WASHINGTON – Yesterday, the Board of Directors of the Export-Import Bank of the United States (EXIM) approved two transactions totaling $832.5 million in loan guarantees to support exports of U.S.-manufactured Boeing 787-9 aircraft, B737 MAX 8 aircraft and B737 MAX 9 aircraft, respectively, to Turkish Airlines in Istanbul. EXIM’s loan guarantees are estimated to support an estimated 4,500 American aerospace jobs at The Boeing Company’s manufacturing facilities in Washington State and South Carolina, and at Boeing’s suppliers throughout the United States.
The board vote followed the referral of the transactions for a 35-day congressional review period that began on June 24 and expired on July 29. Notification of the transactions was also posted on the Federal Register for a period ending July 19. Comments received in response to the Federal Register notice from the National Association of Manufacturers (NAM) and a Boeing supplier, Kildeer Mountain Manufacturing, in Kildeer, North Dakota, strongly endorsed EXIM’s support for the exports to Turkish Airlines. The North Dakota small business supplier noted that the company provides nearly 300 jobs in three North Dakota towns: Kildeer, Dickinson, and Hettinger.
NAM’s Director of Trade Facilitation Policy Ali Aafedt noted in a letter to EXIM, “As the aerospace industry emerges from the difficulties brought on by the COVID-19 pandemic, EXIM Bank’s support, where necessary, remains more important than ever.”
“EXIM’s support for these aircraft exports to Turkish Airlines is especially needed at this time because of the significant financial impact of COVID-19 pandemic worldwide. These transactions will support thousands of American jobs throughout the aircraft manufacturing supply chains and aid in this industry’s recovery,” said Acting President and Chairman James Burrows.
“EXIM has more than 20 years of experience with Turkish Airlines. These are solid transactions at a critical time, and they provide a reasonable assurance of repayment,” said EXIM Acting First Vice President and Vice Chairman James C. Cruse. He also cited the benefits of anticipated risk-sharing with other export credit agencies on one transaction. Currently, EXIM is pursuing co-financing/risk sharing with Japan’s export credit agency, NEXI, and Italy’s SACE for the B787-9 aircraft transaction in order to reduce EXIM’s net exposure.
“The EXIM Board’s actions fill a gap by providing financing in a challenging market and in difficult economic conditions,” said EXIM Board member and former Congressman Spencer Bachus. “In addition, over 4,500 jobs across the country are supported by this transaction, including positions in numerous small businesses in the supply chain.”
For the first transaction, Natixis S.A., is arranging an asset-backed lease for the B787-9 aircraft. Natixis, BPCE (parent company of Natixis), and JP Morgan Chase in Germany will serve as the guaranteed lenders. For the second transaction, BNP Paribas is arranging an asset-backed lease for the B737 MAX 8 aircraft and B737 MAX 9 aircraft. BNP Paribas, Citibank, Bank of America, and Caixabank will serve as guaranteed lenders. All aircraft are expected to be delivered by the end of 2021.