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Home > Project Financing  > Buyer's Credit


Export Buyer's Credit

The Export Buyer's Credit refers to the medium and long-term credit offered by the Bank to creditworthy foreign borrowers to support the export of Chinese capital goods, services and overseas construction projects. With a competitive interest rate and a longer period of time, the Export Buyer's Credit can facilitate foreign importers to make prompt payment to Chinese exporters for the exported products and services. The operations generally follow the Arrangement on Guidelines for Officially Supported Export Credits as developed by OECD.

1.Products and Services Covered by the Credit

Export Buyer's Credit is mainly extended to finance the export of Chinese capital goods such as mechanic and electronic products and complete sets of equipment. It is also available for financing the export of Chinese-built ships, high- and new-tech products & services, and overseas construction projects contracted by Chinese companies.

2.Requirements for Application

The Borrower

The borrower should be a foreign importer, or the importer's bank, or Ministry of Finance of or other authorized government institutions of the importing country, and should be acknowledged by China Eximbank. The borrower should have reliable credit standing, and should be capable of repaying all the principals and paying the accrued interests and related fees and charges of the loan as prescribed in the agreed repayment schedule.

The Exporter

The exporter should be an independent legal entity with the acceptable qualification of dealing export operations or overseas projects as verified by authorized Chinese government authorities, and should be capable of implementing the commercial contract. The goods and services exported should fall within the support list of Export Buyer's Credit operated by China Eximbank.

Commercial Contract

The commercial contract that seeks for export buyer's credit should be examined and approved by the Bank, and should satisfy the following requirements:

The value of the commercial contract should be more than USD 2 million.
The portion of the Chinese content of exported goods should be no less than 50% of the total value.
The cash payment (down payment) made by the importer to the Chinese exporter should not be less than 15% of the total contract value or 20% in the case of ship export contract.

The requirement of the Chinese content portion and the down payment percentage on overseas construction projects should be consistent with relevant policies and guidelines set by the Chinese government.

Subject to the credit policy of the Bank, the borrower is required to provide a repayment guarantee, and when necessary, a sovereign guarantee of the importing country should be provided.

Whether it is necessary to apply for export credit insurance should be decided by the Bank in accordance with the country risk of the borrower.

3.Credit Terms and Condition

Loan Currency

The currency of the loan could be either US Dollar or other currencies acceptable to China Eximbank.

Loan Amount

Generally, the Export Buyer's Credit provided by the Bank for an export project of goods or services shall not exceed 85% of the total contract value, and 80% in the case of a ship export contract. As for an overseas contracting project, the loan amount should follow the regulations of state relevant policies.

Maturity Period

The maximum maturity period is 15 years from the date of the first disbursement of the loan to the last repayment date as stipulated in the loan agreement.

Interest Rate

The interest rate could be either a fixed interest rate on the basis of the Commercial Interest Reference Rate (CIRR) as monthly announced by OECD, or a floating interest rate on the basis of London Interbank offered Rate (LIBOR) plus a certain interest rate spread. For special cases, the interest rate could be negotiated and decided between the lender and the borrower.

Drawdown of the Loan

The availability of drawdown under the loan agreement shall be consistent with the terms and conditions of the commercial contract related.

Fees & Charges

The borrower shall pay management fees, commitment fees and exposure fees to China Eximbank.

Loan Application and Approval

An eligible borrower should submit a formal application to China Eximbank for Export Buyer's Credit together with the following documents and materials:

Draft commercial contract or letter of intention, Tendering and bidding documents, feasibility study report on the project and relevant approval documents;
Documentation that proves the credit standing of the borrower, the guarantor, the importer and the exporter; the financial statements of the borrower and the guarantor;
Other documents and materials required by the Bank.

China Eximbank will examine the application documents submitted by the borrower, confirm the qualification of the borrower and the guarantor, decide credit terms and conditions, and start project appraisal and approval process. Upon approval of the loan, China Eximbank will sign with the borrower a loan agreement on Export Buyer's Credit, and the guarantor will present to the Bank a Repayment Letter of Guarantee.

Loan Disbursement and Repayment

China Eximbank shall disburse the loan to the borrower as prescribed in the loan agreement.

The borrower shall repay to the Bank the principal and pay the interests together with relevant fees of the loan as stipulated in the loan agreement. Unless otherwise specified, once the drawdown period is over, the principal of the loan should be repaid semi-annually in equal installments. The interests incurred should be either paid semi-annually as calculated on the basis of the loan outstanding or follow the terms stipulated in the loan agreement.

Working Procedures

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 may be required according to the project case by case.

4. Whether to require export credit insurance or not shall be determined by China Eximbank according to the country risk of the importing country.

5. The down payment should not be lower than 15% of the commercial contract value and no less than 20% for a ship export project.

6. The exporter delivers goods to the importer as stipulated in the commercial contract.

7. China Eximbank disburses the loan after the delivery of the goods.

8. The borrower shall semi-annually repay to China Eximbank the principal, the interests and all the fees and charges of the loan in accordance with the provisions of the loan agreement

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