FOR IMMEDIATE RELEASE April 2, 2009
Linda Formella (202) 565-3200
WASHINGTON, D.C.: The Export-Import Bank of the United States (Ex-Im Bank) has approved more than $1 billion in financing to support the export of up to 30 Boeing 737-900ER aircraft with CFM International aircraft engines to Lion Air in Indonesia. On April 2nd, Ex-Im Bank's board of directors approved a final authorization of $238 million and a nonbinding preliminary commitment of $841 million.
The transactions are Ex-Im Bank's first in support of the B737-900ER aircraft and the first Ex-Im Bank-supported aircraft financings for a private-sector airline in Indonesia.
The financings of aircraft under both transactions are eligible for reduced Ex-Im Bank exposure fees (risk premia) under the Cape Town Treaty and the related aircraft-equipment protocol. The Cape Town Treaty is an international treaty that facilitates the cross-border financing and leasing of aircraft, helicopters and aircraft engines. Indonesia implemented the treaty under a new aviation law that went into effect in January 2009.
Ex-Im Bank's financing of these sales of B737-900ER aircraft to Lion Air supports jobs at Boeing's manufacturing facilities in the state of Washington and at CFM International Inc. in Cincinnati, Ohio, as well as at hundreds of small, medium-sized and large U.S. businesses that supply parts and services to Boeing and CFM, said Carol Sexton, managing director, South/Southeast Asia, Boeing Capital Corporation.
Ex-Im Bank welcomes this opportunity to support the export of Boeing aircraft to Lion Air, a successful and growing Indonesian airline. We are very pleased that Indonesia implemented the Cape Town Treaty under its new aviation law. We are delighted to be able to offer Lion Air the reduced exposure fee available under this treaty, which reduces the legal risks associated with cross-border, asset-backed aircraft financings and leases, said Ex-Im Bank Vice President of Transportation Robert Morin.
Since 2003, Ex-Im Bank has offered a reduction of its exposure fee on aircraft and aircraft engine transactions to eligible international airlines to encourage countries to ratify and implement the treaty. To date, a total of 28 countries, including the United States, have signed, ratified or acceded to and implemented the Cape Town Treaty. Airlines have benefitted from Ex-Im Bank's more favorable terms in eight of these countries: Angola, Ethiopia, Indonesia, Kenya, Oman, Pakistan, Panama and Senegal.
More recently, and following Ex-Im Bank's lead, all export credit agencies bound by the new Aircraft Sector Understanding of the Organization for Economic Cooperation and Development are now permitted to offer discounts on the risk premia charged for their financing in support of exports of commercial aircraft, helicopters and aircraft engines to airlines in countries that have ratified and implemented the Cape Town Treaty and the related aircraft-equipment protocol.
A preliminary commitment issued by Ex-Im Bank is made in response to a preliminary application for financing, and, although nonbinding, provides an indication that Ex-Im Bank is interested in financing the type of transaction described in the application. Final approval must follow receipt of a final commitment application, review by Ex-Im Bank staff and final action by the Bank's board of directors.
In fiscal year 2008, Ex-Im Bank authorized $14.4 billion in financing to support an estimated $19.6 billion of U.S. exports worldwide. The Bank authorized more than $5.5 billion to support the export of 97 new U.S.-manufactured, large commercial aircraft to a total of 17 airlines and two aircraft leasing companies located in 15 different countries. For more information, visit www.exim.gov.