SEK was appointed by the Swedish government to administer the Swedish CIRR system in 1978.
CIRR stands for commercial interest reference rate and is based on an arrangement agreed by OECD member states. This arrangement, called the "consensus agreement", provides guidelines for the export of capital goods and services. Deficits that might emanate from the CIRR system are absorbed by the government and the phrase "governmentsupported interest rate" is consequently sometimes used. Financing is granted in accordance with the consensus agreement guidelineswith regard to credit tenors, advance payments and interest rates.
CIRR rates can be offered by SEK to finance Swedish exports if it can be assumed that a competing foreign exporter could offer preferential terms because of foreign government support and that such preferential terms are necessary for the export transaction to go ahead.
Swedish government guidelines also require certain conditions for EKN guarantee coverage to have been fulfilled. However, a credit that qualifies for a guarantee from EKN will automatically benefit from a CIRR rate (and vice versa).
Applications for CIRR rates are usually sent directly to SEK. Both banks and exporters may apply.
If the applicant does not wish to disclose information about the underlying transaction to SEK, the application can be sent to EKN instead. EKN will send a limited part of the document to SEK for SEK's decision on the transaction.
Applications for CIRR rates should be sent to SEK before the date for the signing of the commercial contract. Where relevant, SEK will determine the applicable CIRR rate. SEK will offer a market rate*) if the commercial contract is signed before the date of application.
*SEK's market rateSEK Export Finance can provide indications of market rates by telephone.
SEK has a standard application form.
Click here for the application form
SEK finances transactions that directly or indirectly relate to the export of capital goods and services and that are carried out by a Swedish company or by a company domicieled abroad with considerable Swedish interests. Such interests exist if the activity to be financed by the CIRR-credit is considered to be of Swedish national interest or otherwise benefits economic development in Sweden. In order for SEK to decide whether the Swedish interest is sufficient, an application for CIRR financing must be accompanied by a description of the positive impact on Sweden resulting from the contract if the Swedish content is less than 50%. This description must be provided by the exporter.
Spare parts are financed only up to an amount specified by EKN – usually at 1-15% in connection with capital goods but never on a stand alone basis.
CIRR rates for used goods are granted only in exceptional cases, mainly following EKN's decision.
Certain local costs, e.g. locally purchased services, can be financed at a CIRR rate provided that there is a clear connection to Swedish exports. Local costs cannot exceed 30% of the export contract value. SEK will offer a market rate for any part not qualifying for CIRR rate.
Importing countries are divided into Category I and Category II countries. This categorization is based on the World Bank's categorization of GDP in the respective country i.e. higher GDP = Category I, lower GDP = Category II.
CIRR rates are available for all currencies of the countries participating in the consensus agreement and SEK publishes the CIRR rates for the currencies offered by SEK. CIRR rates are adjusted on the 15th of every month. SEK will always offer a market rate as an alternative when offering a CIRR rate.
Click here to see CIRR rates
Click here to see SEK's interest rate alternatives
When applying, applicants must choose between Offer CIRR and Contract CIRR.
Offer CIRR is the right choice if the applicant wishes to have a specific interest rate at the time of applying. SEK's offer is valid for 120 days. The CIRR rate carries a surcharge of 0.2 percentage points as compared to the CIRR rates published on SEK's home page.
The Contract CIRR is chosen if the applicant wishes to have the rate prevailing at the date of signing of the commercial contract (without a surcharge of 0.2 percentage points). This offer is also valid for 120 days but does not constitute a commitment of a specific interest rate.
When an offer is extended it is possible to opt between Offer CIRR and Contract CIRR or vice versa. If the commercial contract has not been signed within the said 120-day period, it is possible to have the offer further extended for consecutive 120-day period, for the Offer CIRR, at the rate applicable at the time that the offer is extended.
For supplier's credits, the interest rate is fixed when the commercial contract is signed. For buyer's credits, the interest rate offered, the Contract or Offer rate, will be committed for a further six month period calculated from the date that the commercial contract is signed. A new CIRR rate will be applied if the credit agreement is not signed within this period. The higher of the prevailing CIRR rate and the CIRR rate contained in SEK's offer will be applied.
SEK is only committed to its CIRR rate offer if the offer is accepted in conjunction with the signing of the commercial contract (supplier's credit) or credit agreement (buyer's credit), normally within one month.
The credit will normally be repaid in equal installments every six months.
Exceptions from this rule may be considered.
Six month annuities are allowed for leasing transactions.
The tenor is counted from the "starting point" (see below) and depends on the type of goods, contract amount, importing country etc.
The shortest tenor that can be considered is two years.
The maximum tenor for the respective country category is:
Category I – normally five yearsCategory II – normally 10 years
The "starting point" for the tenor is set out below.
At least 15% of the contract value should be paid in advance. All payments made before the "starting point" are considered as advance payments.
Advance payments cannot be financed at a CIRR rate and must be financed at a market rate. Financing of advance payments can be arranged at a market rate and must be documented in a separate credit agreement.
SEK has no formal limit. Amounts below Skr 10 million are rarely seen owing to the impact of the cost of arranging the credit.
It is possible to finance EKN premiums , bank fees and interest during the credit period by increasing the credit amount.
Click here to see which CIRR rate currencies are offered by SEK
The exporter's ownership in the importing company (or vice versa), directly or indirectly, may not exceed 20%. It is, however, possible for SEK to offer a CIRR rate where joint ownership exceeds 20% under certain conditions.
SEK will decide on a case-by-case basis whether an exception can be granted. In order to make such a decision it is necessary to know the on-selling conditions of the goods. If, for example, a Swedish subsidiary abroad acts only as an agent for the Swedish production company and is therefore just a link between the Swedish exporting company and the end user of the goods, this might qualify for a CIRR rate.
Buyer's credit: acceptance within one month of signing the credit agreement.
Supplier's credit: acceptance within one month of signing the commercial contract.
A market rate can, however, be accepted at any time during the credit period. The market rate is determined at the date of acceptance.
The arranging bank receives remuneration of 0.25% p.a. on the outstanding capital amount to cover costs for arranging and handling the credit. Remuneration is paid upon receipt of each interest payment from the borrower.There is no commitment fee charged for CIRR rate credits. A risk premium is charged for the part of the credit which is not guaranteed by EKN.
The Swedish government does not pay any remuneration to SEK for its administration of the CIRR system. SEK enjoys a margin of 0.25% p.a. which is included in the CIRR rate. SEK’s general terms and conditions therefore include provisions stating that all costs for the arrangement, enforcement and cancellation of the credit are for account of the applicant should the borrower or other party not be responsible for the payment of such costs.
The starting point is the point from which the repayment period is calculated. The starting point is calculated as follows, following international practice:
In all cases, a latest date must be set for the commencement of the repayments.
SEK requires collateral as security for its lending. Such security is often in the form of a guarantee issued by the Swedish Export Credits Guarantee Board (EKN) or a guarantee from a bank/exporter approved by SEK.
SEK may, in certain cases, assume some of the credit risk.
If you have any queries or would just like to learn more about SEK's financing schemes and conditions, please contact our Export Finance department or your bank, which will put you in touch with SEK. You can call us on +46 8 613 83 00 or e-mail us at firstname.lastname@example.org.
The CIRR rules are subject to constant updates/changes. Therefore please always consult us or your bank for each specific transaction.
Swedish Export Credit Corporation (publ) Klarabergsviadukten 61 - 63 P.O. Box 194 SE-101 23 Stockholm, Phone:+46 8 613 83 00 Email: email@example.com Org. No. 556084-0315