kutay 
Pleasure.

Wilson Pearce  
Accessing a copy of this later? Yes, I think that’s absolutely possible. We also look at this presentation, by the way, as a way of introducing everyone to the concept. We fully expect there to be some follow-up, both with ourselves and UKEF.
So we’d encourage that, but let me let me touch on a couple of things that we wanted, you know, to take advantage of this morning to present to you. First of all, the history, the history of this relationship was very much around anticipating.
Government procurement requirements where they were trying to de-risk, where the buyer is trying to de-risk their procurement and CCC coming in and providing AG2G performance guarantee is helpful, but it’s not the only part of the equation. As you all know, financing always comes up eventually, right? Nobody that.
That whole issue of price elasticity is not going to go away on us. So our ability to partner with UKF for transactions where you have extended your supply chain into the UK or you have a partnership in the UK.
Is a really unusual and interesting characteristic here that we thought we could take advantage of. So you’re no longer a Canadian on your own trying to get into a market. You’re actually partnering with a farm in in the UK and you’re able to leverage that because what we’re going to start seeing with the UK, with the European procurements and a lot of the other defense procurements.
By the way, we’re seeing this in Asia as well is a, you know, the term a capability coalition. You know that term you’re starting to see that, right, which is it’s a coalition of buyers and they actually feel comfortable with a coalition of suppliers as well in a manner of speaking. So our ability to partner with British firms.
Uh, reduces some of the supply chain risk and the delivery risk on the part of the buyers. So we think that’s a really interesting piece. And now having said that, another reason you want to be partnering with UK firms as you’re going forward in this is.
As Canadians, we’re not going to be aware of all of the EU procurement and IP rules in terms of compliance with those rules, right? So partnering with somebody who’s inside of that environment and knows that environment is always, always helpful. The G2G procurement mechanism is designed.
To respect procurement regulations of the buying entity of the buying jurisdiction. So our default position is we will respect that as part of as a member of the OECD, we will always respect those buying conditions, but having a local partner who understands them and can help you navigate them is helpful. So that’s it.
Interesting. So now, now that you’re, you know, let’s walk through a scenario, you’ve got a potential opportunity that you’re looking at.
You approach us as CCC because you think, you know what, maybe this is something that we can do as a G to G because the end, the end buyer is a government as Oscar was saying it’s going to be the Ministry of Defense or the police or a state agency in that in that area aerospace.
So it is a sale to a government department. Now they’re looking, now they’re entering into a discussion around financing. What’s attractive about the UKF experience is their ability to offer 100% financing on transactions. As you know, in a lot of transactions there’s lots of puts and takes on the math.
Not that it’s a slam dunk at 100%, Oscar, I don’t want to, I don’t want to oversell that for you, but I know that that ability to offer 100% financing and to look at multipliers has been a very attractive feature that we’ve seen as we’ve gone around the world and seen UKEP financing in action.
And as part of that, because you’re an ECA, your ability to provide that comfort to the banks, your ability to provide tenor that goes into a slightly longer term as you said into the 15 year term, those are all very attractive features. So we do see an opportunity.
Where if you started that contracting discussion with us, there may be a point at which we introduce you to UKF to indicate look guys from a financing standpoint to increase the attractiveness of the transaction you may want to you may want to engage with.
With UCAF as well and as Oscar was saying, the application process is a fairly straightforward application process within our world. For those of you who’ve worked with CCC, you know that we go through a step of qualifying you as an exporter and then qualifying the buyer.
And then merging those two and what we call a prospecting stage where you say, OK, the buyer and the seller think they’ve got a potential here that we can develop and turn into a formal proposal. Oh, hang on financing is part of that. That’s the point at which we would then look to provide that introduction to assist. So there.
There are a couple of things there that I think are of interest from a process standpoint. The other element that I think was interesting in the MOU that we signed with you kept back in the spring was the last point that Oscar made about an introduction to the supply chain partners in both cases.
One of the elements of that MOU because really it’s business as usual for both of us, we do contracts, you kept us financing, but that that that agreement that we will coordinate with each other to help make introductions to people either for UK firms looking for a Canadian partner to prime the contract or Canadian firms looking for a UK.
Partner with whom to deliver the contract. That’s another element that we’ve committed to in the MOU and we’re hoping to be able to provide some value to those of you who are looking at the markets. Having said that, I’ll stop there. My elevator pitch assumed we were in 110 story building, so I apologize for that.
I think if there’s any questions or constraints, I know, I know with the challenge on the technology that may have prevented some challenges, but.
Maybe I’ll ask Anu and Georgia if we’ve seen any questions in there that we need to consider or we’ll give you a minute for that.
Hang on.
I’m gonna open up the questions. I did just see a question there. Hang on.
Is there a minimum value? So good question. There is. It’s not a hard minimum, but for instance for CCC to engage, we have a fee structure that we charge for the GEG mechanism.
Um, and the minimum fee structure comes in at about $1,000,000, but really you wanna be close to the 10 Uh and upwards from there. Oscar, you may have a view as well in terms of when it makes sense to engage on ECA financing, but you know, we’d really encourage it to be a 10 and above. Uh.

Ozgur Kutay  
Hello.
Absolutely.

Wilson Pearce  
There are exceptions, but we were encouraged to be at least $10 million.

Ozgur Kutay  
But I should say, we’re talking about international financing, usually to a sovereign, and there would be a minimum that the banks would ask, right? And if it’s not a, we can’t find a bank for a minimum, then the
you know, it’s very hard to finance that. The other thing is that the countries, they may have their minimums in order to look into international financing, because it’s not, you know, local financing for them. They may require, may change from country to country. They may see a $50 million deal.
feasible as minimum, whereas some other country may see 10 million as a minimum. We would be flexible within the complexity of, you know, the borrower, whether they want to finance this or not, because that’s going to get into their international debt log.
you know, things of that nature, but also whether the banks, you know, the banks that work with us are and are willing to do it. The reason I’m saying that because of the documentation, despite the fact that Port Deal developed 30 million
We have our documentation negotiation in-house by UCAP. For the ones below, it’s left to the bank. But essentially, there’s a cost, there’s a fixed cost of this documentation negotiation. If it’s 1 million or 100 million or a billion, the legal costs wouldn’t change that much.
And so we had to be guided by what the market dictates.

Wilson Pearce  
Yeah, I think we’re both saying the same thing. There’s a scale economy here and you know, you kind of want to be up in the $10 million range before it really starts to attract attention. And then as you said, the buyers sometimes have their own criteria.
Matthew is asking a question about essentially the application of export control certificates. Yeah, that that process will always apply separately and independently of the of the financing discussions and.
You’re always encouraged to look into that and understand that. In fact, you know, we have, we have direct experience with a firm. Interestingly enough, it was a UK based firm that was assembling a product in Canada that was then being sold in in a in a market in Latin America.
Um, and the organizations didn’t appreciate the impact of the export control certificate, in this case coming from the UK. Uh, it was a timing issue, but as we all know, uh, the release of export control certificates are generally, certainly in the Canadian situation subject.

Ozgur Kutay  
That’s it.

Wilson Pearce 
To approval pretty much at the time of delivery almost right. It really moves along. So you do need to explore as to whether you’re going to be governed by export control conditions as well.

Ozgur Kutay  
Uh-huh.
Similar for us, the export licensing, if required for that particular project or product, is an integral part of the documentation. So we would start working on the financing. The commercial contract may be still in negotiation, right, until the final terms.
and the export licencing might be moving in parallel. So by the time we will avail our financing, we should be sure all other documentation, commercial or export licensing, under both or more countries sometimes. And I’ve been in a deal in a civilian satellite.
project earlier, which required, because it was Airbus, it required licencing from both UK and France. The equipment required both. And yeah, there was a timing mismatch, but yeah, we would wait until everything is cleared and then avail the financing. But that doesn’t mean that the work is in series. We wait for it and then
start the structuring of the transaction. Things can go in parallel at the stage that we are all comfortable, you know, as stakeholders, including our borrower, both agencies here, because CCC will be in that contract negotiations, so that, you know, there’s a…
There’s a high chance that you know that that would be export licences granted and from all the suppliers.

Wilson Pearce 
Yeah.
Perfect. Yeah. Yeah. Neither of us, neither UKEF nor CCC gives you a free pass on export control certificate or anything like that. Yeah, we still have to meet all those conditions. I see there’s a quick question on cybersecurity. Yes.

Ozgur Kutay  
Absolutely.

Wilson Pearce  
We have been involved in some discussions on cybersecurity. Interesting enough, the nature of those discussions are such that I can’t really share the details. But yes, cybersecurity projects are included and it is an area where Canadian companies are seen to have some expertise.

Ozgur Kutay  
Yeah.

Wilson Pearce  

In a case like that, I would encourage you to speak to, you know, if you want to connect with ourselves, we have account directors who will be assigned to you if you don’t already have an account director and they can they can help you with that.
And now I’ve got another question, a three-part question here from Parag. Can buyers be private entities? Buyers can be private entities. With CCC, we’re typically only involved when the buyer is a public sector buyer, when it’s a ministry.
So I, you know, there is the ability to provide AG to G service to a private entity, but it’s really a very, very uncommon practice on our part. So we’re really focused on selling to the ministry of so and so the nature of.
The, the, the nature of the security that we provide is much more relevant to the public sector buyer than it would be to a private sector buyer. And so I can speak to that only from a I’ll answer just from a contractual standpoint, Oscar. And then if there’s a financing piece, I’ll ask you to step in. So that’s the first part. Typically we’re selling only to public sector buyer.

Ozgur Kutay 
Right.

Wilson Pearce  
Can defence related infrastructure be considered? Yes, uh, absolutely. Um, we do a lot of infrastructure already. Uh, that’s one of the other larger practice areas for CCC. It’s ports, railways, highways, airports, that sort of thing. Uh.
So yeah, that kind of building is, is quite common for us and we’re familiar with it. And are there restrictions in terms of countries that can or not be considered for imports? Yes, yeah, the usual, the usual list of sort of no-fly zones for certain countries, whether that’s due to ITAR restrictions, whether that’s due to export.
Control certificates. We can usually give you an early read on that and we’ll typically coordinate with our colleagues at Global Affairs Canada to say, look, you know, we’ll do a quick geopolitical check. You know, we’re looking at speaking to Country X.
What are your thoughts on selling defense products or aerospace products there? And they’ll come back. You know, obviously we won’t sell to countries where there are embargoes and things like that.
Yeah, go ahead. I’m not sure.

Ozgur Kutay  

I would echo that really. As I said, the export licencing is an integral part of all the documentation, in this case for both countries to be satisfied before the loan disbursement. So we will obviously do the initial checks, right? I mean, we would assume that this is a deal, this is a project that the export licences can be obtained.

Wilson Pearce 
OK.

Ozgur Kutay  
So kind of pretty clear that obviously everything is going to have to take a while, but the assumption in the beginning that there’s a reasonable comfort that this will be granted. The other restriction could be, despite there is no export licencing restriction from both countries, we may not appetite.
They might not have appetite for a country credit appetite, right? So it’s always good, and this has been the case so far, and my friend Josh just added a link our international appetite that is that is public news, so you can really go in.

Wilson Pearce  
You.

Ozgur Kutay  
and cheque yourselves. It’s alphabetical order country by country. It’s on the Gov UK website. And if that country we have appetite, then happy to have a discussion. If it says, you know, case by case or call us, then we can still have a discussion, but it’s less likely that we will be able to do that.
Um, yeah.

Wilson Pearce  
Right.

Ozgur Kutay  
Maybe I should briefly just introduce, if Josh, if you can come to camera, because Josh Edwards actually co-heads, is the deputy head of our defence and space team. And that would be very good to have a facial sort of an introduction. And Josh, anything I missed in between?
Please, please feel free to fill in.

Joshua Edwards  

No, I think you covered everything. Good morning. Was it just tipping over to the afternoon in where you guys are? Yeah, lovely to be part of the session. Please do circulate my contact details if you have any defence related inquiries. Happy to have those further discussions. But just to echo some of Oscar’s comments, there is increased flexibility.
You know, we like to think we’re at the leading edge of that flexibility within UK export finance. So seek us out and have that conversation. We’re pleased to have it.

Wilson Pearce 
Super. Thanks, Josh. And I see one last question as we’re getting close to the to the end here the.
The environmental services question that I see Angela, Angela that is you’re asking if it’s a general, you know where do I go, who do I talk to? Usually that’s the Trade Commission service. Our suggestion is typically the Trade Commission service helps you with some of the introductions.
And then as you narrow it down and you realize you’ve got a government buyer and they might be looking for this kind of security that comes from a G to G, that’s where you then come back to us. And we have a different program for selling to the US than we do for rest of world as well by the way, but.
I’d invite you to circle back to us with a more detailed discussion on that particular one. Dual use. Are there populated dual use tech, healthcare, SAR, the military? Yes. Short answer is yes. Oh, Debbie, you’re asking that question. Sorry, Debbie.
Yes, Debbie with the with the United Kingdom, sorry, yes, there’s some. In fact we’ve developed a capabilities guide which we’re working on and which we’re working on sharing with UCAF that actually profiles Canadian companies in these sectors who have those kind of.
Dual use capabilities and it’s quite interesting actually that the healthcare, the firefighting, a couple of those solutions are absolute, you know, absolutely transferable across sectors.
Um, I’m. I’m looking. Thanks, Daddy. Um.
I think it is noon. I know we’re scheduled to wrap up here. There we are. OK, Georgia’s right on top of things here. She’s put a note in here. So I guess what I’m going to assume, Georgia, is that you’ll, yeah, contact us at Canadian Commerce Corporation for general questions and then we’ll be providing the deck.
Uh, for UCAF as well. I think that’s, you know, thank you very much everyone for your attendance. Our apologies for sort of an unusual mixed technical environment on this particular one. We’ll sort that one out going forward, but.
Again, thanks so much. And Oscar, if you’ve got any closing thoughts, I just, I really appreciated your time guys. It’s we’re looking forward to working with you.

Ozgur Kutay  
Exactly. I appreciate the time and the devotion really by CCC to organise this and everybody in the audience. We’re here to help. We’re very flexible, as mentioned, you know, to come up with a sort of a mix that would enable both countries to excel.
and be successful in these contracts that you would face. CCC would lead on the contracting side and will be happy to provide financing solutions for you and for your client. And thank you. We will circulate the deck. We will add our contact details both here in London.

Wilson Pearce  
Perfect.

Ozgur Kutay  
so that you can reach us as well. Thank you.

Wilson Pearce  
Fantastic. All right. Again, thanks so much, everyone. Really appreciate it. Everyone did. Cheers.

Ozgur Kutay  
Bye-bye. Have a great rest of the day.