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PURPOSE
The program offers fixed-rate loans directly to foreign
buyers of U.S.
goods and services to help U.S. exporters compete against
foreign
suppliers offering officially supported export credits
and to fill in gaps in
the availability of private export financing.
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PROGRAM
DESCRIPTION
The program will consider extending to a company's
foreign customer a fixed-rate loan covering up to 85 percent of the
U.S. export value. The buyer must make cash payment to the U.S.
exporter of at least 15 percent of the U.S. export value. At the
preliminary stage, the Program frequently offers the option of
guarantee support or a direct loan. Top
FINANCING TERMS
1- Cash Payment
The Program requires that the buyer make cash
payment
to the exporter equal to at least 15 percent of the
U.S.
export value. The cash payment may be paid in a
lump
sum before disbursement of the financing, or it may
be
paid in installments equal to at least 15 percent
of the
value of each completed shipment and related
disbursement under the contract. The alternative
selected
is negotiated between the buyer and seller.
2- Coverage
The Program will consider
extending a loan to the foreign
borrower covering up to 85 percent of the U.S.
export
value.
3- Repayment
Repayment terms on
transactions supported by direct
loans normally range from five to ten years,
depending on
the export value, the product or project being
financed, the
importing country and the terms offered by
officially
supported competitors. The maximum repayment term
is
five years for relatively rich countries and ten
years for
relatively poor countries. Exceptions exist to
these
general guidelines by agreement among the OECD
countries. Payments are usually made in semiannual
installments, on the 15th of the month, beginning
six
months after final delivery, the mid-point of
deliveries or
completion of the project, whichever is
appropriate.
4- Interest Rates
Interest rates on direct
loans are fixed for the life of the
loan at the time of the Program's Final Commitment.
Interest is payable on the installment dates on
outstanding balances. The Program charges the
minimum
OECD rate applicable to the category of the
importing
country and the repayment period.
5- Fees
Processing fee. A $100
processing fee must accompany
each new application and each application for a
Final
Commitment that is not a conversion. The fees
described
below are not incurred until the Program authorizes
a
Final Commitment.
5.1- Commitment fee.
The Program charges the borrower a
commitment fee of
one-half of one percent per annum on the
undisbursed balance of
a direct loan. This fee begins to accrue 60 days
after the
Program's Final Commitment for the loan.
5.2- Exposure fee.
The Program charges a
front-end exposure fee, assessed
on each disbursement of a direct loan. The fee may
be
financed by the Program. The parties to the
transaction,
other than the Program but including the borrower
or
exporter, must determine who will be obligated to
pay the
exposure fee to the Program and must notify the
Program
of such determination at the time of application
for a final
commitment. The Program does not charge for legal
services when loan documents are prepared by the
Program staff. In complex cases in which the
Program
decides that it needs the assistance of outside
counsel in
the preparation of loan documents, the Program will
require the borrower to pay the legal fees
incurred. Top
ELIGIBLE
EXPORT PRODUCTS
Capital equipment, large-scale projects, and related services are
eligible for direct loan financing. The Program direct loans generally
involve loan amounts over $10 million or a repayment term of five or
more years. Transactions involving loan amounts of $10 million or less
are ordinarily financed by a domestic financing institution or third
party, and the Program support takes the form of a guarantee. Top
ELIGIBLE
BORROWERS
The borrower must be a creditworthy entity in a country eligible
for the Program assistance. The borrower may be an entity other than
the buyer. Generally, on government or government-sponsored projects,
the Program looks for a host government guarantee. Private sector
borrowers may be considered on their own merits or may offer a
creditworthy Program as a guarantor. The Program will also consider
doing project finance where the risk of the project is taken.
Applicant's exporters should consult with the Program about any
special conditions that may apply to the importing country. Top
DOCUMENTATION
& UTILIZATIONS
The loan agreement sets forth transaction-specific provisions, as
well as standard the program terms and conditions which are not
subject to negotiation. When the program extends a direct loan to a
borrower, the program enters into a loan agreement with the borrower
and requests the issuance of a promissory note by the borrower. The
utilization procedures are detailed in an annex to the loan agreement.
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ELIGIBLE
COUNTRIES
Contact us to verify eligibility
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FINANCE FEES
1- Application Fees
- $100 nonrefundable for all
applications including renewals
- Not required for conversion of
LI's or PC's or limited
recourse project financing (PC Fees = 1/10 of
1% up to
$25,000 cap).
2- Commitment Fees
Loan
1/2% per annum
Guarantee
1/8%
per annum
1/16% flat
Payable semiannually on the interest payment date
3-
Exposure Fees
Varies
dependent upon:
1- Borrower: Public or
Private
2- Country
3- Re-payment terms
4- Percentage of cover
5- Financing product offered
6- Drawndawn period
7- Timing and payment of
exposure fee payment Top
CONDITIONS
Certain conditions (in addition to the conditions precedent to the
availability of
the loan) set forth in the loan agreement may have an effect upon the
sales contract between the exporter and the buyer (foreign borrower).
The exporter should discuss these conditions with the buyer during the
negotiation of the sales contract:
1-
Supplier's Certificate.
The program requires a certification from the exporter (1) stating
that the goods and services being financed are of U.S. origin or
manufacture.
2-
Transportation.
Exports financed under a direct loan that are transported by ocean
vessel must be shipped in vessels of U.S. registry, unless the foreign
buyer obtains a waiver of this requirement from the U.S Maritime
Administration. Borrowers are to address waiver requests to the
Director, Office of Market Development, Ocean freight or airfreight
costs for goods shipped on vessels or aircraft of non-U.S. registry
are considered foreign costs, even if (in the case of ocean shipments)
the borrower has obtained a Maritime Administration waiver.
3-
Insurance.
The borrower is required to obtain insurance against marine and
transit hazards on all shipments of items financed by the program.
U.S. insurers should be given a nondiscriminatory opportunity to bid
for such insurance business. Premiums for hazard insurance paid to
U.S. insurance companies are eligible for the program financing.
4-
Progress payments.
To be eligible for the program financing, progress payments must be
payable over the product manufacturing period or the project
construction period, according to a purchase contract approved by the
program. The Contract must provide for progress payments at times and
in amounts that have a reasonable relationship, in the program's
judgment, to amounts expended by the U.S. supplier. Top
REPAYMENT TERMS
Typical short and medium term repayment maximum:
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MINIMUM
CONTRACT VALUE
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RE-PAYMENT
TERMS
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$80,000-$174,900
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3
YEARS
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$175,000
- $349,999
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4
YEARS
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$350,000
AND ABOVE
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5
YEARS +
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Medium-and
long-term repayment schedules are dependent upon transaction type,
export items, useful life, amount, site location (country) and
financial requirement. Top
CURRENT
INTEREST RATE
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April 15, 2002 -
May 14, 2002
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Repayment
Period
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Ex-Im
Bank Lending Rate
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CIRR
Rate
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Up to 10 semi-annuals
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3-year Treasury
Rate + 1%
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5.14%
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Over 10 up to 17
semi-annuals
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5-year Treasury
Rate + 1%
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5.74%
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Over 17
semi-annuals
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7-year Treasury
Rate + 1%
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6.14%
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