FOR IMMEDIATE RELEASE July 19, 2005
Marianna Ohe or Linda Formella (202) 565-3200
WASHINGTON, D.C. - The Board of Directors of the Export-Import Bank of the United States (Ex-Im Bank) has approved an insurance policy for CoBank, ACB for up to $180 million in letters of credit to support U.S. exports to Iraq.
The insurance will be used to support trade financing from CoBank, ACB, a cooperative bank and part of the U.S. Farm Credit System. Under this policy, Ex-Im Bank will support letters of credit issued by the Trade Bank of Iraq in favor of U.S. exporters including Telwar International, Inc. of Brentwood, Tennessee to purchase bulk agricultural commodities, including an estimated $27 million a month in rice and wheat shipments.
This financing will enable U.S. exporters to provide the Iraqi people with large volumes of bulk agricultural commodities and other goods and services on a timely basis, said Chairman Philip Merrill. Ex-Im Bank remains fully committed to supporting Iraq's reconstruction and is diligently working to find new and creative financing solutions to meet Iraq's financing needs.
The Board's action was taken under Ex-Im Bank's $500 million short-term insurance program for the Trade Bank of Iraq (TBI). This program provides for bank letter of credit insurance policies, which provide assurance to U.S. companies that they will receive payment for goods and services exported to Iraqi buyers. On October 5, 2004, Ex-Im Bank, the Iraqi Ministry of Finance and TBI signed an agreement that replaced a December 2003 agreement between Ex-Im Bank, TBI and the Coalition Provisional Authority. This agreement reflected the assumption last June of sovereignty by the Iraqi government and enabled TBI to continue to access this $500 million facility.
Ex-Im Bank also can support U.S. exports to Iraq through its Working Capital Guarantee Program under which it will consider applications to support pre-export activities of subcontractors,particularly small businesses, operating under U.S. government-funded reconstruction projects. In addition, Ex-Im Bank will consider applications for financing of U.S. exports to Iraq under its loan guarantee, working capital, and credit insurance programs if there is a creditworthy source of repayment in a third country.
Ex-Im Bank, the official export credit agency of the United States, is in its 71st year of helping finance the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export credit insurance and direct loans. The bank has no minimum transaction size. In fiscal year 2004, Ex-Im Bank authorized financing to support $17.8 billion of U.S. exports worldwide. For more information on Ex-Im Bank's support for Iraqi reconstruction, visit //www.exim.gov/, or call 1-800-565-EXIM (3946) and press 2 for the Ex-Im Bank regional office nearest you.