Coface North America Socrates 05 26 2010

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Your trade risks, under control.

Coface North AmericaCoface North America

ocrates Jaen

Coface North America

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Founded in France in 1946; international expansion in 1990s

Subsidiary of Natixis

Rated: A+ by Fitch

A2 by Moody’s

A by S&P

Coface: Worldwide Trade Facilitator

Coface facilitates business-to-business commerce Coface facilitates business-to-business commerce worldwide, offering solutions to all companies – whatever worldwide, offering solutions to all companies – whatever their size, nationality, or business sector – for managing, their size, nationality, or business sector – for managing,

protecting, and financing their accounts receivable.protecting, and financing their accounts receivable.

Coface overviewCoface overview Trade Receivables Protection Corporate ratings & Information Trade Receivables Management Trade Receivables Finance

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Coface Group Key Figures


Amounts in millions of euros 2007 2008

Consolidated turnover 1,571 1,682

Insurance 1,111 1,166

Services 250 270

Factoring 210 245

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Global Presence

Canada

USA

Mexico

Peru

Venezuela

Argentina

Brazil

Chile

Panama

Ecuador

Costa Rica

Colombia

Lebanon

Uruguay

Paraguay

Benin

Algeria

Burkina Faso

Cameroon

Mali

Côte d’Ivoire

Togo

Senegal

South Africa

Egypt

Morocco Tunisia

Chad

Russia

PortugalSpain

AustriaBelgiumDenmark

Norway

Netherlands

CroatiaBulgaria

PolandRomaniaFrance

ItalyIreland

Germany

Sweden

UKSwitzerland

Latvia

Estonia

Hungary Lithuania

Turkey

UkraineSlovenia

Czech Rep.

Serbia

Brunei

Djibouti

Luxembourg

Pakistan

Vietnam

Indonesia

Greece

Liechtenstein

Malta

Bangladesh

Finland

KazakhstanCyprus

Australia

New Zealand

Japan

South KoreaChina

India

Malaysia

Thailand Philippines

Singapore

Hong KongTaiwan

Saudi Arabia

IsraelIran

U.A.E.

Bahrain

JordanSyria

Kuwait

Libya

Oman

Qatar

Yemen

Subsidiaries or branches in 67 countries

CreditAlliance partners in 32 add’l countries

Total networkTotal network

9999 countries countries

Slovakia

Sudan

Mauritania


Viet Nam

Gabon

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Business Lines

Coface delivers tools that enhance and support a company’s

credit management practices:

Accounts receivable protectionExport and domestic credit insuranceSingle risk guarantees

Corporate ratings and information

Accounts receivable management and debt collection

Accounts receivable finance (factoring)


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Coface in North America - History

20022002 20042004 20052005 20062006 20072007

Coface takes on equity stake in credit reporting agencies, Veritas Group and Justicia

CNA Credit becomes member of Coface CreditAlliance; Joint venture for Coface to provide export credit coverage to CNA Credit policyholders

Coface acquires Kompass Canada franchise

1990’s1990’s

Coface purchases CNA Credit in North America, becomes managing general underwriter for CNA

Coface acquires Kompass USA franchise

Coface North America Insurance Company created

Coface SA – Canada Branch office launched

Export Development Canada (EDC) names Coface as domestic credit insurance provider for its insurance program

Coface Collections North America acquires one of the largest US commercial collection agencies, Newton & Associates

Coface Canada expanded to include all 4 Coface business lines


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Coface in North America – Commercial Locations

MidwesternRegion

WesternRegion

SouthernRegion

Mid-Atlantic& E. Canada

RegionNew England

Region

Regional Head Office Regional Branch Office


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Trade ReceivablesTrade Receivables

ProtectionProtection

Coface overview Trade Receivables ProtectionTrade Receivables Protection Corporate ratings & Information Trade Receivables Management Trade Receivables Finance

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Credit Insurance

Credit Insurance flowchartCredit Insurance flowchart

What is Credit Insurance?What is Credit Insurance?

A credit insurance policy ensures that a policyholder will be paid for goods or services sold to its customers

The policy insures commercial accounts receivables against non-payment


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Credit Insurance

Benefits of Credit InsuranceBenefits of Credit Insurance

Protection against bad debt loss

Potential to increase sales

Better borrowing position with insured receivables

Credit information resource

Collection services


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In depth knowledge of local conditions in emerging countriesIn depth knowledge of local conditions in emerging countries

Maximum 5 years, no minimumMaximum 5 years, no minimum

$1 million to $50 million capacity$1 million to $50 million capacity

Single Risk / Political Risk Insurance

Covers cross-border operations and transactions against loss caused by political events

Coverage include protection against financial loss of an investment due to:

- expropriation or nationalization

- contract termination by a foreign government

- non-payment of accounts receivable due to war or civil unrest

Coface also offers coverage of select single debtor transactions

No countries excluded ‘de facto’No countries excluded ‘de facto’

FeaturesFeatures


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Credit Insurance Underwriting Process

Obtaining the financials of your clients, with your help and/or via our Infoline department

Global analysis of the risks via our tools (@rating, database, International network…)

Credit opinions over your requests on each buyers/clients. Expertise in all countries to provide a rapid answer: agreement or set limit

Provide you with a complete insurance covering your transactions worldwide or on your domestic market


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CORPORATE RATINGS CORPORATE RATINGS AND INFORMATIONAND INFORMATION

Coface overview Trade Receivables Protection Corporate ratings & InformationCorporate ratings & Information Trade Receivables Management Trade Receivables Finance

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Corporate Ratings and Information

Company information (reports and ratings)Company information (reports and ratings)

International credit reports from 200 countries and territories

@rating Credit Opinions for quick online indication of creditworthiness

Kompass marketing dataKompass marketing dataGlobal buyer and seller database

Advertise your company and find suppliers

Country and Sector Risk RatingsCountry and Sector Risk Ratings

Country @ratings measure how financial engagements are influenced by the economic, financial and political outlook of the country

Sector @ratings measure the average level of default risk posed by companies in individual sectors


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The @rating Solution

@rating is a unique, worldwide system of company ratings allowing credit managers to rapidly and reliably assess credit risks.

Available for 50 million companies worldwide, @rating draws on Coface’s twofold expertise in company information and credit insurance.

@ratings express recommended credit exposures on individual companies in a simple manner, with @ representing a $20,000 limit, @@ $50,000, @@@ $100,000, etc.

@ratings can be delivered as part of a credit insurance policy (@rating limits) or as an information-only service (@rating Credit Opinions).


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The @rating Solution

What goes into an ?

Company analysisCompany analysis Annual reportsAnnual reports

Bank reportsBank reports

Commercial reportsCommercial reports

Published reportsPublished reports

Economic analysisEconomic analysis

Policy-holderPolicy-holder

Credit Information ManagerCredit Information Manager

Direct Information from debtorDirect Information from debtor

Payment irregularitiesPayment irregularities

Notification exceeded credit periodNotification exceeded credit period

CreditAllianceCreditAlliance

UUNNDDEERRWWRRIITTIINNGG

@rating opinion@rating opinion


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Country and Sector Risk Ratings

Macroeconomic expertise

Country Risk RatingCountry Risk Rating Sector Risk RatingSector Risk Rating

The country risk @rating assesses the average risk of payment default by companies in a given country

There are seven different rating grades: A1 to A4, B, C, D

The ratings are regularly updated for over 155 countries

3 risk families:Economic, Financial & Political ProspectsGrowth vulnerabilitySovereign financial vulnerability External over indebtednessForeign currency liquidity crisis Banking sector’s fragilities Geopolitical and Governance vulnerabilities

Company’s payment behavior

Business Climate

The sector risk @rating assesses the average risk of payment default by companies in a given sector

To calculate sector @rating, Coface combines 3 types of measurements: Economic prospects of the sector Companies’ financial situation Coface payment experience

There are 10 different rating grades: ranging from A+ for the lowest risks to D for the highest risks

The ratings are regularly updated for 15 economic sectors

www.coface-usa.comRatings, payment incident index and sector risk assessment are available on


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Trade Receivables Trade Receivables ManagementManagement

Coface overview Trade Receivables Protection Corporate ratings & Information Trade Receivables ManagementTrade Receivables Management Trade Receivables Finance

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Receivables Management and Collection

Coface Collections North America, Inc. (CCNA) offer comprehensive, flexible, collection services in the US and abroad.

CCNA main office is located in Metairie, LA

Branch offices in: Vancouver, WAEast Windsor, NJDenver, CO

Coface has the largest international collections network in the Coface has the largest international collections network in the world in terms of geographical presence.world in terms of geographical presence.


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Receivables Management and Collections

A full-service commercial debt recovery by credit professionals

The I.N.C. approach to commercial debt recovery:

InvestigationWe employ sophisticated investigative resources to gather and analyze information in order to achieve optimal results.

NegotiationThe financial information and other pertinent facts that we gather enable our collectors to negotiate from a position of strength.

CollectionOur approach combines state-of-the-art technology and resources with expertise, experience and finesse


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Receivables Management and Investigation Services

In addition to our professional collection services, we also provide:

C.A.R.E.: Coface Accounts Receivable ExpressLow-cost, automated online collection service for early past-dues

Accounts Receivable Management Outsourcing

Investigation ServicesReal estate Broker Price Opinions (BPOs)Asset and liability investigationsBackground checksCollateral property valuation


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Trade Receivables Trade Receivables

FinanceFinance

Coface overview Trade Receivables Protection Corporate ratings & Information Trade Receivables Management Trade Receivables FinanceTrade Receivables Finance

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Receivables Finance and Factoring

Our mission is to help our clients Our mission is to help our clients meet their business objectives and meet their business objectives and grow their companiesgrow their companies

Coface Credit Management North America, Inc.Coface Credit Management North America, Inc.


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Receivables Financing Provides Many Benefits

Protection from bad debt lossesWe will determine the creditworthiness of your customersCoface assumes the risk of non-payment due to insolvency

Professional collections departmentWe handle the credit and debt collection functions

Streamlined operations and managementReceivables financing reduces your need for a credit and collections

departmentOnline management system

Build your credit ratingFactoring will help you pay your suppliers on time and improve your credit

rating


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How does it work?

Coface systematically purchases the qualified receivables

Any credit risk will be borne by Coface

The amount and type of receivables that are financed are used to determine the financing rate of the company

When you open your factoring account, we will notify your When you open your factoring account, we will notify your customers to submit payments to us on your behalf. customers to submit payments to us on your behalf.

We will treat your customer with the same degree of We will treat your customer with the same degree of integrity and professionalism that you provide. integrity and professionalism that you provide.

Your Coface account executive will be in continual contact Your Coface account executive will be in continual contact with you. with you.

Account activity can be managed by you through our Account activity can be managed by you through our online system.online system.


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Scenario 1– Product: EXPORT CREDIT INSURANCE– 2007 sales $907,000 – 2008 sales $1,000,000– 2009 sales $ 1,900,000 YTD (was able to offer credit term,

add new accounts (Caribbean, L/A) thus increasing sales)

Scenario 2: – Product: Domestic Factoring– 2009 Starting sales $1,500,000 (02/01/2009)– YTD revenue $3,000,000 (season over) – 80% advance – Commission 1.5% – Advance rate of Libor plus 4.5%– Monthly Minimum $1,000.00

110% Sales Growth in 2 years

100% Sales Growth in 9 Months

We Help You Make Dramatic Changes in Revenue

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Client: Distribute Sheet Music and related Media Products– 2004 sales $55,803,390 Credit losses $125,859.79– 2005 sales $54,683,587 Credit losses $23,902.05– 2006 sales $51,696,050 Credit losses $517,000.00

* 3 Yr Average Bad Debt Expense $223k, 0.41% of sales

In 2007 Company enters into a global credit insurance program with Coface– (2007- 2008) Sales $57,000,000 Credit Losses $30,000.00– (2008-2009) Sales $60,000,000 Credit Losses reported 2008

($50,000.00)

* 2 Yr Average Bad Debt Expense $40,000k, 0.07% of sales

We Can Help You Reduce Bad Debt

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Help businesses double or triple in size.

Protect clients from hundreds of thousands of dollars in potential losses.

I can provide an unlimited supply of capital.

Represent a global financial services group that counts 45% of the worlds 500 largest companies as clients

Working with me allows you to tap into a group that makes 15,000 credit decision per day and manages $500 Billion of global trade.

Quantifiable Reasons to Business with Me

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Thank youThank youSocrates H. JaenExclusive Agent for Coface North AmericaLic. No. CA. 0789553Lic. No. NV. 525120Lic. No. MT. 700306L.B. Spurrier Insurance Agency Inc.333 S. Anita Drive, Suite 850Orange, CA 92868714-460-2635 Office| 714-460-2644 Fax| 909- 904-8233 [email protected] | www.Coface-usa.com

Your Trade Risks, Under Control: Accounts Receivable Insurance | Business Information | Factoring | Commercial Collections

Economy & Finance

Coface North America Socrates 05 26 2010