Transactions Support Jobs in Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Iowa, Louisiana, Minnesota, Mississippi, Oklahoma, Pennsylvania, and Texas
FOR IMMEDIATE RELEASE September 30, 2020
Office of Communications (202-565-3206)
WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of Directors yesterday unanimously voted to approve three authorizations totaling a combined $450 million in financing to support an estimated 1,900 American jobs through the export of energy-related goods and services abroad. Altogether, the transactions would support jobs across Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Iowa, Louisiana, Minnesota, Mississippi, Oklahoma, Pennsylvania, and Texas.
Two of the authorizations relate to the export of American products to Petroleos Mexicanos (Pemex). The EXIM Board approved a $335 million general facility and $65 million small business facility (SBF), the latter of which was increased from the $50 million amount in Pemex’s initial request, providing additional benefit to U.S. small business suppliers to Pemex. The combined $400 million financing facilities would support an EXIM-estimated 1,700 jobs in California, Colorado, Connecticut, Georgia, Illinois, Iowa, Louisiana, Minnesota, Oklahoma, Pennsylvania, and Texas in the oilfield services industry, which has faced difficulties as a result of the COVID-19 pandemic.
On August 27, EXIM’s Board of Directors voted unanimously to notify the U.S. Congress, pursuant to the law, of its consideration of these transactions. The Congressional notification period concluded earlier this month, allowing the EXIM Board to give final consideration to the transactions. PEMEX submitted the applications to EXIM for the facilities in March 2020.
The 2015-2019 lapse in EXIM’s Board quorum suspended the agency’s 76-year association with Pemex, Mexico’s state-owned oil company that conducts exploration, production, industrial processing and refining, logistics, and marketing. During the four-year absence of a Board quorum at EXIM, China sought to step into the breach to expand its influence in the region and pursued closer ties with Pemex, which closed its first transaction with China’s Sinosure export credit agency last year, notwithstanding the company’s previous financings with EXIM.
These transactions will help fill in private sector financing gaps and provide certainty to a U.S. industry suffering because of the global pandemic, as well as provide a valuable alternative to Chinese offerings. EXIM financing under these transactions also will facilitate the purchase of U.S. oil and gas equipment and services provided to approximately 21 oil and gas field projects.
During the Board meeting, EXIM staff noted that Pemex has a long and excellent history of repayment to EXIM and there is every expectation for this to continue, notwithstanding certain financial challenges which currently face the company.
In the third transaction, the EXIM Board voted unanimously to approve a 90 percent guarantee of a $50 million finance facility from Greensill Capital (UK) to Freeport LNG Marketing, LLC in Houston, TX under EXIM’s Supply Chain Finance Guarantee Program. It would support an estimated 200 American jobs, principally in Texas as well as in Arkansas, Louisiana, Mississippi, and Oklahoma. The deal is Greensill’s first with EXIM, whose involvement will allow Freeport LNG to efficiently pay its U.S. suppliers. This is an innovative transaction providing working capital financing for Freeport LNG’s marketing arm, with the EXIM guarantee playing a vital role as the demand for credit in the United States has increased due to the COVID-19 pandemic. Greensill has a strong track record of working with sovereign-rated partners to provide the best possible risk cover for its clients and investors alike.
“Last October I traveled to the Port of Houston to meet with business leaders and recently I visited virtually with the Greater Houston Partnership as well as the Petroleum Equipment & Services Association. I have heard directly, loud and clear, about the importance of oil and gas services in supporting many jobs in Texas and around our country,” said EXIM President and Chairman of the Board Kimberly A. Reed. “We’ve worked hard the past year to review each transaction on its own merits with an eye toward helping American workers and that’s what we are doing here. As a result, the Board unanimously approved these authorizations in support of an estimated 1,700 U.S. jobs across 11 states.”
“In addition, I’m thrilled and excited to support the Freeport LNG transaction, which will help so many small businesses and other U.S. employers,” Reed added. “With this vote, EXIM is supporting great jobs across Arkansas, Louisiana, Mississippi, Oklahoma, and especially Texas in an industry that is working hard to rebound from the negative impact of COVID-19.”
“EXIM’s supply chain agreement with Freeport LNG will maintain an EXIM-estimated 200 jobs in Texas and other states and the company estimates it will support thousands of U.S. jobs directly and indirectly, throughout the country within the LNG industry and supplier networks,” said EXIM Board Member Congressman Spencer Bachus.
Additionally, the EXIM Board voted unanimously to approve a resolution restricting EXIM financing of certain essential medical supplies identified by the U.S. Department of Health & Human Services as necessary for the domestic response to the COVID-19 pandemic. The EXIM Board originally adopted the temporary restriction on April 14, 2020, and has now extended the restriction on an ongoing basis.
EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to support sales of U.S. goods and services to international buyers. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, approximately 90 percent of the total number of the agency’s authorizations has directly supported small businesses. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt.
For more information about EXIM, please visit www.exim.gov