Eximbank Financing: Selected Cases

1. Omni Helicopters International (OHI) of Brazil (Credit Guarantee)

In December 2012, the U.S. Export-Import Bank (Eximbank) agreed to guar­antee financing to support the export of U.S.-made helicopters to Brazil. The Bank approved a final commitment to guarantee support for 85 percent of the U.S. content of the export, a portion amounting to $23.2 million. Omni Helicop­ters International S.A. (OHI) will buy the aircraft and assign them to its operat­ing subsidiary, OTA. A Philadelphia manufacturer, AgustaWestland Philadelphia Corporation, will supply its twin-engine helicopters in order for OHI to service its transportation contracts with Petrobras, which operates deep-water drilling rigs off the Brazilian coast. Brazil’s state-owned Petrobras offshore drilling industry increasingly demands new-technology, medium-lift helicopters to carry passen­gers to remote offshore operations. The helicopter can carry fifteen passengers.

It features a range of 575 miles and can fly at a cruising speed of 190 miles per hour. The Bank’s financing is estimated to support at least 500 American jobs in all phases of aircraft production and delivery, based on the number employed by the company.

2. BG Energy Holding of Trinidad and Tobago (Direct Loan)

In November 2012, Eximbank approved a $37.6 million direct loan to support ex­ports by McDermott International Inc. and five American suppliers of natural gas compression equipment and technology for a United Kingdom energy project off the coast of Trinidad and Tobago. Under the terms of the direct loan, Eximbank will support exports of U.S.-only goods and services to a $150 million project to construct and install a gas compression system on the existing Hibiscus Platform, situated off the northern coast of Trinidad. The borrower is BG Energy Holding Limited, and the buyer is BG Trinidad and Tobago (BGTT), which is responsible for 46 percent of the larger project.

Houston-based McDermott International Inc. was hired to provide the detail engineering, equipment procurement, unit fabrication, transportation, heavy lift, and installation. The company is responsible also for startup and commission­ing. McDermott International is an engineering, procurement, construction, and installation (EPCI) company that executes complex offshore oil and gas projects worldwide. Five U.S. suppliers will manufacture or provide components for the project.

3. Export of Cotton to Turkey (Credit Insurance)

In October 2012, Eximbank renewed a twelve-month export credit insurance pol­icy for Wells Fargo to enable the export of American cotton to a large textile firm in Turkey, Menderes Tekstil. Farm workers on at least fifteen U.S. farms produced the cotton for export throughout 2013. Depending upon agricultural factors and the precise qualities of cotton needed for various textiles, the cotton will be ex­ported from a combination of farms in North Carolina, South Carolina, Tennessee, Virginia, and other states. Eximbank’s support is expected to facilitate $15 million in sales of what these farms produce.

The instrument renewed in this transaction was a Financial Institution Buyer Credit (FIBC), allowing Wells Fargo Bank to extend revolving credit to the Turkish textile manufacturer so that it can import American cotton. The Menderes Tekstil firm is the largest home textiles producer in Turkey and one of the largest in the world. The primary exporters benefiting from this FIBC policy are Cargill Cotton and Carolinas Cotton.

4. Ethiopian Airlines (Backing Bond Issued by Ethiopian Airlines)

In November 2012, the Eximbank agreed to back bonds issued by Ethiopian Air­lines to finance the export of four of ten Boeing 787 Dreamliner aircraft to Ethiopia. Ethiopian Airlines obtained competitive interest rates on its bonds.

Eximbank authorized the final commitment for the purchase of the Dream­liners in May, and Boeing delivered the first aircraft to Ethiopian Airlines in August 2012. Nippon Export and Investment Insurance (NEXI) cofinanced the transaction. The Boeing 787 aircraft delivered to Ethiopian Airlines are the first of their kind to be delivered to any airline outside Japan and the first one to be financed by Eximbank.

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.

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