2008 wdtc ex im bank slides

8/4/2019 2008 Wdtc Ex Im Bank Slides

1/46

EXPORT-IMPORT BANK

of theUNITEDSTATES

EXPORT-IMPORT BANK

of theUNITEDSTATES

Jobs Through Exports

Ex-Im Bank

U.S. Exporter

Product Overview

Video Presentation

Ex-Im Bank

U.S. Exporter

Product Overview

Video Presentation


2/46

EXPORT-IMPORT BANK

of theUNITEDSTATES

EXPORT-IMPORT BANK

of theUNITEDSTATES


Ex-Im Bank 101:Ex-Im Bank 101:

The Basics


3/46

Who We Are What We DoWho We Are What We Do

Ex-Im Bank is an independent agency of the

United States government

Established in 1934

Headquartered in Washington, DC

5 regional business development offices plus 2

satellite locations in CA (San Diego and San

Francisco)

Mission: Support US exports in order to

create and sustain US jobs


4/46

Ex-Im Bank Regional OfficesEx-Im Bank Regional Offices

Newport

Beach

Newport

Beach

ChicagoChicago

NewNewYorkYork

MiamiMiami

HoustonHouston

San

Francisco

San Diego


5/46


6/46

Eligibility CriteriaEligibility Criteria

US Content

51% for short-term transactions

85% for medium-term transactions

Services must be performed by US-based

personnel, either in the US or in the host

country


7/46

Eligibility CriteriaEligibility Criteria

Country Eligibility

Support available in over 155 countries

Restrictions may apply for political or

economic reasonsRefer to the Country Limitation Schedule

(CLS) at www.exim.gov on the homepageunder Shortcuts


8/46

HowWe Help IncreaseYour Export SalesHowWe Help IncreaseYour Export Sales

Minimize risks

Level the playing field

Supplement commercial financing


9/46

Foreign Export Credit AgenciesForeign Export Credit Agencies

EDC Canada

ECGD UK

Coface France

EulerHermes Germany

JBIC Japan

Sace Italy

KEIC, Keximbank S. Korea

OeKB Austria

Efic Australia

Your foreign competitors have similarsupportYour foreign competitors have similarsupport


10/46

Small Business IS Our BusinessSmall Business IS Our Business

86% of all Ex-Im Bank transactions supportedsmall business exports!

90% of total working capital guarantees --($990 million)

90% of total short-term insurance policies --($2.1 billion)

MT loans and guarantees -- $275 million

$525 million in working capital guaranteesand export credit insurance supportedexports by minority or woman-ownedbusinesses


11/46

FY 2008 at a GlanceFY 2008 at a Glance

Total Authorizations: $12.6 billion

Major Sectors:

Transportation: $4.7 billion

Environmental: $82 million

Energy: $2.0 billion

Agriculture: supported $1 billion in export value

Services: supported $1.6 billion in export value


12/46

Trade Terms as a Spectrum of RiskTrade Terms as a Spectrum of Risk

Seller RiskSeller Risk Trade TermsTrade Terms Buyer RiskBuyer Risk

HighHigh LowLow

Open AccountOpen Account

Cash Against DocumentsCash Against Documents

Sight Letters of CreditSight Letters of Credit

Usance / Deferred Letters of CreditUsance / Deferred Letters of Credit

Payment in AdvancePayment in Advance

LowLow HighHigh


13/46

Ex-Im Bank SupportCovers the SpectrumEx-Im Bank SupportCovers the Spectrum

Pre-Export

Financing

Post-Export

Financing

Working

CapitalGuarantee

Insurance

GuaranteesDirect Loans


14/46

EXPORT-IMPORT BANK

of theUNITEDSTATES

EXPORT-IMPORT BANK

of theUNITEDSTATES


Pre-Export Financing:Pre-Export Financing:

Export Working CapitalGuarantee Program


15/46

Working Capital Guarantee (WCG)Working Capital Guarantee (WCG)

Assists small and mid-size companies inobtaining working capital to produce orpurchase US goods and services for

exportProvides a 90% guarantee of repayment

(principal and interest) on loans to

exportersMay be set up as Transaction-Specific

or a Revolving Line of Credit


16/46

Working Capital GuaranteeWorking Capital Guarantee

No minimum or maximum amounts

Loan supports advances made against

export-related inventory (including WIP)

and foreign receivables:

Up to 75% advance rate on inventory, and

up to 90% on foreign receivables


17/46


Assists US-based transportation logistics

providers in obtaining working capital tofacilitate the export of commercial

cargo on US-flag ships

Uses accounts receivable as collateralfor the loan

Transportation Freight Financing (TFF) ProgramTransportation Freight Financing (TFF) Program


18/46


Funds may be used to provide servicesdirectly related to the logistics involved in the

export of commercial cargo such as: Ocean, air, rail and truck freight

Cargo and marine insurance

Crating and packing

Port drayage; warehousing

Terminal, forwarder and broker fees

Transportation Freight Financing (TFF) ProgramTransportation Freight Financing (TFF) Program


19/46


Asset-Based: fully collateralized

Personal guarantees are required of owner(s)

Cost:

$100 application fee

Up to 1.5% facility fee Reduced fee if:

Exports sales structured under L/Cs and/or secured byexport credit insurance; exporters financial ratios arewithin its industry median

A lower fee may be negotiated with a DelegatedAuthority Lender (see list on www.exim.gov)

Interest rate is determined by the lender


20/46

WCG Increases Borrowing PowerWCG Increases Borrowing Power


21/46

Success Story:Callidus Technologies LLCSuccess Story:Callidus Technologies LLC

Challenge: Small business, environmentalengineering firm needed cash to open stand-by L/Cs (performance bonds) with the buyeras beneficiary during production of the

equipment. Solution: Lender funded a $5mm Ex-Im Bank

guaranteed working capital line of credit, withthe exporter collateralizing only 25% of thestand-by L/C amount.

Result: The firm was able to accept one ofthe largest orders ($16 million) in its history,and added 70 new employees.


22/46

EXPORT-IMPORT BANK

of theUNITEDSTATES

EXPORT-IMPORT BANK

of theUNITEDSTATES


Post-Export Financing:Post-Export Financing:

Short-TermExport Credit Insurance


23/46

Short-TermExport Credit InsuranceShort-TermExport Credit Insurance

Protects U.S. exporters against non-payment byforeign buyers due to:

Commercial Risks

Political Risks

Allows exporters to offer competitive credit terms toforeign buyers

Generally up to 180 days, some products may qualify for 360day terms

Obtain additional financing

Insured foreign receivables may be added to your borrowingbase by assignment of policy proceeds (claim payments) tolender


24/46

Risks CoveredRisks Covered

Commercial Risks

Insolvency

Bankruptcy

Protracted default

Political Risks

Transfer risk

War, revolution,

insurrection,expropriation

Cancellation of animport or exportlicense


25/46


Coverage:

Up to 180 days, exceptionally 360 days (for

capital equipment and bulk, unprocessed

agricultural products)

Commercial and political risks


26/46


Lender Policies:

Bank Letter of Credit

Financial Institution Buyer Credit

Financial Institution Supplier Credit

Foreign Dealer Insurance Policy (may roll to MT)

Exporter Policies: Multi-Buyer or Single-Buyer


27/46

Small Business Multi-Buyer PolicySmall Business Multi-Buyer Policy

Coverage:

No 95% commercial and 95% political

Exporter must qualify as smallbusiness by SBA definition, and:

No more than $5 million in export creditsales over the past 2 years

1 year successful operating history


28/46

Small Business Multi-Buyer PolicySmall Business Multi-Buyer Policy

Must insure ALL export credit sales

(L/C, CIA, CAD, SDDP sales may

excluded)

Refundable advance premium: $500

No deductible, no application fee, pay-

as-you-ship, no minimum premiumrequirement


29/46

Small Business Multi-BuyerPremium Rates (example)Small Business Multi-BuyerPremium Rates (example)

Term SovereignFinancial

Institutions Private

Sight L/Cs $0.04 $0.04 N/A

1-60 days $0. 19 $0. 24 $0.6561-120 $0. 32 $0. 39 $1.06

121-180 $0. 41 $0. 50 $1.35

181-270 $0. 51 $0. 63 $1.70

271-360 $0. 62 $0. 77 $2.08

Per $100. of the gross invoice amount

25%rate reduction ifused with Ex-Im/SBA Working Capital Guarantee product!


30/46

Standard Multi-Buyer PolicyStandard Multi-Buyer Policy

For experienced exporters with over 500

employees and /or $5mm in annual export

credit sales

Must insure ALL export credit sales(L/C, CIA, CAD, SDDP may be excluded)

On a case-by-case basis, exporter may

request to exclude certain buyers(Reasonable Spread of Risk)


31/46

Standard Multi-Buyer PolicyStandard Multi-Buyer Policy

Coverage:

95% for both commercial and political risks

Buyer credit limits endorsed to policy (requiresminimal pre-approvals by Ex-Im Bank)

No minimum premium, pay-as-you-ship


32/46

Success Story:Pharmaceutical Trade Services, Inc.Success Story:Pharmaceutical Trade Services, Inc.

Challenge: Exporter of specializedprescription drugs needed to extendcompetitive credit terms to get larger orders

Solution: The company used the smallbusiness multi-buyer policy as a marketingtool to extend net 45 day terms and increasesales

Result: The companys export sales volume

increased over a 7 year period from $713,000to nearly $6 million, and the staff grew to 15employees


33/46

Single Buyer Insurance PolicySingle Buyer Insurance Policy

Buyer-specific policy

Insures a single sale or multiple sales to

one buyer90% coverage, both commercial and

political; 95% for letters of credit

Maximum policy period: 1 year

No deductible, No application fee


34/46

Single Buyer Insurance Policy(cont.)Single Buyer Insurance Policy(cont.)

Premium based on country and length of creditterms (see rates on www.exim.gov)

Charged on sales volume (not credit limit)

Pay-as-you-ship

Reduced minimum premium for small

business exporters


35/46

Single-Buyer Rates (private sector)(example)Single-Buyer Rates (private sector)(example)

Country

Sight

L/C

Up to 60

days

61-120

days

121-180

days

Mexico $0.03 $0.48 $0.79 $1.00

Brazil $0.07 $0.84 $1.38 $1.76U.A.E. $0.03 $0.48 $0.79 $1.00

Turkey $0.09 $1.05 $1.72 $2.20

Thailand $0.04 $0.65 $1.06 $1.35

Per$100of the gross invoice amount


36/46

EXPORT-IMPORT BANK

of theUNITEDSTATES

EXPORT-IMPORT BANK

of theUNITEDSTATES


Post-ExportFinancing Solutions:Post-ExportFinancing Solutions:

When a Foreign BuyerNeedsMedium-TermorLong-TermFinancing


37/46

Medium-Term Insurance andGuaranteesMedium-Term Insurance andGuarantees

Capital equipment sales and related services

Lease transactions

Finance Lease: Insurance or Guarantee

Operating Lease: Insurance only

Used equipment OK up to 3 year terms

Buyer criteria per Medium-Term CreditStandards

Minimum 3 year history

Reliable financial statements (audited if creditexceeds $1 million)

Buyer must meet certain financial ratios


38/46

Medium-Term Insurance andGuaranteesMedium-Term Insurance andGuarantees

15% downpayment required (may be financedby the lender)

100% coverage of the remaining 85% on both

principal and interest on loans made by lenders

directly to foreign buyers or on credit terms

extended to foreign buyers by exporters

1 to 5 year repayment, exceptionally 7 years

and < $10 million

Generally limited to buyers in developing

markets


39/46

Medium-Term Insurance & Guarantees:Pricing Indications (example)Medium-Term Insurance & Guarantees:Pricing Indications (example)

Private-sector, corporate borrowers, 5 year tenor, fortransactions under $10 million

Country InsurancePremium

GuaranteeExposure

FeeMexico 1.92 % 1.94 %Brazil 4.69% 4.76 %Russia 3.14% 3.19%

Refer to Fee Calculator on www.exim.gov

One-time (flat) fee (may be financed)

Under Guarantee program, a 0.125% p.a. commitment feeapplies

(accrues 60-days from approval date)


40/46

Long-Term Financing SupportLong-Term Financing Support

Generally used for buyer financing in amountsover $10 million and 7 to12 year repaymentterms

Generally, large-ticket items (aircraft) and

project finance receive long-term support

15% down payment / Ex-Im Bank supports100% of the remaining 85% (the financedamount)

Loan Guarantees

Direct Loans


41/46

Success Story:PowerLight CorporationSuccess Story:PowerLight Corporation

Challenge: Designer/operator of grid-connected solar power systems needed toprovide equipment and services for a Koreanproject, and arrange attractive financing for

the buyer Solution: A $7.8 million Ex-Im Bank medium-

term loan guarantee was put in place. Thelender was City National Bank of Los Angeles

Result: PowerLight was the first exporter tobenefit from the new 15-year repaymentterms available to support U.S. exports forrenewable energy, water and hydroelectricpower projects


42/46

Success Story:Le Tourneau Technologies, Inc.Success Story:Le Tourneau Technologies, Inc.

Challenge: To provide competitive financingto construct a mobile offshore oil and gasexploration and drilling rig in Mexico

Solution: A $54 million long-term Ex-Im Bankguarantee (8.5 years) was issued to thelender, BBVA Bancomer of Mexico City. Sucha loan was not available without Ex-Im Bankssupport

Result: With the guarantee in place, LeTourneau won this $129 million contractover its competitors


43/46

Ex-Im Bank OnLineEx-Im Bank OnLine

Our new, web-based application andtransaction management system makes iteasier for exporters and lenders to use Ex-ImBank products

Automation of our primary businessprocesses, particularly for those most used bysmall businesses:

All exporter insurance policies (ST and MT)

Lender policies for ST and MT buyer credits,letters of credit, foreign dealer policy

MT guarantees under $10 million


44/46

How Can We Help YOU?How Can We Help YOU?

Expand international salesBoost borrowing power

Speed cash flow

Enter new markets

Mitigate risks and losses


45/46

Ex-Im Bank PartnersEx-Im Bank Partners

Additional resources and assistance in

applying for Ex-Im Bank products are

available from:

Insurance Brokers (see list on www.exim.gov)

City/State Partners (see list on www.exim.gov)

Delegated Lenders (see list on www.exim.gov)

US Export Assistance Centers (USDOC and SBA)


46/46

For More InformationFor More Information

Call the Ex-Im Bank Regional Office near you:

New York: 212-809-2650 (Northeast / Mid-Atlantic)

Chicago: 312-353-8081 (Midwest)

Miami: 305-526-7436 (Southeast)

Houston: 281-721-0470 (Southwest)

Newport Beach: 562-980-4580 (West)

San Francisco: 415-705-2285

San Diego: 619-557-7091

800-565-3946 [exim]

Web Site: www.exim.gov