[Federal Register Volume 86, Number 244 (Thursday, December 23, 2021)]
[Notices]
[Pages 72967-72968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27835]



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EXPORT-IMPORT BANK


Information Request on Potential Parameters of Export-Import Bank 
Financing for Domestic Projects

AGENCY: Export-Import Bank of the United States.

ACTION: Notice.

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SUMMARY: The Export-Import Bank of the United States (EXIM) is 
soliciting comments and feedback concerning a recommendation resulting 
from Executive Order 14017 on America's Supply Chains. The report 
``Building resilient supply chains, revitalizing American 
manufacturing, and fostering broad-based growth'', recommends that EXIM 
consider developing an option to provide financing in support of the 
establishment and/or expansion of U.S. manufacturing facilities and 
infrastructure projects in the United States that would facilitate U.S. 
exports.
    EXIM requests:
    (1) Comments on the usefulness of such an option and need for EXIM 
to extend its medium and long-term loans and guarantees to domestic 
projects as described in the E.O. 14017 Report recommendation; and
    (2) Feedback on the hypothetical parameters of such an EXIM program 
as described in the ``supplementary information'' below.

DATES: Consideration will be given to all written comments received by 
January 20, 2022.

ADDRESSES: Interested parties may submit comments on this transaction 
electronically on www.regulations.gov. To submit a comment, enter 
``Information Request on Potential Parameters of Export-Import Bank 
Financing for Domestic Projects'' under the heading ``Enter Keyword or 
ID'' and select Search. Follow the instructions provided at the Submit 
a Comment screen. Please include your name, company name (if any) and 
``Information Request on Potential Parameters of Export-Import Bank 
Financing for Domestic Projects'' on any attached document. Comments 
can also be sent by email or mail to Scott Condren, 
[email protected], Export-Import Bank of the United States, 811 
Vermont Ave. NW, Washington, DC 20571.

FOR FURTHER INFORMATION CONTACT: Scott Condren by telephone at 202-565-
3777 or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On June 8th, 2021, the White House released a report 
``Strengthening America's Supply Chains'' which recommended that

    EXIM develop a proposal for Board consideration regarding 
whether and how to implement a new Domestic Financing Program to 
support the establishment and/or expansion of U.S. manufacturing 
facilities and infrastructure projects in the United States that 
would support U.S. exports. The proposal would support and 
facilitate U.S. exports while rebuilding U.S. manufacturing capacity

    This notice seeks comment on the value of expanding EXIM's foreign 
buyer financing program to include domestic transactions, and feedback 
on the hypothetical parameters such as described below. In general, 
this notice only describes where transactions would face different 
requirements or standards from EXIM's medium and long-term overseas 
support. Terms, conditions, and requirements not addressed here, such 
as additionality, should be presumed to be the same as EXIM's standard 
export credit offering.

Hypothetical Parameters

    Export Nexus: EXIM can only support transactions that have a nexus 
to exports. Foreign ECAs tend to require as a standard (but not 
rigorously applied minimum) 20% content for their export transactions. 
Moreover, the British have created a domestic financing program for 
companies that have an export ``basis'' that requires at least 5% of 
annual revenues in any three-year period be from exports, or 20% in one 
of any three years. EXIM may consider projects between a 25-50% export 
nexus for support. For example, 25% of a project's production (e.g., 
goods produced at an EXIM-supported manufacturing facility) or capacity 
(e.g., 25% of the traffic at a port) would need to be for export for 
the transaction to eligible. This export connection could stretch back 
through a supply chain and account for ``indirect exports''. For 
example, if a company sells 50% of its output to a domestic company, 
which in turn uses 50% of the supplier's inputs for exports, this 
transaction would meet the 25% threshold.
    Pricing: Because financing with no direct export component is not 
considered official export financing, EXIM's financing would not be 
subject to the Organisation for Economic Co-Operation and Development 
(OECD) Arrangement terms and conditions. However, supporting domestic 
transactions that facilitate exports must comply with both EXIM's 
budget and World Trade Organization (WTO) rules. The former requires 
transactional ``break even''; the latter which would require EXIM to 
provide ``market'' pricing. EXIM may meet both tests via one of two 
approaches:
    (1) Direct Market Proxy: There are several options, including 
lending on identical terms and conditions (or provide cover so that the 
buyer faces identical all-in pricing on both covered and uncovered 
tranches) as part of a syndicate, price using issuer specific credit 
default swaps (CDS) or price using comparable public bond information.
    (2) Implicit Market Benchmark: In cases where there is no direct 
market benchmark (e.g., no debt of a comparable term exists), EXIM may 
as a back-up utilize the OECD ``Through the Cycle Market Benchmark'' 
pricing methodology. This methodology uses commercial pricing 
information to generate market reflective pricing for a wide range of 
tenors and credit ratings.
    Jobs supported: EXIM may connect to its jobs mission by scaling its 
financing in relation to the number of U.S. jobs such financing would 
support. For purposes of calculating maximum support, EXIM may include 
the U.S. jobs involved in construction of the project and the U.S. jobs 
involved in ongoing use of the project over the life of EXIM financing 
(per year--e.g., 50 jobs per year for five years would be counted as 
250 jobs). As all such jobs estimates are projections of the future, 
EXIM may ask applicants to provide supporting information on why their 
projections are accurate (e.g., similar projects had similar 
employment, projections from their EPC when applicable), as well as 
requesting that EXIM's independent consultants on projects may be asked 
to opine on the reasonableness of the jobs projections. EXIM may choose 
to use a lower jobs number than the applicant provided to determine 
maximum financing.
    U.S. flag shipping: EXIM may require U.S. flag shipping on major 
discrete equipment imports specifically sourced for the project with 
the same exceptions as EXIM's current policy. Items that had been 
imported with no expectation or foreknowledge they would end up being 
purchased with EXIM financing would not require U.S. flag shipping 
(such items could also be termed ``Commercial off the shelf'').
    Comments:
    EXIM seeks comments on the eligibility criteria laid out above. In 
addition, EXIM specifically asks
    (1) Comments on the usefulness of such an option and need for EXIM 
to extend its medium and long-term loans and guarantees to domestic 
projects with an export connection as described in the E.O. 14017 
report recommendation; and

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    (2) Feedback on the hypothetical parameters of such an EXIM program 
as described in the ``supplementary information'' above.

Scott Condren,
Sr. Policy Analyst.
[FR Doc. 2021-27835 Filed 12-22-21; 8:45 am]
BILLING CODE 6690-01-P