Small and Medium-Sized Enterprises in Both Countries to Benefit
FOR IMMEDIATE RELEASE December 16, 2001
Marianna Ohe 202-565-3200
In its first such action, the Export-Import Bank of the United States (Ex-Im Bank) has signed a foreign currency agreement with Nacional Financiera, S.N.C. (NAFIN) that will enable NAFIN to offer peso-denominated loans guaranteed by Ex-Im Bank to Mexican small and medium-sized enterprises (SMEs) buying U.S. goods and services. NAFIN became the first bank in the world to sign a foreign currency supplement to Ex-Im Bank's Master Guarantee Agreement (MGA).
Mexico already is one of Ex-Im Bank's largest customers with a portfolio of $4.8 billion in financing, said D. Vanessa Weaver, a member of Ex-Im Bank's Board of Directors. However this new financing tool offered by NAFIN is an important step in reaching out to more small and medium-sized Mexican enterprises by taking a big element of risk off their shoulders when they buy U.S. goods and services. The expanded business will help sustain jobs and economic growth in both of our countries.
NAFIN Director General Mario Laborin added: NAFIN and its regional offices throughout Mexico will look for transactions that can benefit from this program.
With the foreign currency feature, Ex-Im Bank can process transactions that will be denominated in pesos. NAFIN can provide a loan to a Mexican borrower to buy U.S. goods; the Mexican borrower can repay the loan in pesos, substantially eliminating concerns about currency fluctuations.
Under its Foreign Currency Guarantee Program, Ex-Im Bank is willing to issue guarantees in a number of traditional hard currencies such as the British Pound, French Franc and German Mark. In addition, Ex-Im Bank has in the past received approval from the Treasury Department to issue guarantees in such currencies as the Mexican Peso and the Indian Rupee on a case-by-case basis. Until the introduction of the foreign currency supplement, transactions under the Foreign Currency Guarantee Program have been guaranteed without a standard documentary framework in place. The supplement streamlines this process.
Ex-Im Bank is an independent U.S. government agency that helps finance the sale of U.S. exports primarily to emerging markets throughout the world by providing loans, guarantees and insurance. In fiscal year 2001, Ex-Im Bank supported $995 million of U.S. exports to Mexico, and $12.5 billion of U.S. exports worldwide.