U.S. Small Business Suppliers, Workers at Spirit AeroSystems, General Electric to Benefit from $125 Million in EXIM Supply Chain Finance Guarantee and Loan Guarantee Financing
FOR IMMEDIATE RELEASE January 13, 2021
Office of Communications (202-565-3206)
WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of Directors yesterday unanimously voted to approve two transactions in the aviation sector that has been negatively impacted as a result of the COVID-19 pandemic. Combined, the authorizations amount to $125 million in financing in support of 500 American jobs across nine states: California, Florida, Iowa, Kansas, Montana, Ohio, Oklahoma, Texas, and Washington.
Spirit AeroSystems Inc.
In the first transaction, the EXIM Board approved a 90 percent guarantee of a $40 million facility under the agency’s Supply Chain Finance Guarantee program. EXIM’s involvement will enable Bank of America, N.A. to provide the facility to Spirit AeroSystems Inc. (Spirit) and Spirit AeroSystems North Carolina, Inc., located in Wichita, Kansas, and Kinston, North Carolina, respectively, enabling the company to efficiently pay its U.S.-based suppliers, including many U.S. small businesses. It is estimated that approximately 40 suppliers to Spirit will participate in this facility and that over 90 percent of the suppliers are small businesses, located in California, Florida, Iowa, Kansas, Montana, Oklahoma, Texas, and Washington. EXIM estimates that the facility will support 100 jobs at Spirit, as well as additional jobs through its supplier network. EXIM involvement is necessary because of broader market conditions and the impact of the COVID-19 pandemic, which reduced the availability of commercial lending.
Qantas Airways Limited
The second transaction approved by the EXIM Board concerns Queensland And Northern Territory Aerial Services Ltd (Qantas), the world’s second oldest airline with 100 years in operation. EXIM’s Board voted to guarantee a loan, to be denominated in Australian dollars, equivalent to $85 million to Qantas to facilitate the purchase of seven spare engines manufactured by GE Aviation for the airline’s passenger jet fleet. JP Morgan will serve as the Guaranteed Lender. EXIM estimates the transaction will support approximately 400 jobs at GE’s manufacturing and assembly sites, as well as at small business suppliers to GE, which make component parts for the spare engines. EXIM support is needed for this transaction due to the COVID-19 pandemic and ensuing government travel restrictions, which reduced the availability of commercial aviation financing.
“The EXIM Board’s unanimous action shows our agency’s commitment to helping U.S. companies, especially small businesses that are part of supply chains, in the wake of COVID-19. The Spirit transaction also provides an example for other U.S. companies, as this is the first time a first-tier supplier has used EXIM’s supply chain financing guarantee to get payments out to another layer of suppliers, many of which are small businesses,” said EXIM President and Chairman Kimberly A. Reed. “The Qantas transaction further underscores EXIM’s important role during the COVID-19 pandemic and economic recovery, just as following the 2008 financial crisis, in helping the world buy outstanding American products, such as those made by GE Aviation and its network of suppliers.”
Chairman Reed added, “Last week EXIM lost a tremendous colleague, Sharyn Koenig, who was EXIM’s Managing Director for our Eastern Region and based in Miami, Florida, to cancer. I have dedicated this meeting to her memory, which is especially poignant as she focused on supporting small businesses and workers across our nation, which, in this case, is an estimated 500 American workers.”
“I was pleased to support the transactions brought before the board, each of which fulfill EXIM’s mission to support U.S. jobs through exports, in different ways,” said EXIM Board Member Judith D. Pryor. “EXIM backing defends the leadership of American exports in a variety of industries while protecting U.S. taxpayer dollars.”
“The transactions we voted on support hundreds of jobs across a supply chain of small businesses nationwide, and provide crucial financing to industries and financial markets that are experiencing severe disruption due to the COVID-19 pandemic,” said EXIM Director and former Congressman Spencer Bachus. “Australia-based Qantas, consistently named one of the world’s safest carriers, rarely needs EXIM support. However, these are extraordinary times and it is important that we not only support our American exporters, but that we stand with Australia and Qantas during a period when they are under threat of outside economic interference.”
“EXIM has always played an important role in the global competitiveness of the U.S. aerospace industry and the jobs created by aerospace manufacturers,” said Mark Suchinski, Chief Financial Officer, Spirit AeroSystems. “We appreciate EXIM’s support for our supply chain, which includes many small businesses in communities across the United States.”
“GE’s competitive position across its industrial businesses is enhanced by competitive export financing. EXIM financing provides critical support for GE Aviation, suppliers, and valued airline customers such as Qantas, particularly during the pandemic crisis,” said Subha Nagarajan, Managing Director, Global Capital Advisory, GE Capital.
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.