For example, a country may have a very low (good) OECD rating due to a strong creditworthy sovereign, but have a weak legal or regulatory environment. Other types of fees associated with a project financing such as outside legal, financial, and technical advisors to EXIM Bank are not included in our all-in-cost fee analysis to meet the MPB.ĭue to the nature of limited-recourse project finance, and its reliance on complex contractual structures for repayment rather than a creditworthy sovereign or private sector borrower, the pricing of project finance transactions may differ significantly from the fees charged for standard export credits. Rather, the total nominal value of all fees charged as a percent of the amount EXIM Bank finances (excluding the exposure fee) must be equal to or greater than the MPB. The MPB regime does not distinguish between commitment fees and exposure fees. Limited-Recourse Project Finance Pricing: An OverviewĮXIM Bank charges two types of fees for project finance transactions - commitment fees and exposure fees. Establishing Permitted Exceptions, which allow discounts to the minimum rates in certain narrowly defined scenarios.guarantees, quality of coverage, etc.)3 and, Applying surcharges or discounts to the premium rates to account for differences among export credit agency products (insurance v.
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Establishing minimum premium rates for each category of risk.Classifying countries into seven categories of risk.ECAs can, however, set fees at their discretion above the minimums.
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Generally, ECAs cannot charge below the MPB unless the project qualifies for a Permitted Exception2. The MPB rules provide a price floor, which should prevent variations in total fees, charged by competing export credit agencies (ECA) for officially supported financing. The principles set minimum premium benchmarks (MPBs) for sovereign and country credit risks, regardless of whether the buyer or borrower is a private or public entity. China & Transformational Exports Program (CTEP)ĮXIM Bank pricing policies for project finance transactions are designed to comply with the OECD Arrangement pricing rules, which came into effect April 1, 1999.1 The intent of the rules is to level the playing field with respect to fees charged for officially supported export credits.Environmental or Social Impact Questions or Concerns.Credit Administration and Disbursements.
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