Export Credit Facility Agreement

by on September 19, 2021

ECAs are therefore becoming major players in the international financing of projects and in export. ECAs such as ex-Im Bank help fill the financing gap that private lenders create through their inability or unsaccoy to provide financing. They help all products and services compete globally. Export credit agencies (ECAs) play a crucial role in supporting international trade. Countries provide officially supported export loans through ECAs to support their exporters. ECAs can be public institutions or private companies acting on behalf of governments. The assistance they provide may include direct loans, credit insurance and/or financial guarantees as part of financing. In any case, most ECAs do not agree to take a documentary risk and, therefore, assisted lenders must be sure that the requirements of the Security Court have been met. It is important to note that the documentary risk associated with ECA-based transactions constitutes lender risk and the LMA stressed that the new credit agreement should not change this situation (nor does it change it). The ECA officially in the United States is the Export Importing Bank of the United States (EXIM, an independent executive agency. According to EXIM, one of its main tasks is to “create a level playing field” when U.S. exporters are “facing foreign competition supported by other governments.” To achieve this, it will “adapt or thwart the funding of about 85 ECAs around the world”. However, it is difficult to imagine how the new form of ECA in LMA`s credit agreement will actually serve as a precedent, as does its leveraged credit agreement, for example.

There is a wide range of transactions supported by the ECA, not to mention the fact that each ECA will also have its own bespoke hedging requirements…

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