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EXIM Board Approves Two Authorizations Supporting an Estimated 13,450 Jobs Across the United States, Including in Connecticut, Indiana, Kansas, Maine, Nevada, North Carolina, Ohio, Oklahoma, Texas, and Washington

Marks First Use of EXIM’s COVID-19 Temporarily Expanded Supply Chain Financing Guarantee Program

FOR IMMEDIATE RELEASE July 23, 2020

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Office of Communications (202) 565-3206

WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of Directors today unanimously approved support for two transactions, including one that would utilize an EXIM COVID-19 economic recovery measure. In total, the two authorizations would support an estimated 13,450 jobs across the United States.

On June 11, EXIM’s Board of Directors voted unanimously to notify the U.S. Congress, pursuant to the law, of its consideration of these transactions. That facilitated a public comment period through the Federal Register, as well as a separate Congressional notification period of 35 days. Both were concluded earlier this month, allowing the EXIM Board to give final consideration to the transactions at a Board meeting this morning.

“Supporting American-made exports—along with the U.S. jobs that make these outstanding products and services possible—is essential to our nation’s economic recovery. The unanimous action our EXIM Board of Directors took today, following Congressional notification and the opportunity for public comment, is fresh evidence of EXIM’s commitment to our great American workers, businesses, and related domestic supply chains against fierce global competition,” said EXIM President and Chairman of the Board of Directors Kimberly A. Reed. “As President Trump noted in a May 19, 2020, Executive Order: ‘Just as we continue to battle COVID-19 itself, so too must we now join together to overcome the effect the virus has had on our economy. . . To aid those efforts, agencies must continue to remove barriers to the greatest engine of economy prosperity the world has ever known: the innovation, initiative, and drive of the American people.’ The entire EXIM team is fully focused on helping U.S. exporters overcome the obstacles they are facing as a result of the COVID-19 pandemic. We have and will continue to take prompt action to back U.S. jobs and our nation’s domestic supply chains, while protecting the taxpayer.”

In the first transaction, under EXIM’s Supply Chain Finance Guarantee Program, which has been temporarily expanded to address the economic effects of COVID-19, EXIM would guarantee 90 percent, or $459 million, of a $510 million purchase facility for a term of one year for Credit Agricole Corporate and Investment Bank to purchase accounts receivable from CFM International, Inc. (CFMI)/General Electric Corporation (GE) that are due from The Boeing Company. The purchase facility would support an estimated $3 billion in export sales of aircraft engines and an estimated 11,200 total direct and indirect jobs throughout the U.S. supply chain, including 1,180 jobs at CFMI/GE across Indiana, North Carolina, and Ohio. The EXIM guaranteed financing would be repaid over 12 months. The proposed financing support is needed due to the current lack of capacity among commercial banks and heightened risk associated with the aircraft manufacturing industry resulting from the COVID-19 pandemic and global economic conditions. The transaction will facilitate increased liquidity for CFMI/GE and its suppliers.

In a separate, second transaction, EXIM would provide a loan guarantee in an amount up to $498 million for Türk Hava Yollari A.O. (Turkish Airlines) of Istanbul, Turkey. This transaction would support the export of U.S.-manufactured commercial aircraft to Turkish Airlines. The exporter is The Boeing Company of Everett, Washington, which will supply the airframes. The engines are manufactured by General Electric Company, Inc., of Cincinnati, Ohio. This transaction would support an estimated 2,250 jobs across the United States. The EXIM guaranteed financing would be repaid over 12 years in 48 quarterly installments of principal, with interest in arrears, following delivery of the aircraft. The proposed financing support is needed due to the current lack of capacity in the commercial banks and capital markets for long-term debt for Turkish Airlines. EXIM financing is also needed to meet competition from foreign, officially sponsored export credit financing from Germany, France, and the United Kingdom.

During the public comment period, EXIM heard from suppliers and supporters urging approval of this transaction.

  • Click Bond, Inc., a manufacturer of aircraft component parts made in Nevada and Connecticut and founded by a husband-and-wife in 1987, deemed EXIM a “critical enabler in bolstering the efforts of American companies and their workers to compete for and win important business in emerging markets where customer financing can frequently be a key differentiator.” It added that the transaction “will allow Boeing and, by extension, Click Bond, Inc. to remain competitive in the global economy while supporting the jobs of American workers who manufacture and assemble airplanes and constituent parts.”
  • Aircraft designer and manufacturer Spirit AeroSystems noted it employs over 11,000 Americans across locations in Kansas, Oklahoma, North Carolina, Maine and Texas, and said it “is proud to support thousands of jobs in the United States, but many of these jobs depend on international sales of Boeing commercial aircraft.”
  • The National Association of Manufacturers stated, on behalf of 14,000 manufacturers in various industrial sectors in all 50 states, that EXIM’s approval will “boost American competitiveness, stimulate the economy and support high-paying manufacturing jobs in the United States.”

EXIM support may be extended only where there is a “reasonable assurance of repayment” and should supplement, not compete with, private capital. Both transactions are anticipated to generate millions of dollars in fees paid to EXIM.

During the meeting, the EXIM Board also approved changes to EXIM’s Country Limitation Schedule (CLS) that are effective July 30, 2020. The changes will be reflected at that time on EXIM’s website. The CLS is a document that expresses whether EXIM is open or closed for business in a given market. Country conditions in markets in which EXIM is open must meet EXIM’s Charter-mandated requirement of a reasonable assurance of repayment. The EXIM Board has established a linkage between the reasonable assurance of repayment mandate and the country risk ratings from the Interagency Country Risk Assessment System implemented by the Office of Management and Budget. These ratings, which are subject to routine evaluation, reflect the repayment risk of doing business in a market and are required to be used by all U.S. government agencies engaged in cross-border credit activities to estimate expected loss. With this update, EXIM is open for business in 190 countries.

“These transactions are important examples of how EXIM supports American workers and manufacturers, especially during these troubling economic times,” said Board Member Judith D. Pryor. “Today’s financial commitments supporting a parts supplier and a final exported product ensure EXIM fulfills its mission by employing the appropriate tools at our disposal to help U.S. exports compete fairly.”

“EXIM’s actions today continue to reinforce our support for businesses of all sizes, including the many thousands of companies in the manufacturing supply chain that employ U.S-based workers nationwide,” said EXIM Board Member Spencer T. Bachus, III.

Chairman Reed added, “President Trump’s leadership and Congress’ bipartisan support demonstrated a strong endorsement of EXIM, one that restored our Board quorum with a revitalized mandate to further the ability of American companies and their workers to compete worldwide. These authorizations are prime examples of delivering on that mandate, a charge embodied in our vision of Keeping America Strong: Empowering U.S. Businesses and Workers to Compete Globally. I appreciate all the support and hard work of my fellow Directors as well as EXIM’s fabulous staff.”

ABOUT EXIM:

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.