Co-Financing "One-Stop-Shop"

To facilitate financing with other export credit agencies (ECAs), Ex-Im Bank is actively establishing "One-Stop-Shop" co-financing facilities. "One-Stop-Shop" arrangements allow products and services from two (or more) countries to benefit from a single ECA financing package. Without co-financing, the parties would have to make separate financing arrangements with two (or more) ECAs to ensure support for exports from various countries. The country with the largest share of the sourcing and/or the location of the main contractor will generally determine which ECA leads the transaction.

The lead ECA will provide export credit support for the entire transaction and will arrange for support from the follower ECA behind the scenes. As a result, the lead ECA is able to provide one set of documents, one set of terms and conditions, and one set of disbursement and claims procedures for the entire transaction. The buyer will benefit from the ease of a streamlined financing package as the involvement of the follower ECA should be invisible to the buyer.

Ex-Im Bank as the Lead ECA

As the lead ECA, Ex-Im Bank will provide its standard cover for the entire transaction under its guarantee or insurance program. Ex-Im Bank will seek a separate financial commitment (e.g., reinsurance) from the follower ECA for the value of the exports to be covered by it. Ex-Im Bank will require use of its standard credit and insurance/guarantee documentation, appropriately modified. Certain Ex-Im Bank policies, such as U.S. vessel shipping requirements, would not apply to the follower ECA supported portion. In the case of economic impact and environmental reviews, however, Ex-Im Bank will continue to evaluate the entire project to ensure compliance with statutory and policy requirements.

Ex-Im Bank as the Follower ECA

As the follower ECA, Ex-Im Bank will provide a commitment to the lead ECA for the U.S. portion. Prior to Ex-Im Bank approval of the transaction, the U.S. exporter will be required to complete and submit a Co-financing Certificate to Ex-Im Bank which will provide U.S. content information and confirm compliance with statutory and policy requirements. The lead ECA will be responsible for documenting the transaction and administering disbursements using its standard procedures. Ex-Im Bank will require, however, compliance with U.S. vessel shipping requirements (MARAD) with respect to the U.S. exports. The U.S. exporter will be required to submit a revised Co-financing Certificate to Ex-Im Bank if there are material changes to U.S. content or to the other certifications.

[Note: To date, Ex-Im Bank has had limited experience as a Follower ECA.]

Co-financing Agreements with other ECAs

Ex-Im Bank currently has a bilateral agreement with ASHR’A (Israel), Atradius (The Netherlands), Coface (France), ECGD (U.K.), EDC (Canada), EFIC (Australia), EKF (Denmark), Euler Hermes (Germany), NEXI (Japan)¹ and SACE (Italy) and is in discussions with other ECAs to sign additional bilateral agreements. Ex-Im Bank will consider co-financing transactions without a formal bilateral agreement on a case-by-case basis. In fact, Ex-Im Bank has concluded a number of one off co-financing arrangements with GIEK (Norway), H-EXIM (Hungary) and ONDD (Belgium).  Ex-Im Bank reserves the right to decide case-by-case whether to structure deals as co-financing transactions.

Co-financing Associated Contracts – Revised as of February 1, 2011

Where Ex-Im Bank is the lead Export Credit Agency, the co-financed amounts are expected, in the ordinary course, to be provided by (a) the U.S. Exporter sourced through a subcontract (single export contract), or (b) a subsidiary or affiliate of the U.S. Exporter (multiple export contracts – related companies).

Ex-Im Bank will consider co-finance coverage of “Associated Contracts” for exports provided by non-U.S. companies under a separate export contract (“Non-U.S. Exporter”) under a co-financing structure, if the exports are part of an integrated system with the following characteristics:

  1. U.S. Exporter has the Leading Role. The leading role would be evidenced by involvement by the U.S. exporter in (a) the project planning, management and coordination2 of the U.S. and co-financed project elements and (b) in the application for or use of co-financing. The U.S. should have the largest share of the financing; and
     
  2. Competitive Benefit to U.S. Exporter. Ability to offer single financing package was necessary to allow the U.S. Exporter to win the export contract (U.S. Exporter benefit). (Ineligible: where the primary beneficiary of co-financing is the borrower, lender and/or Non-U.S. Exporter, not the U.S. Exporter); and
     
  3. Single Project. A distinct and integrated project (e.g., combined cycle power project); and
     
  4. Legal Compliance - Certifications. Confirmation from each U.S. Exporters and the non-U.S. Exporters that it is willing to provide appropriate exporter certifications to Ex-Im Bank.
     
    1. With respect to each U.S. Exporter, inclusion of the co-financed exports sold by the U.S. exporter, its affiliates or subsidiaries, if any, in the Exporter's Certificate and agreement by the U.S. Exporter to notify Ex-Im Bank of material changes (i.e., change in co-financed amount exceeding 5%) relating to such co-financed exports.
       
    2. With respect to each non-U.S. exporter, certifications analogous to those provided by the U.S. Exporter in the Ex-Im Bank Exporter's Certificate, including content and compliance with applicable anti-bribery laws.

Ex-Im Bank's Policy & Planning Division will continue to monitor the Associate Contracts coverage as part of its review of overall content flexibilities.

 

Co-Financing Frequently Asked Questions

What are "one-stop-shop" co-financing arrangements?

  • "One-stop-shop" arrangements offer administrative ease to foreign buyers seeking a single financing package for the whole deal when an export sale transaction involves sourcing from more than one country (rather than, for example, an Ex-Im Bank guarantee of a loan for the U.S. procurement and an ECGD guarantee of a separate loan for the U.K. procurement).
  • "One-stop-shop" arrangements also reduce the number of parties with whom the buyer/borrower will deal, and thus result in one loan agreement, one fee, and one set of disbursement and claims procedures.

How does it work?

  • The location of the Main Contractor and/or the country with the largest share of the sourcing generally will determine which agency will be the Lead ECA. Behind the scenes, the Lead ECA will ask the Follower ECA if it wishes to cover its portion of the exports.
  • If the Follower ECA agrees, the Lead ECA provides cover for the whole deal on its usual terms under one loan agreement and will seek a financial commitment from the Follower ECA.
  • If one ECA is prohibited from supporting business in the buyer's country, then a "one-stop-shop" co-financing arrangement cannot be offered.
  • Each ECA reserves the right to approve or deny an application for support based on its own evaluation of the transaction.

Are additional fees imposed?

  • Ex-Im Bank will use a case-by-case pricing analysis for all co-finance transactions.
  • If the premium rate of the ECAs differ, the ECAs can agree that the premium be blended into one rate.

Does it take longer?

  • No. Since only a single application and a single set of credit documents will be required, the overall time and effort to conclude a "one-stop-shop" transaction should be substantially reduced, compared to arranging financing under two separate facilities with two ECAs.
  • At the application stage, it will take a few days for the Lead ECA to contact and receive a response from the Follower ECA as to whether it is willing to cover its portion of the exports.
  • Once contract negotiations are at an advanced stage, a commitment from the Follower ECA is required before the Lead ECA can document the transaction and issue its cover. These processes will be carried out simultaneously with the ordinary review and approval process of the Lead ECA and are not expected to result in material delays.

What about insurance coverage?

  • Ex-Im Bank has years of experience in processing reinsurance transactions.

 

Contact Information:

For information on co-financing transactions and case-specific inquiries, contact the Co-financing Coordinator at 202.565.3612 (or donna.schneider@exim.gov ). For information on the co-financing agreements and ECA relations, call the Policy and Planning Division (or isabel.galdiz@exim.gov ) at 202.565.3763.

1The Ex-Im Bank NEXI agreement currently allows for Ex-Im Bank to lead in every case. However, the goal is to revise it over time to make it reciprocal.

2Disbursements will be made either using (a) one (transferable) letter of credit in a single currency naming the "lead U.S. Exporter" as the beneficiary, or (b) the reimbursement method.