Only Coverage Under certain circumstances, Ex-Im Bank may guarantee only the specific political risk of expropriation of the asset by the lessee's government. This special coverage may be required to be tied to an insurance policy issued by a private insurer. There is no cash payment required on an operating lease, but most provide for advance deposits and rentals equaling four or five percent of the lease contract. For a finance lease, Ex-Im Bank requires the lessee to make a 15 percent cash payment of the lease contract. The repayment frequency may be no more than monthly and no less than semiannually.
Terms vary with the percentage of the asset cost that is covered by the lease contract.
If, for example, the principal portion of the lease amortizes 50 percent of the asset value, then the term of the lease generally will be limited to no longer than 50 percent of the equivalent sale term for such an asset. The lessor must provide Ex-Im Bank with a lease amortization schedule that shows the stream of lease payments broken down by principal and interest to be paid by the lessee. The schedule must also explain how that interest was calculated and what the lessor's pretax and aftertax interest yield will be. In case of default, Ex-Im Bank will pay claims in the selected currency. Fees Fees for the expropriation guarantee will be negotiated, based on the private market rate for such coverage.