WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of Directors today gave final approval to two authorizations and voted to notify Congress of two additional potential authorizations, in support of American workers and exporters. In total, the transactions would support an estimated 4,800 U.S. jobs across the aviation sector.
EXIM Supply Chain Finance Guarantee to Help Aviation Suppliers, Support 1,900 U.S. Jobs
In the first transaction, the EXIM Board unanimously approved a 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 at some of Boeing’s approximately 1,000 eligible suppliers, about half of which are small businesses, as the aircraft supply chain has been negatively impacted by the COVID-19 pandemic. EXIM’s Board voted unanimously last month to notify Congress of the potential authorization and that notification period recently concluded. EXIM financing is needed due to the heightened risk associated with the aircraft manufacturing industry resulting from COVID-19 and global economic conditions as well as the lack of available commercial financing particularly for such short-term transactions.
2,700 U.S. Jobs Potentially Supported Through Aircraft Sales to Panama
In the second and third transactions, the EXIM Board voted unanimously to notify Congress of the agency’s potential final commitment to one transaction and to approve a preliminary commitment to an additional transaction, both to support the export of American-made aircraft to Copa Airlines of Panama.
If ultimately approved by the agency, EXIM’s final commitment would guarantee a loan, with Citibank participating as a guaranteed lender, to Copa Airlines of approximately $327 million for the purchase of several Boeing 737 MAX 9 Aircraft exported from The Boeing Company’s aircraft facility in Renton, WA, which are powered by CFM engines manufactured in Cincinnati, OH.
The EXIM preliminary commitment would be for an approximately $336 million EXIM-guaranteed loan to Copa Airlines for the purchase of several additional Boeing 737 MAX 9 Aircraft. If and when Copa Airlines seeks to convert the preliminary commitment into a final commitment, EXIM requires a new application before considering making a final commitment to the transaction.
In total, these transactions are estimated to support approximately 2,700 American jobs, as determined by EXIM’s job calculator, and many small businesses in the aircraft supply chain stand to benefit as well. EXIM support is necessary because the COVID-19 pandemic has significantly constrained commercial financing for aircraft purchases.
200 U.S. Jobs Potentially Supported Through Aircraft Sale to Turkey
In the fourth transaction, the EXIM Board unanimously voted to approve a guaranteed loan of approximately $37 million to facilitate the purchase of a Gulfstream G650ER aircraft by Cengiz Insaat of Turkey. EXIM estimates the transaction would support 200 American jobs, primarily in Savannah, GA, where much of Gulfstream’s workforce is based. The primary reason EXIM support is needed for this transaction is the lack of commercial term financing in Turkey, particularly for aviation assets.
“These authorizations illustrate EXIM’s Congressional mandate to support U.S. companies of all sizes, which include indispensable supply chains and the American workers who power their high-quality products and services for export around the world,” said EXIM President and Chairman of the Board of Directors Kimberly A. Reed. “As I saw first-hand earlier this week at Pacific Tool Inc. in Redmond, Washington—an important part of Boeing’s U.S. supply chain that makes specialized aerospace tools and now employs 75 workers, down from 150—and heard from a Killdeer Mountain Manufacturing employee during a Fargo, North Dakota town hall with U.S. Senators Kevin Cramer and John Hoeven, small businesses and supply chains are the backbone of the U.S. economy. Especially given COVID-19, important economic and national security issues, and increasing global competition for jobs, EXIM is dedicated to helping American exporters succeed and sell more of their amazing ‘Made in the USA’ goods around the world.”
“The transactions considered today put a variety of EXIM’s tools to use in support of U.S. exports and American workers,” said EXIM Board Member Judith D. Pryor. “Each transaction before the Board was carefully underwritten and met EXIM requirements to move forward. I am pleased to vote in favor of these transactions ensuring American manufacturing remains competitive overseas during challenging economic times.”
“The transactions we voted on today demonstrate EXIM’s role to fill the gap when the private sector is unable to provide financing,” said EXIM Board Member and former Congressman Spencer Bachus. “By doing so, we fulfill our mission of supporting jobs, in these cases thousands of jobs, throughout America.”