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  **Medium-Term Credit Standards**

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Ex-Im Bank has adopted credit standards in order to simplify and
expedite processing of medium-term transactions. The credit standards
define the criteria Ex-Im Bank will apply in evaluating creditworthiness
of the primary source of repayment. Medium-term transactions are exports
of capital goods and services with a financed amount not exceeding \$10
million (excluding the exposure fee) and a repayment term of 7 years or
less. Medium-term programs are insurance, guarantees, and loans.

**Attachment A** lists the credit standards that relate to Ex-Im Bank\'s
determination of reasonable assurance of repayment and the need for
credit enhancements, such as repayment guarantees and security
interests. Other Ex-Im Bank policies, such as those regarding eligible
export items and maximum repayment terms, must also be satisfied in
order to obtain medium-term support.

Different standards exist for transactions up to and including \$1
million, those greater than \$1 million up to and including \$5 million
and those greater than \$5 million up to and including \$10 million. The
standards allow increased transparency of credit criteria and a reduced
scope of analysis for transactions up to \$5 million. Within each
transaction size category, there are standards for five types of risk:
sovereign risk, political risk, pre-approved entities, financial
institutions, and non-financial institutions.

A \"pre-approved entity\" is a financial institution or non-financial
institution for which Ex-Im Bank has established a credit limit and a
fee level. Transactions with pre-approved entities can be approved if
Ex-Im Bank determines that no material adverse changes in the company\'s
financial condition have occurred since the approval. Since a full
credit evaluation is unnecessary, transactions with pre-approved
entities can be quickly processed. Contact Business Development
(1-800-565-EXIM) to determine if a particular company has been
pre-approved.

**Part I of Attachment A** lists the credit standards for transactions
up to and including \$1 million (financed portion). The standards for
these transactions with financial institutions and non-financial
institutions which do not have market indications include performance
criteria, mostly financial ratios. The components of the performance
criteria are defined in **Attachment B.** Please note that the
standards, particularly the performance criteria, include a degree of
flexibility. If mitigating credit factors exist, Ex-Im Bank will
consider approval of a transaction that does not meet the standards.
Ex-Im Bank normally processes a **complete** application within 20
business days after it is received, regardless of its conformance to the
standards.

**Part II of Attachment A** lists the credit standards for transactions
greater than \$1 million up to and including \$5 million. The standards
for these transactions also include performance criteria, mostly
financial ratios. There is also a degree of flexibility in these
standards as described above. Ex-Im Bank normally processes a
**complete** application which meets all the credit standards, including
performance criteria, within 20 business days after it is received.
Processing time for a **complete** application which does not meet the
standards is normally 30 business days.

**Part III of Attachment A** describes the credit standards for
transactions greater than \$5 million up to and including \$10 million.
Supplemental information **is required** to evaluate the financial
condition of the primary source of repayment if it is not a financial
institution and may be found in **Attachment C.** If the applicant has
prepared a credit memorandum, submitting it to Ex-Im Bank may facilitate
processing of the application. **Attachment D** describes the guidelines
for medium-term higher risk private sector transactions.

While the credit standards are designed to help Ex-Im Bank process
applications faster, certain transactions will continue to require
additional time because specialized information and/or analysis is
needed. Exports of nuclear-related products, higher risk private sector
transactions or tied aid requests are examples. Please note that,
notwithstanding the limitations on the scope of analysis for a
particular type of risk, Ex-Im Bank will take into account any material
adverse credit information known to Ex-Im Bank at the time of the credit
decision and that Ex-Im Bank reserves the right to request additional
information which it deems necessary to exercise due diligence for a
specific product, participant or market.

**Attachment A**\
**Medium-Term Credit Standards**\
**Part I**\
**Transactions Up to and Including \$1 Million (excluding exposure
fee)**

Unless otherwise indicated, the standards apply to the primary source of
repayment, which may be the buyer (insurance only), borrower, or a
corporate or financial institution guarantor.

Notwithstanding the limitations on the scope of analysis for a
particular type of risk, any material adverse credit information known
to Ex-Im Bank at the time of the credit decision must be taken into
account. Ex-Im Bank normally provides 20 business day turn-around time
on **complete** applications.

**Sovereign Risk**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or barred from doing business with U.S. Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.

**Political Risk**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. Credit report contains no material adverse information.

**Pre-Approved Entities**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. Market indications and other available information disclose no
> material adverse change in financial condition.

**Financial Institutions With Market Indications**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. In same general line of business at least 3 years.\
> 5. Creditor bank reference contains no material adverse information.\
> 6. Audited statements adequately disclose financial condition and were
> prepared according to accounting principles that afford a reasonable
> basis for reliance on the information provided.\
> 7. Auditor\'s opinion is either (a) unqualified or (b) qualified with
> respect to amounts and circumstances not considered material to
> creditworthiness.\
> 8. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity at
> end of last fiscal year.\
> 9. Market indications are reliable and relate to comparable risk (in
> terms of security and payment priority).\
> 10. Market indications suggest a fee level no riskier than Standard
> and Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
> 11. Financial statements disclose no basis for doubting reliability of
> market indications.

**Financial Institutions Without Market Indications**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. In same general line of business at least 3 years.\
> 5. Creditor bank reference contains no material adverse information.\
> 6. Audited statements adequately disclose financial condition and were
> prepared according to accounting principles that afford a reasonable
> basis for reliance on the information provided.\
> 7. Auditor\'s opinion is either (a) unqualified or (b) qualified with
> respect to amounts and circumstances not considered material to
> creditworthiness.\
> 8. Performance Criteria, which include the following, are met:
>
> A.Net income in last fiscal year is at least 1% of average of total
> assets at end of last 2 fiscal years.\
> B. Liquid assets are at least 10% of total assets at end of last
> fiscal year.\
> C. Loan loss reserves are at least 80% of non-performing loans at end
> of last fiscal year.\
> D. Borrowed funds are less than 100% of net loans at end of last
> fiscal year.\
> E. Shareholders\' equity is at least 5% of total assets at end of last
> fiscal year.\
> F. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity at
> end of last fiscal year.\
> G. Interim statements disclose no material adverse change in financial
> condition.

**Non-Financial Institutions With Market Indications**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. In same general line of business at least 3 years.\
> 5. Credit report and creditor bank reference contain no material
> adverse information.\
> 6. Audited or unaudited statements adequately disclose financial
> condition and were prepared according to accounting principles that
> afford a reasonable basis for reliance on the information provided.\
> 7. Auditor\'s opinion is either (a) unqualified or (b) qualified with
> respect to amounts and circumstances not considered material to
> creditworthiness.\
> 8. Ex-Im Bank exposure does not exceed 40% of tangible net worth at
> end of last fiscal year.\
> 9. Market indications are reliable and relate to comparable risk (in
> terms of security and payment priority).\
> 10. Market indications suggest a fee level no riskier than Standard
> and Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
> 11. Financial statements disclose no basis for doubting reliability of
> market indications.

**Non-Financial Institutions Without Market Indications**

1.  Domicile acceptable according to Country Limitation Schedule.\
    2. Not suspended or barred from doing business with U.S.
    Government.\
    3. No unresolved payment issues concerning debts to or guaranteed or
    insured by Ex-Im Bank.\
    4. In same general line of business at least 3 years.\
    5. Credit report and creditor bank reference contain no material
    adverse information.\
    6. Audited or unaudited statements adequately disclose financial
    condition and were prepared according to accounting principles that
    afford a reasonable basis for reliance on the information provided.\
    7. Auditor\'s opinion is either (a) unqualified or (b) qualified
    with respect to amounts and circumstances not considered material to
    creditworthiness.\
    8. Performance Criteria are met, which include the following:

> Positive operating profit and net income in each of last 2 fiscal
> years.\
> B. Positive cash from operations in last fiscal year.\
> C. EBITDA/debt service (including Ex-Im Bank debt if more than 25% of
> total debt) is at least 1.5 for last fiscal year.\
> D. Total liabilities (excluding Ex-Im Bank debt) do not exceed 1.75
> times tangible net worth at end of last fiscal year.\
> E. Ex-Im Bank exposure does not exceed 40% of tangible net worth at
> end of last fiscal year.\
> F. Interim statements disclose no material adverse change in financial
> condition**.**

**Corporate and Financial Institution Guarantees**

> 1\. If primary source of repayment is a start-up company, a guarantor
> that meets applicable standards is required.\
> 2. If ability of primary source of repayment to service its debt is
> materially dependent on cash flow from a major expansion or a new line
> of business, a guarantor that meets applicable standards is required.\
> 3. If more than 25% of sales of primary source of repayment in last
> fiscal year were to a related or commonly owned company, a guarantee
> of the related or commonly owned company is required.\
> 4. If more than 25% of purchases of primary source of repayment in
> last fiscal year were from a related or commonly owned company, a
> guarantee of the related or commonly owned company is required.

**Personal Guarantees**

> 1\. For financial institutions, personal guarantees are not required.\
> 2. For non-financial institutions with sales revenue of at least \$50
> million in last fiscal year, personal guarantees are not required.\
> 3. For non-financial institutions with sales revenue of less than \$50
> million in last fiscal year, personal guarantees are required of (a)
> individuals with ownership interest exceeding 50% and (b) if no
> individual owns more than 50%, any individual with ownership interest
> of at least 20%. Personal financial statements are not required.

**Security Interests and Covenants**

1\. Not required, with the exception of transactions involving the
export of aircraft.\
2. Standard special conditions required for aircraft transactions.

**Ex-Im Bank Action if Standards are Not Met**

> 1.**Consider approval without supplemental information**, if overall
> financial strengths adequately mitigate indicated weaknesses and/or
> uncertainties. For example, if company reported a small net loss in
> next-to-last fiscal year, but meets or exceeds all other standards,
> company will be considered for approval.

2.  **Consider approval with supplemental information**, if mitigating
    information regarding indicated risk(s) is readily available and
    will not materially expand the scope of analysis. For example, if
    company reported negative cash flow from operations in last fiscal
    year, but applicant can provide confirmable information on
    availability of adequate credit lines and company meets or exceeds
    all other standards, company will be considered for approval. Ex-Im
    Bank will not request extensive supplemental information.

> **Require a guarantor** that meets applicable standards.
>
> 4\. If 1, 2, or 3 is not feasible, Ex-Im Bank will **deny the
> credit**. Applicant will be given an opportunity to withdraw
> application if denial appears likely.

**Attachment A**\
**Medium-Term Credit Standards**\
**Part II**\
**Transactions Greater Than \$1 Million Up To and Including \$5
Million**\
**(excluding exposure fee)**

Unless otherwise indicated, the standards apply to the primary source of
repayment, which may be the buyer (insurance only), borrower, or a
corporate or financial institution guarantor.

Notwithstanding the limitations on the scope of analysis for a
particular type of risk, any material adverse credit information known
to Ex-Im Bank at the time of the credit decision must be taken into
account. Ex-Im Bank normally provides 20 business day turn-around time
on **complete** applications which meet all of the credit standards and
performance criteria. Processing time for a complete application which
does not meet the standards is normally 30 business days.

\"Small economies\" are designated at [www.exim.gov]{.underline} under
Country and Fee Information, Exposure Fees, Exposure Fee Advice Tables,
next to the name of the country.

**Sovereign Risk**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or otherwise barred from doing business with U.S.
> Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. Potential macroeconomic impact of a transaction in a country
> designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
> Bank.

**Political Risk**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. Potential macroeconomic impact of a transaction in a country
> designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
> Bank.\
> 5. Credit report contains no material adverse information.

**Pre-Approved Entities**

1.  Domicile acceptable according to Country Limitation Schedule.\
    2. Not suspended or barred from doing business with U.S.
    Government.\
    3. No unresolved payment issues concerning debts to or guaranteed or
    insured by Ex-Im Bank.\
    4. Market indications and other available information disclose no
    material adverse change in financial condition.

**Financial Institutions With Market Indications**

> 1\. Domicile acceptable according to Country Limitation Schedule.\
> 2. Not suspended or barred from doing business with U.S. Government.\
> 3. No unresolved payment issues concerning debts to or guaranteed or
> insured by Ex-Im Bank.\
> 4. In same general line of business at least 3 years.\
> 5. Potential macroeconomic impact of a transaction in a country
> designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
> Bank.\
> 6. Creditor bank reference contains no material adverse information.\
> 7. Audited statements adequately disclose financial condition and were
> prepared according to accounting principles that afford a reasonable
> basis for reliance on the information provided.\
> 8. Auditor\'s opinion is either (a) unqualified or (b) qualified with
> respect to amounts and circumstances not considered material to
> creditworthiness.\
> 9. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity at
> end of last fiscal year.\
> 10. Market indications are reliable and relate to comparable risk (in
> terms of security and payment priority).\
> 11. Market indications suggest a fee level no riskier than Standard
> and Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
> 12. Financial statements disclose no basis for doubting reliability of
> market indications.

**Financial Institutions Without Market Indications**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or barred from doing business with U.S. Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. In same general line of business at least 3 years.\
5. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
6. Creditor bank reference contains no material adverse information.\
7. Audited statements adequately disclose financial condition and were
prepared according to accounting principles that afford a reasonable
basis for reliance on the information provided.\
8. Auditor\'s opinion is either (a) unqualified or (b) qualified with
respect to amounts and circumstances not considered material to
creditworthiness.\
9. Performance Criteria, which include the following, are met:

A. Net income in last fiscal year is at least 1% of average of total
assets at end of last 2 fiscal years.\
B. Liquid assets are at least 10% of total assets at end of last fiscal
year.\
C. Loan loss reserves are at least 80% of non-performing loans at end of
last fiscal year.\
D. Borrowed funds are less than 100% of net loans at end of last fiscal
year.\
E. Shareholders\' equity is at least 5% of total assets at end of last
fiscal year.\
F. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity at
end of last fiscal year.\
G. Interim statements disclose no material adverse change in financial
condition.

**Non-Financial Institutions With Market Indications**

1.  Domicile acceptable according to Country Limitation Schedule.\
    2. Not suspended or barred from doing business with U.S.
    Government.\
    3. No unresolved payment issues concerning debts to or guaranteed or
    insured by Ex-Im Bank.\
    4. In same general line of business at least 3 years.\
    5. Potential macroeconomic impact of a transaction in a country
    designated by Ex-Im Bank as a \"small economy\" is acceptable to
    Ex-Im Bank.\
    6. Credit report and creditor bank reference contain no material
    adverse information.\
    7. Audited statements adequately disclose financial condition and
    were prepared according to accounting principles that afford a
    reasonable basis for reliance on the information provided.\
    8. Auditor\'s opinion is either (a) unqualified or (b) qualified
    with respect to amounts and circumstances not considered material to
    creditworthiness.

9\. Ex-Im Bank exposure does not exceed 40% of tangible net worth at end
of last fiscal year.\
10. Market indications are reliable and relate to comparable risk (in
terms of security and payment priority).\
11. Market indications suggest a fee level no riskier than Standard and
Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
12. Financial statements disclose no basis for doubting reliability of
market indications.

**Non-Financial Institutions Without Market Indications**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or barred from doing business with U.S. Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. In same general line of business at least 3 years.\
5. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
6. Credit report and creditor bank reference contain no material adverse
information.\
7. Audited statements adequately disclose financial condition and were
prepared according to accounting principles that afford a reasonable
basis for reliance on the information provided.\
8. Auditor\'s opinion is either (a) unqualified or (b) qualified with
respect to amounts and circumstances not considered material to
creditworthiness.

> **•Performance Criteria are met, which include the following:**
>
> A. Positive operating profit and net income in each of last 2 fiscal
> years.\
> B. Positive cash from operations in last fiscal year.\
> C. EBITDA/debt service (including Ex-Im Bank debt if more than 25% of
> total debt) is at least 1.5 for last fiscal year.\
> D. Total liabilities (excluding Ex-Im Bank debt) do not exceed 1.75
> times tangible net worth at end of last fiscal year.\
> E. Ex-Im Bank exposure does not exceed 40% of tangible net worth at
> end of last fiscal year.\
> F. Interim statements disclose no material adverse change in financial
> condition**.**

**Corporate and Financial Institution Guarantees**

1\. If primary source of repayment is a start-up company, a guarantor
that meets applicable standards is required.\
2. If ability of primary source of repayment to service its debt is
materially dependent on cash flow from a major expansion or a new line
of business, a guarantor that meets applicable standards is required.

> **Exception:** If ***all of*** the following conditions are satisfied,
> Ex-Im Bank will ***consider processing an application*** for (but not
> necessarily approving) financing without a guarantor for a major
> expansion or new line of business:

A. Applicant can demonstrate that export sale is highly unlikely to
proceed without unguaranteed Ex-Im Bank support. The presence of latent
(i.e., unconfirmed) competition would not be sufficient to satisfy this
condition.\
B. Applicant can provide supplemental information that will include, but
is not limited to, a business plan, feasibility study, technical
information, and financial projections with supporting assumptions and
sensitivity analysis.\
C. Lender and/or borrower agree to bear the cost of all non-standard
documentation and legal expenses related to any security interests and
covenants that Ex-Im Bank may deem necessary.

> 3\. If more than 25 percent of sales of primary source of repayment in
> last fiscal year were to a related or commonly owned company, a
> guarantee of the related or commonly owned company is required.
>
> 4\. If more than 25 percent of purchases of primary source of
> repayment in last fiscal year were from a related or commonly owned
> company, a guarantee of the related or commonly owned company is
> required.

**Personal Guarantees**

1\. For financial institutions, personal guarantees are not required.\
2. For non-financial institutions with sales revenue of at least \$50
million in last fiscal year, personal guarantees are not required.\
3. For non-financial institutions with sales revenue of less than \$50
million in last fiscal year, personal guarantees are required of (a)
individuals with ownership interest exceeding 50 percent and (b) if no
individual owns more than 50 percent, any individual with ownership
interest of at least 20 percent. Personal financial statements are not
required.

**Security Interests and Covenants**

1\. Standard special conditions required for transactions involving the
export of aircraft.\
2. For non-aircraft loans and insurance, required only if deemed
essential to a finding of reasonable assurance of repayment and the
lender and/or borrower agree to bear the cost of all related
non-standard documentation and legal expenses.\
3. For non-aircraft guarantees, required only for transactions that
qualify for exception described in Item 2 of Corporate and Financial
Institution Guarantees.

**Ex-Im Bank Action if Standards are not met**

> 1\. **Consider approval without supplemental information**, if overall
> financial strengths adequately mitigate indicated weaknesses and/or
> uncertainties. For example, if company reported a small net loss in
> next-to-last fiscal year, but meets or exceeds all other standards,
> company will be considered for approval.\
> 2. **Consider approval with supplemental information**, if mitigating
> information regarding indicated risk(s) is readily available and will
> not materially expand the scope of analysis. For example, if company
> reported negative cash flow from operations in last fiscal year, but
> applicant can provide confirmable information on availability of
> adequate credit lines and company meets or exceeds all other
> standards, company will be considered for approval. Ex-Im Bank will
> not request extensive supplemental information.\
> 3. **Require a guarantor** that meets applicable standards.\
> 4. If 1, 2, or 3 is not feasible, Ex-Im Bank will **deny the credit**.
> Applicant will be given an opportunity to withdraw application if
> denial appears likely.

**Attachment A**\
**Medium-Term Credit Standards**\
**Part III**\
**Transactions Greater Than \$5 Million up to and Including \$10
Million**\
**(excluding exposure fee)**

Unless otherwise indicated, the standards apply to the primary source of
repayment, which may be the buyer (insurance only), borrower, or a
corporate or financial institution guarantor.

Notwithstanding the limitations on the scope of analysis for a
particular type of risk, any material adverse credit information known
to Ex-Im Bank at the time of the credit decision must be taken into
account.

\"Small economies\" are designated at [www.exim.gov]{.underline} under
Country and Fee Information, Exposure Fees, Exposure Fee Advice Tables,
next to the name of the country.

**Sovereign Risk**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.

**Political Risk**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
5. Credit report contains no material adverse information.

**Pre-Approved Entities**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Market indications and other available information disclose no
material adverse change in financial condition.

**Financial Institutions With Market Indications**

1.  Domicile acceptable according to Country Limitation Schedule.\
    2. Not suspended or otherwise barred from doing business with U.S.
    Government.\
    3. No unresolved payment issues concerning debts to or guaranteed or
    insured by Ex-Im Bank.\
    4. Potential macroeconomic impact of a transaction in a country
    designated by Ex-Im Bank as a \"small economy\" is acceptable to
    Ex-Im Bank.\
    5. In same general line of business at least 3 years.\
    6. Creditor bank reference contains no material adverse
    information.\
    7. Audited statements adequately disclose financial condition and
    were prepared according to accounting principles that afford a
    reasonable basis for reliance on the information provided.\
    8. Auditor\'s opinion is either (a) unqualified or (b) qualified
    with respect to amounts and circumstances not considered material to
    creditworthiness.\
    9. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity
    at end of last fiscal year.\
    10. Market indications are reliable and relate to comparable risk
    (in terms of security and payment priority).\
    11. Market indications suggest a fee level no riskier than Standard
    and Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
    12. Financial statements disclose no basis for doubting reliability
    of market indications.

**Financial Institutions Without Market Indications**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
5. In same general line of business at least 3 years.\
6. Creditor bank reference contains no material adverse information.\
7. Audited statements adequately disclose financial condition and were
prepared according to accounting principles that afford a reasonable
basis for reliance on the information provided.\
8. Auditor\'s opinion is either (a) unqualified or (b) qualified with
respect to amounts and circumstances not considered material to
creditworthiness.\
9. Performance Criteria, which include the following, are met:

> A. Net income in last fiscal year is at least 1% of average of total
> assets at end of last 2 fiscal years.\
> B. Liquid assets are at least 10% of total assets at end of last
> fiscal year.\
> C. Loan loss reserves are at least 80% of non-performing loans at end
> of last fiscal year.\
> D. Borrowed funds are less than 100% of net loans at end of last
> fiscal year.\
> E. Shareholders\' equity is at least 5% of total assets at end of last
> fiscal year.\
> F. Ex-Im Bank exposure does not exceed 40% of shareholders\' equity at
> end of last fiscal year.\
> G. Interim statements disclose no material adverse change in financial
> condition.

**Non-Financial Institutions With Market Indications**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
5. In same general line of business at least 3 years.\
6. Credit report and creditor bank reference contain no material adverse
information.\
7. Audited statements adequately disclose financial condition and were
prepared according to accounting principles that afford a reasonable
basis for reliance on the information provided.\
8. If (a) more than 25% of sales in last fiscal year were to a related
or commonly owned company, or (b) more than 25% of purchases in last
fiscal year were from a related or commonly owned company, statements
are provided which adequately disclose the consolidated or combined
financial condition, whichever applies, of the primary source of
repayment and the related or commonly owned company (or companies).\
9. Auditor\'s opinion is either (a) unqualified or (b) qualified with
respect to amounts and circumstances not considered material to
creditworthiness.\
10. Ex-Im Bank exposure does not exceed 40% of tangible net worth at end
of last fiscal year.\
11. Market indications are reliable and relate to comparable risk (in
terms of security and payment priority).\
12. Market indications suggest a fee level no riskier than Standard and
Poor's Long Term B, Moody's Long Term B2, or the equivalent.\
13. Financial statements disclose no basis for doubting reliability of
market indications.

**Non-Financial Institutions Without Market Indications**

1\. Domicile acceptable according to Country Limitation Schedule.\
2. Not suspended or otherwise barred from doing business with U.S.
Government.\
3. No unresolved payment issues concerning debts to or guaranteed or
insured by Ex-Im Bank.\
4. Potential macroeconomic impact of a transaction in a country
designated by Ex-Im Bank as a \"small economy\" is acceptable to Ex-Im
Bank.\
5. In same general line of business at least 3 years.\
6. Credit report and creditor bank reference contain no material adverse
information.\
7. Audited statements adequately disclose financial condition and were
prepared according to accounting principles that afford a reasonable
basis for reliance on the information provided.\
8. If (a) more than 25% of sales in last fiscal year were to a related
or commonly owned company, or (b) more than 25% of purchases in last
fiscal year were from a related or commonly owned company, statements
are provided which adequately disclose the consolidated or combined
financial condition, whichever applies, of the primary source of
repayment and the related or commonly owned company (or companies).\
9. Auditor\'s opinion is either (a) unqualified or (b) qualified with
respect to amounts and circumstances not considered material to
creditworthiness.\
10. Ex-Im Bank exposure does not exceed 40% of tangible net worth at end
of last fiscal year.\
11. Ex-Im Bank concludes that entity is creditworthy based on analysis
of its financial statements, supplemental financial information (See
Attachment B), and Ex-Im Bank\'s knowledge of its operating environment.
Scope of analysis will be expanded only for transactions that qualify
for exception described in item 2 of Corporate and Financial Institution
Guarantees.

**Corporate and Financial Institution Guarantees**

> 1\. If primary source of repayment is a start-up company, a guarantor
> that meets applicable standards is required.\
> 2. If ability of primary source of repayment to service its debt is
> materially dependent on cash flow from a major expansion or a new line
> of business, a guarantor that meets applicable standards is required.
> **Exception:** If ***all of*** the following conditions are satisfied,
> Ex-Im Bank will ***consider processing an application*** for (but not
> necessarily approving) financing without a guarantor for a major
> expansion or new line of business:
>
> A. Applicant can demonstrate that export sale is highly unlikely to
> proceed without unguaranteed Ex-Im Bank support. The presence of
> latent (i.e., unconfirmed) competition would not be sufficient to
> satisfy this condition.\
> B. Applicant can provide supplemental information that will include,
> but is not limited to, a business plan, feasibility study, technical
> information, and financial projections with supporting assumptions and
> sensitivity analysis.\
> C. Lender and/or borrower agree to bear the cost of all non-standard
> documentation and legal expenses related to any security interests and
> covenants that Ex-Im Bank may deem necessary.
>
> 3\. If more than 25% of sales of primary source of repayment in last
> fiscal year were to a related or commonly owned company, a guarantee
> of the related or commonly owned company is required.\
> 4. If more than 25% of purchases of primary source of repayment in
> last fiscal year were from a related or commonly owned company, a
> guarantee of the related or commonly owned company is required.

**Personal Guarantees**

1\. If primary source of repayment is a financial institution, personal
guarantees are not required.\
2. If primary source of repayment is a non-financial institution with
sales revenue of at least \$50 million in last fiscal year, personal
guarantees are not required.\
3. If primary source of repayment is a non-financial institution with
sales revenue of less than \$50 million in

> last fiscal year, personal guarantees are required of (a) an
> individual with ownership interest in the primary source of repayment
> exceeding 50% and (b) if no individual owns more than 50%, any
> individual with ownership interest in the primary source of repayment
> of at least 20%. Personal financial statements are not required.

**Security Interests and Covenants**

1\. Standard special conditions required for transactions involving the
export of aircraft.\
2. For non-aircraft loans and insurance, required only if deemed
essential to a finding of reasonable assurance of repayment and the
lender and/or borrower agree to bear the cost of all related
non-standard documentation and legal expenses.\
3. For non-aircraft guarantees, required only for transactions that
qualify for exception described in Item 2 of Corporate and Financial
Institution Guarantees.

**Ex-Im Bank Action if Standards are Not Met**

> 1\. **Require a guarantor** that meets applicable standards.\
> 2. If an acceptable guarantee is not available, Ex-Im Bank will **deny
> the credit**. Applicant will be given an opportunity to withdraw
> application if denial appears likely.

**ATTACHMENT B**\
**EXPLANATION OF TERMS IN PERFORMANCE CRITERIA**\
(Items in Attachment A with an asterisk)

**Part A. FINANCIAL INSTITUTIONS**

> **Shareholders\' Equity, Total Assets**, and **Net Income** are as
> reported in the financial statements.
>
> **Borrowed Funds** are interbank borrowings + notes, bills, and bonds
> payable.
>
> **Net Loans** are loans and advances - general and specific loan loss
> reserves.
>
> **Liquid Assets** are cash + short-term marketable and trading
> securities + government securities + due from banks.
>
> **Loan Loss Reserves** are general and specific reserves available to
> absorb loan and other credit losses.
>
> **Non-Performing Loans** are loans which are not producing current
> income + loans with a high probability of restructuring or loss of
> principal.

**Part B. NON-FINANCIAL INSTITUTIONS**

> **Operating Profit** and **Net Income** are as reported in the
> financial statements.
>
> **EBITDA** (Earnings before interest, taxes, depreciation, and
> amortization) is as reported in the financial statements.
>
> **Debt Service** is interest paid during the most recent fiscal year +
> CMLTD (Current maturities of long-term debt) at the end of the most
> recent fiscal year. If the proposed Ex-Im Bank financing is greater
> than 25 percent of total debt (including short term bank debt, long
> term bank debt, CMLTD, and any other scheduled debt obligations, i.e.,
> scheduled tax obligations or loans from shareholders) at the end of
> the most recent fiscal year, include in Debt Service the amount of the
> Ex-Im Bank financing that would be classified as CMLTD + 12 months of
> interest on the Ex-Im Bank financing.
>
> **Cash From Operations** is as defined using the FASB 95 Indirect
> Method under U.S. GAAP.
>
> **Total Liabilities** are as reported in the financial statements.
>
> **Tangible Net Worth** is shareholders\' equity (as reported) -
> intangible assets such as goodwill, patents, and licenses.

**ATTACHMENT C**\
**SUPPLEMENTAL FINANCIAL INFORMATION**

This Attachment applies to transactions with a financed amount
(excluding exposure fee) of **more than \$5 million** and up to and
including \$10 million **involving non-financial institutions without
market indications**. It does not apply to transactions up to and
including \$5 million or to financial institution, sovereign, political,
or pre-approved risk transactions. Ex-Im Bank has developed these
financial considerations in order to expedite the credit evaluation
process. **If the items listed here are not addressed, the application
may be withdrawn.**

Please address the items according to the following guidance. Indicate
whether the information is attached or not applicable by marking the
appropriate box. Certain items apply to all transactions and are
indicated as \"**Required**\" as indicated.

-   Enclose with your application the information requested in either
    Part A or Part B of this attachment, whichever applies.

-   If the requested information is provided in the notes to the
    financial statements, refer to the notes and indicate the note
    number.

-   If the requested information is provided in a credit write-up that
    is enclosed, refer to the write-up and indicate the page number.

-   Unless otherwise indicated, provide information for each fiscal year
    for which financial statements are submitted, i.e., 2 years of data
    for year-to-year data and 3 years of data for year-end data.

-   Items regarding changes in amounts or percentages refer to changes
    measured in U.S. dollars.

-   A \"change\" means any change, either an increase or a decrease.

**Operating Performance**\
    N/A   Attached\
**1.**
![](media/image1.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image3.wmf)Describe the
expected operational and financial impact of the goods and/or services
being purchased. **Required for all transactions.**

**2**
![](media/image4.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image5.wmf)Describe the
principal customer base, e.g., manufacturers, wholesalers and provide
the percentage of domestic versus export sales and the amount of sales
to each major export market. **Required for all transactions.**

**3.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image6.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image7.wmf)If any customer
accounted for more than 25 percent of sales revenue in the last fiscal
year, provide the customer's name, industry, percentage of revenue,
length of relationship, sales terms, and whether or not the customer is
a related or commonly owned entity.

**4.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image8.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image9.wmf)If sales revenue
changed by more than 15 percent, provide reasons.

**5.** ![](media/image10.wmf)![](media/image11.wmf)Provide the level of
production (in units) for principal product lines for each fiscal year
and, if the production level changed by more than 15 percent, provide
reasons. **Required for all transactions.**

**6.**
![](media/image12.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image13.wmf)For each
component of cost of goods sold for the last fiscal year, provide the
component type, amount, origin (domestic or foreign), and range of terms
offered by suppliers. **Required for all transactions.**

**7.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image14.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image15.wmf)If cost of goods
sold as a percentage of sales revenue changed by more than 5 percent,
provide reasons.

**8.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image16.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image17.wmf)If any
non-operating expense (other than interest or income taxes) represented
more than 20 percent of operating profit, describe the expense.

**9.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image18.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image19.wmf)If an operating
loss or a net loss was incurred, provide reasons.

**Balance Sheet**

    N/A   Attached\
**10.**
![](media/image20.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image21.wmf)If total
investments were more than 15 percent of total assets at the end of the
last fiscal year, provide for each investment the type, amount,
currency, security issuer, and/or company owned.

**11.**
![](media/image22.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image23.wmf)If there has been
a change of more than 20 percent in receivables days-on-hand, provide
the reasons and the range of terms granted for trade receivables.

**12.**
![](media/image24.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image25.wmf)If aggregate
related company receivables, commonly owned company receivables, and
non-trade related receivables exceeded 15 percent of total assets,
provide the amount and purpose of each category of receivables.

**13.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image26.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image27.wmf)If inventory was
more than 20 percent of total assets at the end of the last fiscal year
and/or inventory days-on-hand increased more than 20 percent, provide
reasons.

**14.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image28.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image29.wmf)If payables
days-on-hand increased more than 20 percent, provide reasons and the
terms granted by each supplier which represented more than 20 percent of
payables.

**15.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image30.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image31.wmf)If capital
expenditures anticipated during the next 2 fiscal years exceed 15
percent of net fixed assets at the end of the last fiscal year, provide
the amount, purpose, and financing plans for the capital expenditures.

**16.**
![](media/image32.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image33.wmf)Provide the
source, amount, currency, terms, and security/guarantees for credit
lines available from financial institutions and credits owed to
financial institutions. **Required for all transactions.**

**17.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image34.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image35.wmf)Provide the
aggregate amount of principal maturities due to all creditors in each of
the next five fiscal years.

**18.**
![](media/image36.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image37.wmf)Provide the
source, amount, and dates of equity cash infusions in each of the last
three fiscal years and anticipated during the next fiscal year.
**Required for all transactions.**

**19.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image38.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image39.wmf)If any asset,
liability, or equity account represented more than 15 percent of total
assets and has not been previously described, provide the amount and a
description of the accounts.

**Off Balance Sheet Items**

    N/A   Attached\
**20.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image40.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image41.wmf)If the aggregate
amount of contingent/off balance sheet items was more than 10 percent of
total assets at the end of the last fiscal year, provide a description
of the items.

**Interim Statements**

    N/A   Attached\
**21.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image42.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image43.wmf)Explain any
material changes in the interim financial statements relative to the
statements for the last fiscal year. This item **not applicable only**
if interim statements are not required.

**Subsequent Events**

    N/A   Attached\
**22.** ![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image44.wmf)![](media/image2.png){width="1.0416666666666666e-2in"
height="1.0416666666666666e-2in"}![](media/image45.wmf)Provide details
of events subsequent to the end of the last fiscal year which could have
a material effect on the creditworthiness of the company, and plans to
deal with any material adverse changes. If no material events exist
insert \"none\" \_\_\_\_\_\_\_\_\_\_\_\_\_.

Ex-Im Bank Guidelines for

Medium-Term Higher Risk Private Sector Transactions

Attachment D

> There are many feasible business opportunities involving medium-term
> higher risk private sector transactions.
>
> Ex-Im Bank defines higher risk transactions under the medium-term
> insurance and guarantee programs as non-aircraft, non-sovereign
> transactions including one or more of the following characteristics:
> markets where the exposure fee level is 7, countries with a CLS
> footnote 4 (i.e., typically requiring a commercial bank as obligor or
> guarantor), or transactions where used equipment is the export
> product. To address the issues involving higher risk transactions,
> Ex-Im Bank has formalized underwriting guidelines[^1] for medium-term
> higher risk private sector transactions. These guidelines are intended
> to both catalyze Ex-Im Bank's support for higher risk export
> opportunities as well as promote efficiency in case processing and
> improved customer service by providing applicants with guidance for
> satisfying Ex-Im Bank's information requirements for these types of
> transactions.
>
> These higher risk guidelines apply to transactions involving either:

-   *Countries with an exposure fee level of 7, where the transaction
    does not have an acceptable bank guarantee; or*

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```
-   *Countries with a CLS footnote 4, where the transaction does not
    have an acceptable bank guarantee*

> The guidelines will apply to all such applications involving used
> equipment and may also apply to new equipment/services transactions as
> well.

### 1) Financial Statements on the PSOR for higher risk transactions

> For markets where a CLS footnote 4 is applicable, Ex-Im Bank will
> typically require a financial institution as the obligor or guarantor.
> For non-financial institution borrowers that Ex-Im Bank deems
> ***creditworthy*** (i.e., does not require a bank guarantee) in CLS
> footnote 4 markets or borrowers in exposure fee level 7 markets, Ex-Im
> Bank may consider: (a) three years of financial statements, including
> notes, ***audited** by a company that is affiliated with an
> international accounting firm* (which would be Ex-Im Bank's
> preference) or (b) alternatively, due to the additional costs related
> to this type of auditor, Ex-Im Bank may consider financial statements
> audited by a verifiable, properly accredited regional/local company if
> the following is included in the application:

a.  The auditing firm satisfactorily completes the Ex-Im Bank
    questionnaire for auditing companies (please see the attachment);

b.  A lender's call report on the primary source of repayment (PSOR)
    that includes information on the visit as well as a written
    statement from the lender that its visual observation of the PSOR's
    premises comport with the PSOR's financial statements; and,

c.  A call report from the lender demonstrating that it has visited the
    local auditor's office and has discussed with the auditor the
    latter's responses to the Ex-Im Bank questionnaire.

d.  If a lender's visits to the PSOR (item b above) and the auditor
    (item c above) are not feasible, the lender should provide the
    following: (1) documentation describing its knowledge of the auditor
    and (2) information demonstrating how it became comfortable with the
    auditor. Regarding item (2), the lender can provide two recent
    references that are acceptable to Ex-Im Bank from the auditor's
    clients (which should be multinational corporations, major local
    corporations or financial institutions where audits were done); or,
    if Ex-Bank has received such information on a prior transaction and
    the information is still current, the latter may obviate the need
    for a visit.

### 2) Additional information to be provided in the application for a higher risk transaction

-   [Customer Background]{.underline}

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-   It is strongly desirable that the lender (e.g., an officer of the
    lender and not an agent) or the exporter visit the borrower/PSOR at
    least once within six months prior to the application being
    submitted to Ex-Im Bank and provide a call report of such visit in
    the application or; alternatively,

-   The lender should provide written documentation demonstrating how
    they know their customer.

-   The lender should provide specific information on the manner in
    which the transaction was originated.

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```
-   [Information on Agents]{.underline}

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-   Background information on any local agent involved in the
    transaction (i.e., a biographical sketch, resume, etc.)

-   Information regarding the amount of fees the agent is receiving
    (i.e., whether the fees are for originating, obtaining an Ex-Im Bank
    approval, or monitoring the transaction after approval to avoid
    claims)

-   Identification of which parties are paying the agent on the
    transaction

-   Description of the due diligence undertaken in selection of the
    agent

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```
-   [Borrowing or Account Relationships]{.underline}

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-   Does the lender have any borrowing or account relationships with the
    PSOR? If yes, the lender needs to provide details.

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```
-   [Assessment of Cash Position]{.underline}

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-   Do the financial statements demonstrate a sufficient level of cash
    to make the down payment? The application should include information
    on how the borrower/buyer will pay for the down payment, legal fees
    and custom duties.

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```
-   [Market has experienced or is likely to experience significant
    depreciation in currency]{.underline}

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```
-   If the market has experienced significant depreciation in the
    currency during the period under review or there is a risk of such
    occurrence during the debt servicing period of the subject
    financing, the borrower/PSOR should provide information regarding
    how it hedges such foreign currency risk.

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```
-   Also, if the borrower/PSOR imports any of its inputs (i.e.,
    inventory, raw materials, etc.) it should indicate what countries it
    imports from and the percents of such foreign inputs represent of
    its total inputs.

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-   If the borrower/PSOR has any foreign denominated debt, then it
    should indicate the currency of such debt and its debt profile.

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```
-   [References]{.underline}

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-   If the application does not include a current credit financial
    institution reference due to no bank borrowing relationship, the
    applicant should provide at least two supplier references on the
    borrower/PSOR's from suppliers that represent the two largest
    accounts of the borrower/PSOR's accounts payable. Such favorable
    references should have the following information:

1.  Current: dated within six (6) months of the application

2.  Verifiable source (on letterhead of supplier)

3.  References which reflect extension of credit

4.  Contain the following information: Years of experience with
    borrower/PSOR, payment terms, annual sales to borrower/PSOR, date of
    last sale, recent high credit, current outstanding amount, past due
    amount (if any), days past due, experience

###  Identification of the Borrower and guarantors

-   In order for the application to be technically complete, the lender
    should provide documents which evidence the location and street
    addresses of the borrower and guarantors (i.e., copy of a bank
    statement, lease agreement etc.).

> 3\) [Structure of Higher Risk Transactions]{.underline}

-   Special Conditions that may apply to higher risk transactions

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-   [Personal guarantees]{.underline}: For higher risk transactions any
    individual owning 20% or more will provide their personal
    guarantees.

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-   [Quarterly payments]{.underline}: Where appropriate, transactions
    may be structured with quarterly payments.

-   [Evidence of cash payment]{.underline}: If the financial condition
    (i.e., minimal cash position) of the PSOR does not show the ability
    to pay the cash payment, custom duties, legal fees, etc., Ex-Im Bank
    may require the following special condition: Prior to disbursement,
    the lender shall obtain evidence that the 15% cash payment has been
    paid in cash by the buyer to the exporter (e.g., commercial bank
    advice of payment). Although the exporter typically will not be
    permitted to provide financing for the 15% cash payment if this
    special condition is used, a local bank may provide such financing.

-   [Registration of promissory note, personal guarantees and
    liens]{.underline}: If Ex-Im Bank determines that registration of
    certain debt documents are required in a market, then the lender
    will be required to undertake such debt registrations of the
    promissory note, personal guarantees, liens, etc.

    -   Special conditions that may apply to used equipment for higher
        risk transactions

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```
-   [Debt obligation is separate from the equipment/services export
    contract]{.underline}: The borrower shall provide to the lender a
    written statement by an authorized official of the PSOR (indicate
    name of the company) that the latter understands that the debt
    obligation is separate and independent from the equipment/services
    contract and exporter performance, and that the PSOR (indicate name
    of the company) is obligated to make timely payments under the debt
    instrument no matter what events may or may not occur under such
    export contract.

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-   [Inspection]{.underline}: The lender shall cause the buyer to
    inspect the used equipment in the U.S. After such inspection, the
    buyer would have to sign and date a certificate which documents that
    the equipment has been inspected and that the equipment matches what
    the buyer in the contract requested (i.e., manufacturer, model,
    year, miles/operating years, special accessory list, serial number,
    etc.). The lender or the insured shall obtain a copy of these signed
    and dated inspection documents prior to disbursement. If there are
    any changes in the equipment being procured, such changes shall also
    be inspected by the buyer. Such inspection and documentation of the
    results of such inspection shall be provided to the lender prior to
    disbursement.

> In circumstances where the buyer/borrower may not be able to travel to
> the U.S. to inspect the equipment in a timely manner in order to meet
> shipping schedules, Ex-Im Bank may allow the inspection of the
> equipment by an independent third party in the U.S., with the results
> of such inspection being provided to the lender prior to disbursement.

Auditing Firm Questions

1.  Please provide a detailed written profile of the auditing firm, if
    available.

2.  When did the auditing firm begin operations?

3.  What other services does the firm provide?

4.  How many auditing clients does the firm have? How many clients does
    the firm have for other services such as accounting services and
    consulting services?

5.  What is the size of the firm in terms of number of employees? How
    many staff is in each of the following categories: administrative
    staff, junior accountant or trainee, senior accountant, manager, and
    partner? What qualifications (level of education, number of
    qualifying exams passed, professional certification \[i.e., CPA or
    equivalent\] and experience) does each individual have?

6.  Describe the continuing education undertaken by the firm's staff
    (including partners).

7.  Please indicate the firm's or its staff's membership or
    participation in any peer groups or professional associations.

8.  Please list some of the firm's larger clients or, if possible,
    supply a client list.

9.  Does the firm audit any multi-national corporations or institutions?
    If so, please list them.

10. Please provide two recent references from the firm's larger clients
    and /or multi-national corporations or financial institutions where
    audits were involved.

11. Please describe the firm's office facilities (e.g., how many
    computers, is there a separately dedicated fax and phone line, what
    kind of accounting software is used, does the firm use e-mail,
    etc.?).

12. Please describe the firm's audit processes and methodology. What
    steps does the firm undertake when auditing a client? For example,
    does staff go to the premises of the client? If so, how many staff
    and what kind of staff (junior auditor, senior auditors, partners,
    etc.) go? Who is eligible to sign-off on the audit?

13. Please describe any fines or judgments that have been placed against
    the firm by professional associations, the judicial/court system or
    the government.

14. What steps does the firm take to prevent fraudulent use of the
    firm's name (e.g., letterhead and stamp)?

15. Do the firm's auditors specialize in sectors (financial services,
    telecom, oil and gas, manufacturing, etc.).

[^1]: Sovereign, aircraft, and bank guarantee transactions are exempt
    from these guidelines.