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EXIM Bank offers financing support to foreign purchasers of new and used U.S. manufactured commercial and general railroad equipment under its direct loan, guarantee, and insurance programs. The OECD Arrangement on Guidelines for Officially Supported Export Credits and the Rail Sector Understanding govern the terms and conditions of EXIM Bank’s financing support for railroad equipment exports including locomotives, and passenger and freight cars (“rolling stock”).

Railroad Equipment Exports

EXIM Bank will base its credit decision on the creditworthiness of the railroad borrower (and/or guarantor). Depending on the risk characteristics of the transaction, EXIM Bank may require the additional security provided by a mortgage over the equipment. For government-owned or controlled railroad borrowers that do not have audited financial statements, EXIM Bank may also require a sovereign guarantee. Generally, EXIM Bank can support up to 85 percent of the contract price (but not more than 100 percent of the “U.S. content” of the equipment). For transactions that represent especially high risks, however, EXIM Bank may reduce its advance rate below 85 percent or require additional security such as a security deposit. Repayment of principal and interest is typically every three months, but cannot be less frequent than every six months, and the first installment must be made no later than six months after the starting point of the credit.

While this Fact Sheet focuses on transportation equipment, EXIM Bank is also able to support U.S. exports of railroad “infrastructure” equipment (e.g., tracks, switching and signaling equipment, etc.). The terms and conditions of EXIM Bank's support for such equipment also will be governed by the OECD Arrangement and the Rail Sector Understanding.

New Rolling Stock Equipment

For new rolling stock equipment (i.e., locomotives and rail cars), support is typically provided under EXIM Bank's medium or long-term guarantee program where EXIM Bank guarantees 100 percent of the principal and interest of a loan extended by a financial institution. Under the Rail Sector Understanding, which took effect from January 1, 2014, the maximum repayment term can be (i) up to twelve years for borrowers located in Category I countries and (ii) up to fourteen years for borrowers located in Category II countries.

Used Rolling Stock Equipment

Used rolling stock equipment may also be eligible for EXIM Bank support provided that the equipment meets EXIM Bank's used equipment criteria. These criteria specify that the equipment must (i) be originally manufactured in the U.S.; (ii) be in service within the U.S. for at least one year prior to export; and (iii) be exported from a U.S. port. A Used Equipment Questionnaire must be completed when the application is submitted and will be reviewed by EXIM Bank to determine eligibility. The repayment term that EXIM Bank will provide is generally commensurate with the equipment’s remaining “useful life”, but will not exceed the repayment term for new equipment. For locomotives, the portion of the total value of the used equipment attributable to its being rebuilt or reconditioned in the U.S. is an important factor in determining the remaining “useful life” of the used equipment.


EXIM Bank charges an exposure fee for each transaction and which may be included in the financed amount supported by EXIM Bank. The “Exposure Fee Calculator” located on EXIM Bank’s website is used to determine the exposure fee. EXIM Bank charges a commitment fee of one-eighth of one percent per annum on the non-utilized amount for a guaranteed loan (and one-half of one percent per annum for a direct loan), which begins to accrue 60 days after EXIM Bank approval of the transaction, and which may not be financed.