EXIM Approves $500 Million in Financing to Support U.S.-Manufactured Commercial Aircraft Exports to WestJet
WASHINGTON - The Board of Directors of the Export-Import Bank of the United States (EXIM) yesterday approved a $500 million loan guarantee to support exports of U.S.-manufactured Boeing 787-9 aircraft to WestJet Airlines Ltd., headquartered in Calgary, Alberta. EXIM's loan guarantee is estimated to support 2,900 American aerospace jobs at The Boeing Company's manufacturing facilities, primarily in South Carolina, and at Boeing's suppliers throughout the United States.
The asset-backed transaction includes EXIM's Bridge-Backstop financing, one of the agency's temporary COVID-19 relief measures approved by the Board of Directors in 2020. Bridge-Backstop financing offers flexible prepayment options to the borrower and facilitates replacing the EXIM financing with commercial financing as market conditions warrant.
"This transaction represents well-structured, prudent lending, and it fills a present gap in aircraft financing in the private sector," said Acting President and Chairman James Burrows. "EXIM's ability to move forward in the aerospace sector helps to provide confidence to commercial lenders that these transactions remain creditworthy."
EXIM's Board of Directors voted on Thursday following the referral of the transaction for a 35-day congressional notification period that began on July 1 and expired on August 4. Notification of the transaction was also posted on the Federal Register for a period ending July 27. Comments received in response to the Federal Register notice were from the Aerospace Industries Association (AIA), and a Boeing supplier, Solvay Specialty Polymers USA, LLC, in Alpharetta, Georgia. Both expressed strong support for EXIM's financing of the aircraft exports to WestJet.
AIA Senior Vice President for Policy Remy Nathan noted that "EXIM's financing is vital for certainty" for U.S. businesses of all sizes in the supply chain. "Support from U.S. government agencies like EXIM provides our industry with the ability to compete in the global market, keep our manufacturing industrial base strong, create jobs and drive economic growth," Nathan wrote. AIA currently has more than 300 member companies.
Under EXIM's Bridge-Backstop financing, EXIM staff underwrites and seeks approval for the full repayment term. The borrower has the option to prepay the EXIM-guaranteed loan at one or more agreed-upon dates from commencement of the financing or opt to continue for the full repayment term. The borrower may prepay the EXIM financing in full on the option date(s), which it selects, subject to EXIM's approval, and thereby recoup the portion of the premium associated with the unused portion of the EXIM financing.
ABOUT EXIM:
The Export-Import Bank of the United States (EXIM) is the nation's official export credit agency with the mission of supporting American jobs by facilitating U.S. exports. To advance American competitiveness and assist U.S. businesses as they compete for global sales, EXIM offers financing including export credit insurance, working capital guarantees, loan guarantees, and direct loans. As an independent federal agency, EXIM contributes to U.S. economic growth by supporting tens of thousands of jobs in exporting businesses and their supply chains across the United States. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt. Learn more at www.exim.gov.