Repayment for The Export-Import Bank of China

 

 

Philippa Brant , 

Researcher on Chinese foreign aid gave me the following information

The Export-Import Bank of China Founded in 1994, the Export-Import Bank of China is a state bank solely owned by the Chinese government. Its international credit ratings are compatible to the national sovereign ratings. The Bank is headquartered in Beijing. By the end of 2010, the Bank has eighteen domestic business branches, and three overseas representative offices, namely the Representative Office for Southern & Eastern Africa, Paris Representative Office and St. Petersburg Representative Office. At present, it has established correspondent relationship with more than 500 banks.

Mission The Bank's main mandate is to facilitate the export and import of Chinese mechanical and electronic products, complete sets of equipment and new-and high-tech products, assist Chinese companies with comparative advantages in their offshore contract projects and outbound investment, and promote Sino-foreign relationship and international economic and trade cooperation.

Business Scope ■Export credit and import credit;
■Loans to overseas construction contracts and Loans to overseas investment projects;
■Chinese Government Concessional Loan;
■International guarantee;
■Onlending loans from foreign governments and international financial institutions;
■International and domestic settlement and corporate deposits under the loan facilities provided by the Bank;
■Raising funds in domestic and international capital markets and money markets;
■International inter-bank loans, organizing or participating in international and domestic syndication loans;
■Renminbi inter-bank borrowing/lending and bond repurchases;
■Foreign exchange transaction and approved risk-protection foreign exchange (FX) business for client;
■Creditworthiness investigation, consultation, appraisal and witness services which are relevant to the Bank's business;
■Other business approved or entrusted.
We look forward to establishing extensive contact and expanding cooperation with friends in financial, economic, and trade sectors both at home and abroad.

 

Export Buyer's Credit refers to the medium and long-term credit provided to foreign borrowers to finance their imports of Chinese products, technologies and services. The Credit is designed to facilitate foreign importer's (or project owner's) payment at sight of commercial contract to Chinese exporters (or contractors).
Credit CoverageExport Buyer's Credit is mainly extended to finance exports of Chinese products, technologies and services as well as overseas construction projects that can facilitate Chinese exports of equipment, construction machinery, materials, technical and managerial expertise, and labor services.
Application Requirements
The borrower can be a foreign importer (project owner), a foreign financial institution, or the Ministry of Finance or other authorized institutions of the importing country, which are acceptable to the Bank.The exporter should be an independent legal entity with export license and the ability to perform commercial contracts.
To apply for export buyer's credit, the following documents need to be provided:
1)Loan Application;
2)Draft commercial contract, letter of intent and other contractual documents;
3)Necessary project feasibility study report;
4)Necessary approval and evidentiary documents provided by competent government authorities of both China and the importing country;
5)Documents that demonstrate the credit standings and operations of the borrower, the guarantor, the importer and the exporter, as well as audited financial statements of the borrower and the guarantor (excluding government authorities) over the past three years;
6)For RMB-denominated export buyer's credit, application for opening bank settlement account and relevant evidentiary documents need to be provided;
7)In the case of mortgage or pledge, valid ownership certificates for the property under mortgage
or pledge and evaluation reports need to be provided; and
8)Documents of intent on credit insurance (if such an insurance is required);
9)Other documents deemed necessary by the Bank.

The following requirements shall be satisfied when applying for Export Buyer's Credit:
1.The economic and political environment of the borrower's country should be stable;
2.The borrower should demonstrate sound credit standing and good debt servicing capacity;
3.The value of the commercial contract shall exceed USD 2 million, and the export project shall fall into the financing area of this credit;
4.The Chinese content of export products should be no less than 50% of the total contract value. For the overseas contracting projects, no less than 15% of the project shall come from the export of Chinese equipment,construction mechanics, materials, engineering work, technical and managerial expertise, and labor services;
4.The borrower shall provide a repayment guarantee acceptable to the Bank;
5.Export credit insurance shall be sought if required;
6.Other requirements the Bank deems necessary.
Terms and Conditions
Currency
The currency of the loan could be US Dollar or other foreign currencies acceptable to the Bank. The Bank can also provide RMB-denominated export buyer's credit according to relevant rules and regulations.
Financing Amount
Credit for ship exports shall not exceed 80% of the total contractual value,and credit for other exports and overseas contracting projects and other export projects shall not exceed 85% of the total contractual value,
Maturity
The tenor shall be calculated on the cash flows projection of each project.The maximum tenor, starting from
the date of the first drawdown till the last repayment date, shall not exceed 15 years in principle. Within
the repayment period, the borrower shall repay semi-annually in equal installments unless otherwise specified.
Interest Rate
The interest rate of foreign currency-denominated credit could be either a fixed or floating interest rate in
accordance with relevant rules and regulations of the Bank. The interest rate of RMB-denominated credit shall
follow relevant rules and regulations.
Fees
China Eximbank will charge management fees, commitment fees and other fees relevant to the loan. For projects not covered or partially covered by export credit insurance, the Bank will charge exposure fees on the exposed part of the loan. Rates for individual projects are decided in accordance with relevant rules and regulations of the Bank.
Loan Application and Approval
The following documents shall be provided:
1.Loan application letter;
2.Draft commercial contract, letter of intent, tendering and bidding documents;
3.Feasibility study report of the project;
4.Relevant approval documents from Chinese government authorities and the host country of the project;
5.Documents that demonstrate the credit standing of the borrower, the guarantor, the importer (or project owner), and the exporter (or contractor);financial statements of the borrower and the guarantor (government agencies excluded);
6.For RMB-denominated export buyer's credit, application for opening bank settlement account and relevant documents
shall be provided;
7.In the case of mortgage or pledge, ownership certificates and necessary evaluation reports thereof shall be submitted;
8.Other documents the Bank deems necessary.
China Eximbank will examine, in accordance with regulated procedures, the application documents submitted by the borrower,negotiate with the borrower on the terms and onditions, and complete the loan approval procedure.
For large-size contracting projects, manufacturing projects or projects with omplicated structure, external professionals or agencies could be employed for consultation and demonstration and due diligence investigation.
Loan Disbursement and Repayment
Upon approval of the loan, the Bank and the borrower will sign loan agreement and other relevant legal documents, complete guarantee procedures and the transfer of rights and interests.When the loan agreement enters into effect and the drawdown conditions are satisfied, the Bank shall make disbursement to the borrower in accordance with the disbursement procedures stipulated in the loan agreement.
1.A commercial contract is signed between the exporter and the importer. The value of the contract should be no less than USD 2 million.
2.A loan agreement is signed between China Eximbank and the borrower. The loan amount should not exceed 85% of the commercial contract value while 80% in the case of a ship export project.
3.Repayment guarantee provided by the guarantor to China Eximbank or other security measures adopted on a case-by-case basis.
4.Export credit insurance or political risk insurance be provided if the Banks deems necessary on a case-by-case basis.
5.The down payment should not be less than 15% of the commercial contract and no less than 20% for ship export project.
6.The exporter delivers goods to the importer as stipulated in the commercial contract.
7.China Eximbank make disbursements in accordance with the loan agreement after the delivery of goods.
8.The borrower pay to China Eximbank relevant fees and interests, and repays the principal semi-annually in accordance with the provisions of the loan agreement.