The LMA launches a new Export Credit Agency Buyer Credit Facility Agreement25 April 2018
The LMA is pleased to announce the launch of a new recommended form of facility agreement for use in export finance buyer credit transactions supported by an export credit agency (the "ECA Buyer Credit Facility").
The ECA Buyer Credit Facility project was begun in response to demand from the market to provide a form of export credit agency ("ECA") supported buyer credit agreement. Such loan documentation often contains boilerplate language from the LMA documents, however, there are divergences in approach to provisions in loan documentation between ECAs on which it was thought to be helpful to get a common starting point in order to promote efficiency and liquidity in the market. From an early stage it was recognised that the nature of ECA supported finance transactions was such that it would be very difficult to produce a document which was in any way "standard". In particular, it was accepted that any document which was produced would need to be adapted so as to be tailored to the particular transaction structure, the particular ECA and the jurisdictional and export related specifics of each transaction. However, it was still felt that it would be a step forward in promoting the efficiency of the market if a document was produced which was a good starting point for the draftsman.
The ECA Buyer Credit Facility takes as its starting point the Unsecured Single Currency Term Facility Agreement For Use In Developing Markets Jurisdictions and seeks to provide for a typical export credit agency supported buyer credit structure.
The ECA Buyer Credit Facility was put together by an experienced working party, consisting of representatives from banks (including in-house lawyers) and major City law firms active in the ECA market, and certain export credit agencies. The ECA Buyer Credit Facility is focused on the European market, and the LMA involved the major European ECAs as part of the project (including SACE, Euler Hermes, UK Export Finance, Finnvera, EKF, SEK, Credendo and CESCE, with the Berne Union participating as an observer. There are differing approaches to review of documentation between ECAs and the ECA Buyer Credit Facility is not intended to interfere with the positions taken by the ECAs or alter allocation of documentation risk. In addition, involvement of any ECA with the ECA Buyer Credit Facility does not mean that an ECA has accepted the documentation or that it complies with their own policies / documentation. However, the ECA Buyer Credit Facility is a helpful step forward in producing a good starting point for negotiation and promoting efficiency in the export finance buyer credit market.
Commenting on the document, Clare Dawson, LMA Chief Executive, said:
"ECAs play a vital role in supporting international trade. The production of recommended form documentation supporting the export credit market is an important progression to support our members and international trade by enhancing efficiency and liquidity in the market, which is a key commitment for the LMA. This project was seen as being particularly desirable given the increased size of some ECA backed deals, which require syndication across the market.
We would like to thank the Working Party members for their support for this project, and particularly the engagement of the ECA's. This has been an excellent example of pan-European cooperation between the public and private sector to support the development of international trade. We look forward to a continuing dialogue on future export finance documentation."
Click here to access the documents.