Proposed Transaction Utilizes EXIM COVID-19 Economic Recovery Measure, Many Small Business Suppliers Will Benefit Pending EXIM Final Approval
FOR IMMEDIATE RELEASE October 22, 2020
Office of Communications (202) 565-3206
WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of Directors yesterday unanimously voted to notify the U.S. Congress, pursuant to the law, of its consideration of a potential 90 percent guarantee of a $500 million facility under the agency’s Supply Chain Finance Guarantee Program.
The EXIM guarantee to Citibank would allow it to finance accounts receivable due from The Boeing Company to its U.S.-based suppliers for a term of 12 months. The authorization would support an EXIM-estimated 1,900 aviation-related jobs across the country, including in California, Florida, Kansas, New York, Texas and Washington. Boeing’s approximately 1,000 eligible suppliers, about half of which are small businesses, also stand to benefit as the aircraft supply chain has been negatively impacted by the COVID-19 pandemic.
“Following President Trump’s leadership and official proclamation, EXIM recently marked Manufacturing Day 2020, and celebrated the incredible American men and women who ensure that ‘Made in the USA’ goods are the best in the world,” said EXIM President and Chairman of the Board of Directors Kimberly A. Reed. “I have heard loud and clear and have seen first-hand how critical EXIM is to small business suppliers across our great country. EXIM is working hard to provide the financing support necessary to help businesses and their workers overcome the challenges brought on by COVID-19. If ultimately approved, this transaction would demonstrate EXIM’s commitment to supporting our nation’s great exporters of all sizes—including those that are part of supply chains—and the Americans they employ, while protecting the taxpayer.”
“I am pleased to send this transaction to Congress for consideration,” said EXIM Board Member Judith D. Pryor. “With manufacturing and supply chains facing significant disruption and with the lack of liquidity in commercial markets due to the COVID-19 pandemic, the need for EXIM financing remains strong and would directly benefit U.S. small businesses.”
“In addition to supporting $21 billion in sales of U.S.-made aircraft to international buyers, the action the EXIM Board took today would also support small businesses in the supply chain, protecting thousands of jobs across the country,” said former Congressman and EXIM Board Member Spencer Bachus.
The proposed financing support is needed due to the heightened risk associated with the aircraft manufacturing industry resulting from the COVID-19 pandemic and global economic conditions as well as the lack of available commercial financing particularly for such short-term transactions. At the conclusion of a 35-day Congressional notification period, the EXIM Board may give final consideration to the transaction, which would utilize one of the agency’s COVID-19 relief measures adopted earlier this year.
During the meeting, the EXIM Board also approved changes to EXIM’s Country Limitation Schedule (CLS) that are effective October 28, 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.
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.