Railroad Exports
Ex-Im Bank offers financing support to foreign purchasers of new and
used U.S. manufactured commercial and general railroad equipment under
its direct loan, guarantee, and insurance programs. The OECD Arrangement
on Guidelines for Officially Supported Export Credits governs the terms
and conditions of Ex-Im Bank’s financing support for railroad equipment
exports including locomotives, and passenger and freight cars (“rolling
stock”).
Railroad Equipment Exports
Ex-Im Bank will base its credit decision on the creditworthiness of
the railroad borrower (and/or guarantor). Depending on the risk
characteristics of the transaction, Ex-Im Bank may require the
additional security provided by a mortgage over the equipment. For
government-owned or controlled railroad borrowers, Ex-Im Bank may also
require a sovereign guarantee. Generally, Ex-Im Bank can support up to
85 percent of the contract price (but not more than 100 percent of the
“U.S. content” of the equipment). For transactions that represent
especially high risks, however, Ex-Im Bank may reduce its advance rate
below 85 percent. Repayment of principal and interest cannot be less
frequent than every six months, and the first installment must be made
no later than six months after the starting point of the credit.
While this Fact Sheet focuses on transportation equipment, Ex-Im
Bank is also able to support U.S. exports of railroad “infrastructure”
equipment (e.g., tracks, switching and signaling equipment, etc.). The
terms and conditions of Ex-Im Bank's support for such equipment also
will be governed by the OECD Arrangement.
New Rolling Stock Equipment
For new rolling stock equipment (i.e., locomotives), support is
typically provided under Ex-Im Bank's medium or long-term guarantee
program where Ex-Im Bank guarantees 100 percent of the principal and
interest of a loan extended by a financial institution. An asset-based
finance lease structure may be considered in those countries in which
there is an acceptable legal system for recording security interests in
railroad equipment. For Category I countries (countries on the World
Bank’s “graduation list”), the maximum repayment term is five years. For
Category II countries (all other countries), the maximum repayment term
is 10 years.
Used Rolling Stock Equipment
Used rolling stock equipment may also be eligible for Ex-Im Bank
support provided that the equipment meets Ex-Im Bank's used equipment
criteria. These criteria specify that the equipment must (i) be
originally manufactured in the U.S.; (ii) be in service within the U.S.
for at least one year prior to export; and (iii) be exported from a U.S.
port. A Used Equipment Questionnaire must be completed when the
application is submitted and will be reviewed by Ex-Im Bank to determine
eligibility. The repayment term that Ex-Im Bank will provide is
generally commensurate with the equipment’s remaining “useful life”, but
will not exceed the repayment term for new equipment. For locomotives,
the portion of the total value of the used equipment attributable to its
being rebuilt or reconditioned in the U.S. is an important factor in
determining the remaining “useful life” of the used equipment.
Fees
Ex-Im Bank charges an exposure fee for each transaction and which
may be included in the financed amount supported by Ex-Im Bank. The
“Exposure Fee Calculator” located on Ex-Im Bank’s website is used to
determine the exposure fee. Ex-Im Bank charges a commitment fee of
one-eighth of one percent per annum on the non-utilized amount for a
guaranteed loan (and one-half of one percent per annum for a direct
loan), which begins to accrue 60 days after Ex-Im Bank approval of the
transaction, and which may not be financed.
Ex-Im Bank offers financing support to foreign purchasers of new and used U.S. manufactured commercial and general railroad equipment under its direct loan, guarantee, and insurance programs. The OECD Arrangement on Guidelines for Officially Supported Export Credits governs the terms and conditions of Ex-Im Bank’s financing support for railroad equipment exports including locomotives, and passenger and freight cars (“rolling stock”).
Railroad Equipment Exports
Ex-Im Bank will base its credit decision on the creditworthiness of the railroad borrower (and/or guarantor). Depending on the risk characteristics of the transaction, Ex-Im Bank may require the additional security provided by a mortgage over the equipment. For government-owned or controlled railroad borrowers, Ex-Im Bank may also require a sovereign guarantee. Generally, Ex-Im Bank can support up to 85 percent of the contract price (but not more than 100 percent of the “U.S. content” of the equipment). For transactions that represent especially high risks, however, Ex-Im Bank may reduce its advance rate below 85 percent. Repayment of principal and interest cannot be less frequent than every six months, and the first installment must be made no later than six months after the starting point of the credit.
While this Fact Sheet focuses on transportation equipment, Ex-Im Bank is also able to support U.S. exports of railroad “infrastructure” equipment (e.g., tracks, switching and signaling equipment, etc.). The terms and conditions of Ex-Im Bank's support for such equipment also will be governed by the OECD Arrangement.
New Rolling Stock Equipment
For new rolling stock equipment (i.e., locomotives), support is typically provided under Ex-Im Bank's medium or long-term guarantee program where Ex-Im Bank guarantees 100 percent of the principal and interest of a loan extended by a financial institution. An asset-based finance lease structure may be considered in those countries in which there is an acceptable legal system for recording security interests in railroad equipment. For Category I countries (countries on the World Bank’s “graduation list”), the maximum repayment term is five years. For Category II countries (all other countries), the maximum repayment term is 10 years.
Used Rolling Stock Equipment
Used rolling stock equipment may also be eligible for Ex-Im Bank support provided that the equipment meets Ex-Im Bank's used equipment criteria. These criteria specify that the equipment must (i) be originally manufactured in the U.S.; (ii) be in service within the U.S. for at least one year prior to export; and (iii) be exported from a U.S. port. A Used Equipment Questionnaire must be completed when the application is submitted and will be reviewed by Ex-Im Bank to determine eligibility. The repayment term that Ex-Im Bank will provide is generally commensurate with the equipment’s remaining “useful life”, but will not exceed the repayment term for new equipment. For locomotives, the portion of the total value of the used equipment attributable to its being rebuilt or reconditioned in the U.S. is an important factor in determining the remaining “useful life” of the used equipment.