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The London Inter-Bank Offered Rate, commonly referred to as LIBOR, is the benchmark interest-rate used by most of the guaranteed lenders in EXIM guaranteed loans to date. It is also the exclusive benchmark interest rate used by EXIM with respect to such loans following any post-default claim payment. When LIBOR is used in this context in EXIM’s loan documentation, it is referred to as “Special LIBOR”. 

LIBOR is in the process of being phased out, with a target date of June 2023 for discontinuation of most US LIBOR tenors. EXIM currently plans for all use of LIBOR (including “Special LIBOR”) in EXIM supported financings to be discontinued by that June 2023 target date.

LIBOR’s discontinuation impacts all commercial and official (governmental and multilateral) lenders with LIBOR-based products.

EXIM’s LIBOR-based loans are all documented under credit agreements governed by the laws of the State of New York. The “Special LIBOR” clauses in these agreements generally do not provide for a non-LIBOR based fallback mechanism following LIBOR’s discontinuation, but these clauses are covered by recently enacted LIBOR transition-related protections under New York law. The text of this new law can be found at: https://www.nysenate.gov/legislation/laws/GOB/A18-C. The law provides that in the case of LIBOR-based contracts containing no fallback provisions or with fallback provisions providing for a benchmark replacement based on LIBOR, the SOFR-based1 benchmark replacement recommended by the U.S. Federal Reserve Board, the Federal Reserve Bank of New York or the Alternative Reference Rate Committee (ARRC)2, will automatically apply.

For newly originated LIBOR-based loans, EXIM has already updated its template credit agreements to include the ARRC’s previously recommended “amendment approach” for handling the pending LIBOR transition. This approach works seamlessly with the LIBOR transition mechanisms provided under the above-referenced New York law.

For older LIBOR-based loans in EXIM’s portfolio that were entered into prior to EXIM’s implementation of the “amendment approach” fallback language in its credit agreement templates, EXIM currently expects that, for purposes of “Special LIBOR,” it will rely on the New York law’s automatic / mandatory replacement of LIBOR with the recommended benchmark replacement once LIBOR is discontinued. EXIM will coordinate with its guaranteed lenders and impacted borrowers regarding the best approach to take with respect to any other LIBOR-based interest rate clauses in EXIM’s guaranteed loan agreements.

Export Credit Insurance

Our short-term transactions with a LIBOR based benchmark have different coverage features from what is typically associated with our medium/long-term business. As such, parties should inquire with their representative in the Export Credit Insurance unit to address any LIBOR related questions related to your policy. 

LIBOR Transition and the EXIM Bank Working Capital Guarantee Program

Unlike the documentation used for EXIM Bank medium and long-terms transactions, EXIM Working Capital Guarantee Program “WCGP” documents do not include references to “LIBOR”, “Special LIBOR” or “Reference Rate”. Interest rates and indices are negotiated by the Delegated Authority Lender and the Borrower and provided to EXIM Bank in the Lender’s supporting loan documentation. The Working Capital Guarantee Program and the ELMS platform will not support new LIBOR-based transactions after December 31, 2021 and Lenders should use an alternate base rate index such as the Secured Overnight Financing Rate “SOFR” as recommended by the Federal Reserve Board Alternative Reference Rate Committee for all new and renewing floating rate transactions. Lenders should ensure that any LIBOR-based WCGP transactions with maturity dates that extend beyond the LIBOR publication date include, or be amended to include, appropriate alternate base rate language. Delegated Authority Lenders should contact their WCGP representative regarding LIBOR transition-related questions and guidance.


1 SOFR, or the Secured Overnight Financing Rate, is a secured interbank overnight interest rate and reference rate established as an alternative to LIBOR. The ARRC (see footnote 2) selected SOFR as the preferred alternative to LIBOR.

2 The ARRC is a group convened by the U.S. Federal Reserve Board to plan for LIBOR transition and make recommendations.