> Direct Loans and Guarantees
>
> Guidelines For Letters of Interest
>
> These Program Guidelines for Letters of Interest describe general
> Ex-Im Bank policies applicable to Medium-Term and Long-Term Direct
> Loans and Guarantees which the U.S. exporter and the foreign buyer
> should consider in structuring the export transaction. A Direct Loan
> is an extension of credit by Ex-Im Bank to a foreign borrower. A
> Guarantee is repayment protection for an extension of credit by a
> private lender to a foreign borrower (a \"Guaranteed Loan\"). Ex-Im
> Bank\'s support of a Guaranteed Loan may be either a comprehensive
> guarantee (covering all risks) or a political risk guarantee (covering
> the risks defined in Ex-Im Bank\'s Political Risk Guarantee
> Agreement). Ex-Im Bank\'s guarantee commits the full faith and credit
> of the U.S. Government and covers all of the principal and regular
> interest on the Guaranteed Loan.
>
> A Letter of Interest (LI) is an indication of financing terms Ex-Im
> Bank is prepared to consider based on a limited review of the
> transaction. A Preliminary Commitment (PC) is a preliminary offer of
> financing terms based on a credit evaluation and policy review. A
> Final Commitment (AP) is an authorization of Ex-Im Bank financing.
>
> **Terms**
>
> The terms of Ex-Im Bank support for Direct Loans and Guaranteed Loans
> are consistent with the Organization for Economic Cooperation and
> Development Arrangement on Guidelines for Officially Supported Export
> Credits (the \"OECD Arrangement\"). The OECD Arrangement sets the
> standards for the basic terms and conditions of export credits,
> provides procedures for notifying, matching, and consulting on offers
> of exceptional financing, and describes criteria for the use of tied
> aid.
>
> Ex-Im Bank Export Credit Insurance is available for transactions
> requiring Ex-Im Bank coverage of no more than \$10 million and an
> amortization period no longer than five years. The Program Guidelines
> for Export Credit Insurance differ in some respects from those
> applicable to Direct Loans and Guarantees. Contact Business
> Development (202-565-3946), one of Ex-Im Bank\'s regional offices, or
> your insurance broker for more information about Export Credit
> Insurance.
>
> **Section I: Financing Considerations**
>
> **1.01 Credit Risk**
>
> If the Term Sheet attached to this LI identifies a Guarantor, Ex-Im
> Bank will require that the specified Guarantor agree to guarantee
> repayment of the Direct Loan or Guaranteed Loan. If the Guarantor line
> in the Term Sheet refers to this section of the Program Guidelines,
> Ex-Im Bank will evaluate the credit risk of the Borrower at the time
> of a PC or AP application. If the credit risk of the Borrower is
> acceptable, Ex-Im Bank will not require a Guarantor. In the event
> Ex-Im Bank determines that a Guarantor is necessary, Ex-Im Bank will
> generally require a sovereign guarantee for a public non-sovereign
> Borrower or a guarantee from a creditworthy financial institution for
> a private sector Borrower.
>
> **1.02 Commitment Fee**
>
> Beginning 60 days after the date of authorization of an AP, the
> Commitment Fee specified in the Term Sheet for this LI accrues on the
> undisbursed and uncanceled portion of the Direct Loan or Guaranteed
> Loan, and is payable on each scheduled payment date.
>
> **1.03 Exposure Fee**
>
> **Exposure Fee Determination**
>
> The Exposure Fee is Ex-Im Bank\'s charge for accepting the credit risk
> of a transaction. The Exposure Fee charged for a particular
> transaction is determined by seven variables: exposure fee level of
> the country, percentage of cover, the "quality" of product provided,
> the length of the drawdown and repayment periods, whether the fee is
> financed or not and whether the fee is paid up front or as drawn, as
> described in the attached Exposure Fee Advice. The Exposure Fee is
> specified per \$100 of the Financed Portion disbursed and is payable
> up front or at the time of each disbursement. Ex-Im Bank will finance
> the Exposure Fee if the applicant for the AP requests that it be
> financed in its entirety. The actual Exposure Fee will be determined
> by Ex-Im Bank at the time of issuance of a PC or AP in accordance with
> the procedures described in the Advice.
>
> **1.04 Interest Rate**
>
> **1.041 Direct Loan**
>
> The interest rate on a Direct Loan (the \"Ex-Im Bank Lending Rate\")
> is the rate which is the lower of: (i) a 100-basis point spread over
> the applicable Base Treasury Rate in effect on the date Ex-Im Bank
> receives a complete application for an AP; or (ii) if a PC has been
> issued and a complete AP application is submitted to Ex-Im Bank on or
> before the PC expiry date, the rate, if any, specified in the PC. (A
> PC is available only for certain types of transactions, as described
> in \"How to Apply for Ex-Im Bank Financing\".) The applicable Base
> Treasury Rate is determined on the basis of the repayment term of the
> Direct Loan, as follows:
>
> Loan Repayment Term Base Treasury Rate
>
> Up to Five Years Three Year Maturities
>
> Over Five to 8-1/2 Years Five Year Maturities
>
> Over 8-1/2 Years Seven Year Maturities
>
> The Base Treasury Rates are subject to change on the 15th of each
> month and are based on the average Treasury rates for the preceding
> month.
>
> **1.042 Guaranteed Loan**
>
> The interest rate on a Guaranteed Loan is a rate negotiated among the
> Borrower, Guarantor, if any, and the guaranteed lender. The rate may
> be fixed or floating.
>
> **1.05 Repayment Terms**
>
> **1.051 Principal Repayment Starting Point**
>
> Repayment of principal generally begins six months after the
> Exporter\'s contractual responsibility is concluded. In most single
> shipment transactions, this means that principal repayment begins six
> months after delivery or installation of the goods/services. For
> projects involving the installation of multiple units, either multiple
> starting points (one for each repayment tranche) or an average
> starting point is used. If the Exporter has a contractual role in
> completing a project, principal repayment will generally start six
> months after the project\'s physical readiness for operation. Ex-Im
> Bank will determine the appropriate starting point at the time of
> issuance of a PC or AP.
>
> **1.052 Principal Repayment Term**
>
> The repayment term or term range referenced in the Term Sheet reflects
> the size and nature of the export contract and is in accordance with
> the OECD Arrangement. In the case of a repayment term range, Ex-Im
> Bank will specify the term at the time of issuance of a PC or AP and
> will provide at least the minimum term in the range. Ex-Im Bank will
> consider matching a repayment term longer than the term referenced in
> this LI, if such a term is offered by another export credit agency
> (ECA). For additional information concerning principal repayment terms
> refer to the Ex-Im Bank's Standard Repayment Terms Fact Sheet.
>
> If the LI Letter references section 1.06 and a repayment term range is
> referenced in the Term Sheet, Ex-Im Bank is prepared to offer in a PC
> or AP the maximum term in the range after Ex-Im Bank notifies the term
> to other ECAs.
>
> If the export goods have an expected or useful life that is shorter
> than the applicable term based upon the Contract Price and Country
> Category, then the term may not exceed the expected or useful life.
> Ex-Im Bank staff will consult with the Engineering and Environment
> Division concerning the applicability of shorter repayment terms based
> upon the type of export goods. Also, please refer to Section 2.05 Used
> Equipment which also indicates that the useful life of the equipment
> will determine the applicable repayment term.
>
> If the export goods are to be purchased for resale, then the term
> generally may not exceed 2 years. Ex-Im Bank will consider a term
> longer than 2 years in conjunction with a PC or AP application,
> provided that the buyer is (1) purchasing the export goods to satisfy
> a specific contract with an end-user of the goods, and (2) providing
> financing to the end-user with a repayment term at least as long as
> the term requested from Ex-Im Bank.
>
> **1.053 Total Term Limitation**
>
> If the LI Letter references this section of the Program Guidelines,
> Ex-Im Bank support is generally not available in the Borrower\'s
> country for a total term exceeding seven years. The total term is the
> time from the AP authorization date until the final repayment date of
> the Direct Loan or Guaranteed Loan. For transactions subject to this
> limitation, the maximum repayment term is usually five years. Ex-Im
> Bank will, however, consider support for a repayment term longer than
> five years if the Borrower or Guarantor, if any, qualifies as
> described in the Exposure Fee Advice. Ex-Im Bank will determine the
> appropriate repayment term at the time of issuance of a PC or AP.
>
> **1.06 Environmental Exports Program**
>
> If the LI Letter references this section of the Program Guidelines,
> this transaction qualifies for consideration under Ex-Im Bank\'s
> Environmental Exports Program (EEP). A transaction supported by the
> EEP must involve the export of goods/services: (i) to be specifically
> used to produce beneficial environmental effects; or (ii) to be
> incorporated into a project specifically dedicated to producing
> beneficial environmental effects. Ex-Im Bank will offer enhanced
> financial support for qualified transactions, including: (i)
> "automatic" support for Local Costs (costs of locally originated
> and/or manufactured goods and services. Local Costs are costs that are
> incurred in the country of the End-user) in an amount not exceeding
> 30% of the Contract Price; and (ii) support for the capitalization of
> interest during construction on the Financed Portion. Section 1.052
> includes information regarding the repayment term applicable to
> transactions that qualify for the EEP.
>
> **1.07 Engineering Multiplier Program**
>
> If the LI Letter references this section of the Program Guidelines,
> this transaction qualifies for consideration under Ex-Im Bank\'s
> Engineering Multiplier Program (EMP). A transaction supported by the
> EMP must involve the export of architectural, industrial design, or
> engineering services for a project with the potential of generating
> subsequent U.S. exports of at least \$10 million or double the
> Contract Price of the transaction, whichever is greater. For EMP
> transactions, Ex-Im Bank will offer "automatic" support of Local Costs
> (for locally originated and/or manufactured goods and services) in an
> amount not exceeding the lesser of \$1.5 million or 30% of the
> Contract Price. If the project is subsequently implemented and Ex-Im
> Bank approves financing for related U.S. exports, Ex-Im Bank will
> allow the Borrower to roll the remaining balance of the EMP
> pre-construction loan into the Direct Loan or Guaranteed Loan for the
> project.
>
> Ex-Im Bank will not provide enhanced financial support for EMP
> transactions if the U.S. Trade and Development Agency (TDA) is
> prepared to fund the transaction. Ex-Im Bank will determine the
> availability of TDA support only in conjunction with a PC or AP
> application.
>
> **1.08 Medical Equipment Initiative**
>
> The Medical Equipment Initiative (MEI) offers solutions to increase
> the export of medical equipment from U.S. companies to foreign
> borrowers that would not go forwards without Ex-Im Bank support. The
> MEI includes creative financing structures and enhanced cover.
>
> Under the MEI support will include consideration of the following
> enhanced features: 1) Automatic Local Cost Cover -- Local cost
> financing will be made available on an automatic basis for local costs
> (including import and similar duties) related to the exporter's scope
> of work and documented as such up to 30 percent of the U.S. contract
> value; 2) Repayment terms will be offered up to seven years -- Terms
> of up to seven years will be offered for medium term transactions when
> consistent with the expected life of the product, subject to a minimum
> contract value of \$350,000; and 3) Capitalization of Interest --
> Interest may be capitalized when there is an extended installation
> and/or construction period.
>
> **1.09 Local Cost Support**
>
> For transactions that do not qualify for Local Cost support under the
> EEP, EMP or MEI (see sections 1.06,1.07 and 1.08), Ex-Im Bank may
> offer support for Local Cost., Ex-Im Bank may provide local cost
> support for all *long-term* transactions. Ex-Im Bank may provide local
> cost support for medium-term transactions as long as the U.S. exporter
> can prove either: (1) the availability of official export credit
> support for the local cost; or (2) private market financing for local
> costs is either not available or cost prohibitive.
>
> All transactions that receive local cost support must meet the
> following eligibility criteria:. The Local Costs must be: (i) related
> to the U.S. exporter's scope of work; (ii) certified by the U.S.
> exporter in the Exporter's Certificate; (iii) detailed in the
> Acquisition List; and (iv) originated or manufactured in the host
> country.
>
> Ex-Im Bank can support up to 30% of the value of the U.S. Net Contract
> Price for local costs. Ex-Im Bank will determine the appropriate
> amount of Local Cost support at the time of issuance of an AP.
>
> **1.10 Capitalization of Interest during Construction (CIDC)**
>
> For transactions that do not qualify for CIDC support under the EEP
> (see section 1.06), Ex-Im Bank will offer support for CIDC, provided
> that Ex-Im Bank has proof that a foreign ECA has offered equivalent
> support for the same contract (not for a different contract for the
> same project). Such proof would normally include either: (i) a copy of
> the foreign ECA\'s offer of support for CIDC; or (ii) confirmation of
> CIDC support by a foreign ECA through Berne Union telex/fax channels.
> Ex-Im Bank will determine the appropriate amount of CIDC support at
> the time of issuance of an AP.
>
> **1.11 Tied Aid Transactions**
>
> There are markets where many public sector infrastructure projects
> attract foreign official tied aid financing, and where the host
> government actively solicits such financing. Tied aid financing is
> characterized either by the mixture of a large grant with a standard
> export credit of up to 10 years in length, or by a credit with a
> repayment term of 20 to 30 years and an interest rate far lower than
> market rates. Tied aid financing is conducted on a
> government-to-government basis.
>
> Should the authorities responsible for the procurement decision for
> your project provide indications that tied aid financing from another
> government is available, or should you receive other indications that
> a foreign government is considering offering tied aid for your
> project, we encourage you to contact Ex-Im Bank as soon as possible
> regarding potential use of our Tied Aid Capital Projects Fund.
>
> Depending on the nature and conditionality of the foreign tied aid
> offer, Ex-Im Bank will consider offering one of several forms of
> counter offer -- a Willingness to Match Indication, a Tied Aid Letter
> of Interest, or a Tied Aid Preliminary Commitment -- each of which is
> designed to pre-empt or displace the foreign tied aid offer.
>
> **1.12 Lease Transactions**
>
> Ex-Im Bank will consider offering a guarantee when the contract
> between the Exporter and the Buyer is a finance or operating lease.
> The terms of Ex-Im Bank\'s support will generally depend on: (i) the
> degree to which the lease transfers the benefit and risks of ownership
> of the leased asset from the lessor to the lessee; and (ii) the
> relationship between the total principal portion of the lease payments
> and the cost of the asset to the lessor. Ex-Im Bank will quote terms
> for a guarantee related to a lease only in a PC or AP.
>
> **1.13 Currency of Direct Loan or Guaranteed Loan**
>
> Direct Loans and Guaranteed Loans are typically denominated in U.S.
> dollars. On a case-by-case basis, Ex-Im Bank will consider foreign
> currency guarantees for readily convertible currencies. Ex-Im Bank
> will indicate its willingness to offer a foreign currency guarantee
> only in a PC or AP.
>
> **1.14 LI Expiry Date**
>
> The terms of this LI are valid until the LI Expiry Date specified in
> the Term Sheet. The LI applicant may request a maximum of three
> six-month extensions of the LI Expiry Date which, if approved by Ex-Im
> Bank, would extend the validity of the LI for a total term of two
> years. The terms referenced in this LI, including any indicated
> interest rate and fees, may change if the LI Expiry Date is extended.
>
> **Section II: Eligibility of Goods and Services**
>
> **2.01 Foreign Content Policy: Eligibility**
>
> Foreign content guidelines for both Long-Term and Medium-Term
> transactions follow an \"aggregate\" approach that covers all goods
> and services provided by a particular Supplier which are contained in
> a single U.S. Supply Contract.. All such goods and services are
> eligible for inclusion in an Ex-Im Bank financing package only if they
> are shipped from the United States.
>
> Ex-Im Bank has the exclusive right to determine what does and does not
> constitute \"U.S. Content\", and \"Eligible Foreign Content\". These
> terms are defined as follows:
>
> "U.S. Content" is the aggregate Net Contract Price of the goods and
> services less the aggregate cost of Eligible Foreign Content of the
> goods and services.
>
> The "Net Contract Price" is the value of the goods and services in a
> U.S. Supply Contract less ineligible foreign content and local costs.
>
> "Eligible Foreign Content" is defined as the foreign content of goods
> and services included in a U.S. Supply Contract and goods shipped from
> the United States.
>
> Local Costs do not qualify as Eligible Foreign Content.
>
> **2.02 Foreign Content: Level of Support**
>
> For eligible goods and services of supply in a particular request for
> guarantee or disbursement, Ex-Im Bank will support the lesser of: (i)
> 100% of the aggregate U.S. Content of the goods and services; or (ii)
> 85% of the aggregate Contract Price (including Eligible Foreign
> Content). Ex-Im cover for individual disbursements/ shipments will be
> based on the aggregate U.S. and foreign content percentages
> represented in an up-front Exporter's Certificate, irrespective of the
> relative amounts of U.S. and foreign content in any specific
> disbursement/shipment request.
>
> Material Changes\*\* in the amount of foreign content from the
> up-front certification must be notified to Ex-Im Bank, and future
> disbursements will be adjusted so that only the value of the U.S.
> content is supported by Ex-Im Bank. See the Exporter's Certificate
> instructions for additional information on this point.
>
> \*\* A "Material Change" in foreign content is defined as a change in
> foreign content by more than 5% which exceeds 20% of the Net Contract
> Price\*.
>
> A cash payment of at least 15% of the aggregate Contract Price of the
> goods/services is required.
>
> **2.03 Services**
>
> Services performed by U.S.-based personnel employed by a company doing
> business in the United States constitute U.S. Content. Eligible
> Foreign Content components of U.S. service contracts are limited to:
> (i) the costs of foreign-based personnel employed directly by the U.S.
> company; (ii) travel on non-U.S. carriers; and (iii) per diem or
> related expenses incurred outside of the United States.
>
> **2.04 Ancillary Service Fees**
>
> Ancillary services include banking, legal, financial advisor, and
> technical consultant (e.g., engineering, marketing or environmental
> consultant) services related to the structuring, evaluation, and
> documentation of the financing for an export transaction.
>
> As a general rule, Ex-Im Bank will not set ceilings on the amount of
> fees for Ancillary Services that may be financed in any particular
> transaction. However, Ex-Im Bank will only finance those fees it
> considers reasonable. Limitations on the amount of fees financed could
> be imposed, for example, where amount of the fees for Ancillary
> Services is considered excessive as compared to the amount of the
> financing or where the credit involves risk-sharing.
>
> **2.05 Used Equipment**
>
> Some or all of the costs associated with the sale of used equipment
> may be eligible for Ex-Im Bank support. The financing term for used
> equipment may not exceed the remaining useful life of the equipment.
> The specific amount and terms of Ex-Im Bank support for used equipment
> are based on an evaluation of the related technical and financial
> risks. Ex-Im Bank will issue an LI for a transaction that includes
> used equipment, but will approve specific terms for used equipment
> only in conjunction with a PC or AP application.
>
> **2.06 Nuclear Transactions**
>
> If the LI Letter references this section of the Program Guidelines,
> Ex-Im Bank has determined, based on representations from the
> applicant, that the goods/services are not identified with the
> physical operations of any particular nuclear project or facility and
> are, therefore, eligible for an LI. Nuclear exports eligible for an LI
> include: (i) nuclear simulators designed for training purposes; (ii)
> environmental or radiation monitoring equipment not directly linked
> with the operations systems of a nuclear facility; and (iii)
> pre-project services such as feasibility studies or site evaluations.
>
> This LI Letter will be considered null and void if the transaction
> involves the export of: (i) any goods/services to be used in the
> physical operation of a nuclear power plant or other nuclear facility;
> (ii) nuclear fuel; or (iii) reactors used for research or medical
> technology. Ex-Im Bank support for such transactions will be
> considered only in conjunction with a PC or AP application.
>
> **2.07 Military Transactions**
>
> Ex-Im Bank is prohibited by law, with limited exceptions, from
> financing defense articles and defense services. In defining what is a
> \"defense article\" or \"defense service\", Ex-Im Bank uses criteria
> based on the identity of the End-user, the nature of the
> goods/services, and the use to which it will be put. If the
> goods/services are sold to a military organization, they are
> considered to be defense articles until proven otherwise, and if the
> goods/services are designed primarily for military use, they are
> presumed to be a defense articles. Ex-Im Bank support for transactions
> involving the sale of goods/services to a military or defense entity
> can be provided only for those transactions which qualify under one of
> the following categories of limited exceptions:
>
> 1\) *Humanitarian goods/services* related to lifesaving, health, and
> medical purposes such as hospital equipment, medic al laboratory
> equipment, ambulances, fire engines, and rescue aircraft are not
> considered to be military, even if sold to a military buyer.
>
> 2\) *Small marine vessels and aircraft used for coast guard/border
> patrol*, as well as activities such as drug interdiction, natural
> resource monitoring, and rescue or lifesaving services related to
> international shipping, may be eligible even though sold to military
> entities and used primarily for routine patrol activities.
>
> 3\) If the goods/services has \"*dual use*\" (both military and
> commercial or civilian applications), it is eligible if there exists
> convincing evidence that the goods/services is nonlethal in nature,
> the goods/services will be used primarily for civilian activities, and
> the Buyer or End-user provides a certification to that effect.
> Specifically, Ex-Im Bank\'s investigation must indicate that: (i) the
> End-user has a legitimate civilian requirement which the dual-use
> goods/services will meet; (ii) the primary motivation for the purchase
> appears to be based on the civilian requirement; and (iii) the primary
> use for the goods/services by the intended customer will be civilian
> in nature.
>
> 4\) Under the *Anti-Drug Abuse Act of 1988*, as amended, if Ex-Im Bank
> determines that an goods/services constitutes a defense article and is
> therefore ineligible for support, a limited waiver of the statutory
> prohibition against Ex-Im Bank assistance in financing the sale of
> such defense articles may be obtained. Under this \"anti-narcotics\"
> provision, if the goods/services in question is on the U.S. Munitions
> List and a \"Presidential Determination of National Interest\" is
> obtained (through a request from the host government directed to the
> U.S. State Department) which concludes that the goods/services are to
> be used primarily for drug interdiction purposes, then Ex-Im Bank may
> provide guarantee or insurance support for the defense article.
>
> If the LI Letter references this section of the Program Guidelines,
> Ex-Im Bank has determined that there exists a reasonable probability,
> based on representations from the applicant, that the goods/services
> will eventually be considered eligible in accordance with the criteria
> set forth above. However, a *final determination* of eligibility by
> Ex-Im Bank can only be obtained in conjunction with a PC or AP
> application. Hence, this transaction may be determined to constitute a
> military sale, thereby making it ineligible for Ex-Im Bank support
> even though Ex-Im Bank previously issued an LI for the transaction.
>
> **2.08 Transportation**
>
> **2.081 Shipping Requirements**
>
> Goods/services financed under a Medium-Term or Long-Term Direct Loan
> or a Long-Term Guaranteed Loan and transported by ocean vessel must be
> shipped in vessels of U.S. registry, except to the extent that a
> waiver of this requirement is obtained from the U.S. Maritime
> Administration (\"MARAD\"). \"Medium-Term\" and \"Long-Term\" are
> defined in section 2.01. At the time of an AP application, the
> Borrower should address a request for a MARAD waiver to the Director,
> Office of Market Development, Room 7209, Maritime Administration, U.S.
> Department of Transportation, 400 7th Street, S.W., Washington, D.C.
> 20590, with a copy to Ex-Im Bank.
>
> **2.082 Financing of Transportation Costs**
>
> Except as otherwise provided below with respect to ocean freight for
> certain shipments of goods to Brazil, the cost of ocean or air freight
> for shipment of goods on vessels or aircraft of non-U.S. registry is
> considered to be Eligible Foreign Content if it is included in the
> Contract Price of the goods. If such freight cost is for the use of
> vessels or aircraft of U.S. registry, the cost is considered U.S.
> Content. The cost of ocean freight for shipment of goods to Brazil on
> vessels registered in Brazil will be treated as U.S. Content if: (i)
> such freight cost is included in the Contract Price of the goods; and
> (ii) the Borrower has obtained a waiver of shipment on vessels of U.S.
> registry from MARAD.
>
> **2.9 Insurance**
>
> The Borrower must obtain insurance against marine and transit hazards
> on all shipments of the goods financed under the Direct Loan or the
> Guaranteed Loan. The insurance must be in an amount not less than the
> amount of the disbursements to be made under the Direct Loan or the
> Guaranteed Loan with respect to such shipments. U.S. insurers should
> be given a non-discriminatory opportunity to bid for such insurance
> business related to the goods. If the premiums for such insurance with
> respect to the goods are paid in U.S. dollars under policies of
> insurance payable in U.S. dollars and placed with U.S. companies in
> the United States, they will be considered as part of the U.S. Content
> of the goods. All other premiums will be considered as part of the
> Eligible Foreign Content of the goods.
>
> **2.10 Earliest Shipment Date**
>
> For all medium - and long-term transactions, that occurred prior to
> the submission of a final commitment or insurance application to Ex-Im
> Bank may be eligible for Ex-Im Bank financing provided the shipments
> occurred within one of the following allowable time frames:

-   Shipments that occurred on or after the date Ex-Im Bank issued the
    initial Letter of Interest. For such transactions, only shipments
    that occurred up to 24 months before Ex-Im Bank received a final
    commitment application are eligible;

-   Shipments that occurred on or after the date Ex-Im Bank received the
    initial Preliminary Commitment application. For such transaction,
    only shipments that occurred up to 24 months before Ex-Im Bank
    received a final commitment application are eligible; and

-   Shipments that occurred up to 12 months prior to the date Ex-Im Bank
    received the final commitment application or insurance application
    for the transaction.

> The maximum reachback period is the earlier of the three dates
> summarized above.
>
> **2.11 Export Contracts**
>
> The contracts for the sale of the goods/services to be financed under
> a Direct Loan or a Guaranteed Loan must be submitted to Ex-Im Bank at
> the time of application for an AP. The export contracts must be
> satisfactory to Ex-Im Bank and shall not violate any applicable law.
>
> **Section III: Other Policy Considerations**
>
> **3.01 Need for Ex-Im Bank**
>
> Ex-Im Bank supports transactions when at least one of the following
> two conditions exists: (i) there is a lack of adequate financing
> available from other sources, such as commercial banks or the capital
> markets; and (ii) a foreign ECA is offering financing support on
> behalf of a foreign exporter which is competing with a U.S. exporter
> for the same transaction. At the time of application for a PC or AP,
> Ex-Im Bank must make a positive determination that at least one of
> these conditions applies.
>
> **3.02 Co-financing with Other U.S. Government Agencies**
>
> In transactions where Ex-Im Bank is participating in a project with
> other U.S. government agencies, the joint financial support will be
> reviewed at the time of a PC or AP application for compliance with the
> guidelines of the OECD Arrangement. If this LI references this section
> of the Program Guidelines, the applicant has indicated (or Ex-Im Bank
> is otherwise aware) that a U.S. government agency besides Ex-Im Bank
> has been asked to support this export transaction or a related
> project. The LI Letter will be considered null and void if another
> U.S. government agency offers a grant in an amount that exceeds the
> lesser of \$1 million or 3% of the export contract value.
>
> **3.03 Environmental Impact**
>
> Ex-Im Bank will issue a PC or AP only after considering the potential
> environmental effects of the project or products financed by the
> Direct Loan or Guaranteed Loan, and may withhold support based upon
> adverse environmental impact. For Long-Term transactions, refer to the
> applicable Annex to the Program Guidelines for the environmental
> information which Ex-Im Bank will require with a PC or AP application.
>
> **3.04 Economic Impact**
>
> Ex-Im Bank is prohibited by statute from extending support for
> transactions that yield a net negative impact on the U.S. economy. To
> determine whether a transaction is likely to yield a net negative
> impact on the U.S. economy, Ex-Im Bank subjects applications for
> preliminary commitments and final commitments to the following
> questions:
>
> 1\) Does the transaction support capital equipment to produce an
> exportable good? *(If the transaction does not support capital
> equipment to produce an exportable good, the economic impact issue is
> not relevant to the transaction; if the transaction supports capital
> equipment to produce an exportable good, the transaction is subjected
> to the next question.)*
>
> 2\) Are there anti-dumping or countervailing duty orders applicable to
> both the buyer and the buyer's resulting production, or are Section
> 201 of the Trade Act of 1974 trade measures applicable to the product?
> (*If the referenced trade measures are applicable, Ex-Im Bank staff
> will recommend that the Board deny the transaction. However, the
> applicant will be given the opportunity to appeal the recommendation
> for denial by demonstrating that the lack of Ex-Im Bank support would
> cause the exporter extraordinary harm -- e.g., imminent bankruptcy. If
> there are no applicable trade measures, the transaction is subjected
> to the next question. If there are applicable trade measures and the
> applicant demonstrates extraordinary harm due to the lack of Ex-Im
> Bank financing, the transaction is subjected to the next question.)*
>
> 3\) Is Ex-Im Bank financing more than \$10 million? *(If the Ex-Im
> Bank financing is \$10 million or less, the transaction is not subject
> to further economic impact analysis prior to Ex-Im Bank consideration
> of the transaction. If the Ex-Im Bank financing is more than \$10
> million, the transaction is subjected to the next question.)*
>
> 4\) Does the transaction pose the risk of substantial injury? *(Per
> Ex-Im Bank's charter, substantial injury occurs if the foreign
> production made with the Ex-Im Bank financed equipment is equal to 1%
> or more of U.S. production. If the transaction meets the substantial
> injury test, Ex-Im Bank subjects applications for Preliminary
> Commitments and Final Commitments to a full economic impact analysis,
> including an assessment of whether the foreign project will produce a
> commodity in oversupply. If the transaction does not meet the
> substantial injury test, the transaction is not subject to further
> economic impact analysis prior to Ex-Im Bank consideration of the
> transaction.)*
>
> If applicants (for Letters of Interest, Preliminary Commitments or
> Final Commitments) would like advice on whether a proposed transaction
> is likely to be impacted by economic impact considerations, Ex-Im Bank
> is available to provide preliminary guidance on whether: (i) the
> commodity to be produced by the foreign project is in oversupply; (ii)
> the buyer and/or the relevant product are subject to applicable trade
> sanctions; and (iii) the foreign production is equal to or exceeds 1%
> of U.S. production (provided the applicant can provide Ex-Im Bank with
> foreign production volumes). Requests for preliminary guidance may be
> submitted in writing to the following email address:
> economic.impact@exim.gov.
>
> **3.05 Related Participants**
>
> Ex-Im Bank generally offers only political risk coverage for a
> Guaranteed Loan if a corporate affiliation exists between participants
> in a transaction and one participant (e.g., the Exporter or guaranteed
> lender) holds effective financial control over another participant
> (e.g., the Buyer or Borrower), however, Ex-Im Bank will consider
> offering a Direct Loan or a Guaranteed Loan with comprehensive
> coverage if it can be demonstrated at the time of a PC or AP
> application that the Buyer is able to purchase competing non-U.S.
> goods/services and obtain a direct loan or comprehensive guarantee or
> insurance coverage from an ECA.
>
> **3.06 Defaults**
>
> Ex-Im Bank may suspend issuance of all LIs, PCs, and APs, processing
> of all amendments and legal documentation, and operative declarations
> for all borrowers and guarantors in arrears to Ex-Im Bank, at the sole
> discretion of Ex-Im Bank. In addition, Ex-Im Bank may cancel this LI
> and limit any future activity with the Borrower or Guarantor if it is
> in default. If the LI Letter references this section of the Program
> Guidelines, Ex-Im Bank is aware of a payment default involving the
> Borrower and/or Guarantor. Ex-Im Bank will not convert this LI to an
> AP unless the default is resolved to Ex-Im Bank\'s satisfaction.
>
> **3.07 Credit Experience**
>
> In deciding whether support will be available for the transaction,
> Ex-Im Bank will take into account its credit experience with the
> Exporter, Supplier, Buyer, Borrower, Guarantor (if any), guaranteed
> lender (if any), and any other participants identified in an AP
> application.
>
> **3.08 Suspension and Debarment**
>
> As a U.S. government agency, Ex-Im Bank is subject to the Federal
> \"Suspension and Debarment\" rules. These rules provide that an agency
> or department of the U.S. government may determine that a person or
> entity should be prevented from participating in government programs
> where that person or entity has, or is believed to have, violated
> certain laws or engaged in certain behavior which indicates a lack of
> responsibility, honesty or integrity. These rules have government wide
> effect and, therefore, a party that has been suspended or debarred by
> another agency or department may be prevented from being a borrower,
> insured, supplier or exporter under Ex-Im Bank\'s loan, guarantee and
> insurance programs. Since the rules provide for certain exceptions,
> Ex-Im Bank must evaluate each case in which suspension or debarment is
> an issue in order to determine whether Ex-Im Bank is prohibited from
> participating in the transaction.
>
> As a general matter, Ex-Im Bank will not issue a PC or AP for a
> transaction in which the applicant, exporter, supplier, or borrower is
> suspended, debarred, proposed for debarment, voluntarily excluded, or
> otherwise ineligible to participate in U.S. government programs.
>
> **3.09 Small Economies**
>
> If the LI Letter references this section of the Program Guidelines,
> the transaction involves a country designated by Ex-Im Bank as a
> \"small economy\". In such cases, Ex-Im Bank will evaluate the net
> impact of the transaction on the country\'s foreign exchange and/or
> tax resources. The evaluation will determine whether or not Ex-Im Bank
> support is available and, if so, the appropriate Exposure Fee. Ex-Im
> Bank will perform this evaluation only in conjunction with a PC or AP
> application.
>
> **3.10 Letter of Credit Caps**
>
> Ex-Im Bank may impose a cap on the amount available for drawing under
> any letters of credit related to Direct Loans and Guaranteed Loans, if
> Ex-Im Bank determines that the credit risk of a transaction warrants
> such action. Ex-Im Bank will consider caps only for the \"highest
> risk\" transactions (e.g., transactions involving risk sharing and
> exceptions to Ex-Im Bank cover policy). Caps on letters of credit are
> determined by Ex-Im Bank, in consultation with the Exporter, at the
> time of an AP application.
>
> **3.11 Host Country Pre-Clearance**
>
> If the LI Letter references this section of the Program Guidelines,
> Ex-Im Bank will require that the appropriate authorities of the
> government of the Borrower\'s country provide Ex-Im Bank with
> confirmation of the host government\'s support for this transaction.
> The confirmation must be received by Ex-Im Bank before Ex-Im Bank will
> consider a PC or AP application.
>
> **3.12 Anti-lobbying Prohibition**
>
> Under a law (31 U.S.C. 1352) which took effect on December 23, 1989,
> recipients of federal loans, grants, contracts and cooperative
> agreements are prohibited from spending federally-appropriated funds
> to influence or lobby certain U.S. government employees, including
> Ex-Im Bank employees, in connection with the granting of those federal
> awards. The law also requires a declaration and disclosure of any
> expenditures made for lobbying or influencing U.S. government
> employees in connection with the granting of those federal awards, as
> well as in connection with insurance and loan guarantees.
>
> Declarations and disclosures are to be made by applicants for APs and
> recipients of the Ex-Im Bank support, as well as certain exporters and
> suppliers. The law does not apply to foreign governments. The
> reporting requirements of the law do not apply to transactions in
> which the Direct Loan or Guaranteed Loan is less than \$150,000.
> Copies of all appropriate Declarations and Disclosure Forms will be
> provided by Ex-Im Bank. Applicants for Ex-Im Bank programs must
> complete and return the forms to Ex-Im Bank before Ex-Im Bank will
> consider an application for an AP. Recipients under Ex-Im Bank
> programs, who are not required to file at the time of application,
> will be required to complete and return the appropriate forms before
> Ex-Im Bank will enter into a loan or guarantee agreement for the
> transaction.
>
> **3.13 Guarantee Documentation**
>
> If an AP for a Guarantee is requested, Ex-Im Bank will require that
> the guaranteed lender have an operative Master Guarantee Agreement
> with Ex-Im Bank before Ex-Im Bank will approve an AP.
>
> **3.14 Specialized Transaction Structures**
>
> Participants seeking Ex-Im Bank support for specialized transaction
> structures, such as those involving security interests in property
> located outside of the United States and co-financing with other
> export credit agencies, should consider the additional costs
> associated with such structures prior to applying for a PC or AP.
> These costs may include outside counsel fees, an expanded
> documentation process, security trustee fees, and registration or
> other charges.
>
> **3.15 Legal Prohibitions**
>
> As an agency of the U.S. government, Ex-Im Bank is subject to
> requirements that may prohibit it from supporting otherwise
> creditworthy transactions. We are not aware at this time of any that
> may affect our ability to support the transaction. Please note,
> however, that despite issuance of this LI, Ex-Im Bank's support of the
> transaction will still be subject to all of Ex-Im Bank's legal
> requirements in effect at the time. If you have any questions about
> the legal status of the transaction, please contact Ex-Im Bank.
>
> **3.16 Direct Loans**
>
> When Ex-Im Bank extends a Direct Loan, Ex-Im Bank enters into a loan
> agreement, including promissory note(s), with the borrower. The
> utilization procedures are detailed in an annex to the loan agreement.
> 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. Generally, the borrower requests that a commercial
> bank (L/C bank) in the United States which is acceptable to Ex-Im Bank
> and which has in place a Letter of Credit Agreement with Ex-Im Bank
> issue or advise letters of credit (L/C) in favor of the exporter(s).
> The L/C bank pays the exporter when presented with the documents
> specified in the letter of credit incorporating Ex-Im Bank's
> requirements. Ex-Im Bank reimburses the L/C bank for Ex-Im Bank's
> share of such payments. L/C charges imposed by the L/C bank are to be
> paid by the exporter(s) or buyer, as agreed upon with the L/C bank.