FOR IMMEDIATE RELEASE October 19, 2005
Phil Cogan, (202) 565-3200
WASHINGTON, D.C. --- Grain shipments destined for Iraqi consumers are now aboard ships bound for and in ports in the Middle East, representing a milestone in the relationship between U.S. grain exporters, the Export-Import Bank of the U.S. (Ex-Im Bank), the Trade Bank of Iraq (TBI), and J.P. Morgan Chase Bank.
The shipments are part of the $277 million in sales of grain to the Ministry of Trade's Grain Board, the state-run buyer of wheat and rice for Iraq. These commodities are the first agricultural commodities sold to the Iraqi government on 180 day credit terms under Ex-Im Bank's $500 million short-term insurance facility for TBI. These sales were supported by letters of credit issued by the TBI, confirmed by Chase and insured by Ex-Im Bank for the benefit of exporters The Rice Company, ADM Rice Inc., and Cargill International.
This financing helps create and maintain U.S. jobs in the agricultural sector and enables the Iraqi Ministry of Trade to purchase large volumes of U.S. commodities on a timely basis for the benefit of the Iraqi people, Ex-Im Bank Chairman and President (Acting) James H. Lambright said. We look forward to financing additional sales of U.S. goods to Iraq and continuing to build upon our experience in other parts of the world to find innovative financing structures to support Iraqi reconstruction.
Under Ex-Im Bank's facility with TBI, Ex-Im Bank will insure Irrevocable Letters of Credit issued by TBI, and confirmed by a U.S. bank. Standard terms under the facility include a repayment period up to 180 days, a pre-presentation period of 60 days and coverage of 100 percent of the principal and interest. In October 2004, Ex-Im Bank, the Ministry of Finance (MOF) and the Trade Bank of Iraq (TBI) signed a Framework Agreement that enabled Ex-Im Bank to continue to provide support for Iraqi reconstruction under this program.
Use of the credit facility provides the Iraqi government liquidity for buying much-needed food supplies, but just as importantly, it gives the Iraqi government the opportunity to re-establish credit in the wake of years of economic challenges, said Lambright.
Ex-Im Bank is also willing to support U.S. exports to Iraq through its Working Capital Guarantee Program under which it will consider applications to support pre-export activities of U.S. 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 1-800-565-3946 (1-202-565-3946 from outside the U.S.).