export-import bank of the united states working capital guarantee program
DESCRIPTION
Export-Import Bank of the United States Working Capital Guarantee Program. Presented by: Walt Trask Vice President International Trade Finance March 23, 2011. Overview of Ex-Im Bank. Official U.S. Export Credit Agency (“ECA”) Founded 1934 - PowerPoint PPT PresentationTRANSCRIPT
Export-Import Bank of the
United States
Working Capital Guarantee Program
Presented by:
Walt Trask
Vice President
International Trade Finance
March 23, 2011
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Official U.S. Export Credit Agency (“ECA”)
Founded 1934
Purpose: Facilitate financing of U.S. exports of
goods/services and thereby create jobs
No minimum or maximum transaction size
In FY 2010 export financing surged to $24.5B supporting
$34.4B of exports and 277,000 jobs
Overview of Ex-Im Bank
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A reasonable source of repayment
“On cover” in the buyer’s country
Goods must have U.S. content (labor, materials and mark-
up) of at least 50%
Goods must be shipped from the U.S.
Ex-Im Bank Working Capital Guarantee
Basic Requirements
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Short-term export credit insurance covering extended
payment terms out to 180 (exceptionally 360) days
Medium and long-term programs covering exports of capital
equipment on extended payment terms out to five years or
longer
Working capital guarantee for pre-shipment finance
Main Products
Ex-Im Bank Working Capital Guarantee
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Supports companies of all sizes but mainly small and
medium-size firms
Provides a guarantee to lenders for an exporter’s working
capital needs
Can be either transaction specific or revolving
Can also support establishment of standby letters of credit
and indirect exports
Ex-Im Bank Working Capital Guarantee
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Provides needed cash to finance exports
Increases lenders appetite for financing exports by receiving
a 90% government guarantee
Provides financing for foreign account receivables
Allows exporters to fill large or seasonal orders
Allows exporters to expand collateral base Export-related inventory, including P.O.s, raw materials and WIP
Foreign Account Receivables included in Borrowing Base
Ex-Im Bank Working Capital Guarantee
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Ex-Im Bank guarantees 90% of principal and interest on a
loan facility made to an exporter.
Loan is fully collateralized by export-related inventory and
A/R.
Generally one year but up to three years.
Covers exporter performance risk.
Basic Parameters
Note: Provides no protection to exporter against foreign buyer non-payment.
Ex-Im Bank Working Capital Guarantee
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Transaction Specific
Transaction Specific
Revolving
Revolving Multiple transactions or
specifically identified ones
May be committed for up to
three years with annual reviews
Lines of Credit
Ex-Im Bank Working Capital Guarantee
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Manufacturers
Trading companies
Wholesalers/distributors
Service companies
Types of Exporters
Ex-Im Bank Working Capital Guarantee
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An Ex-Im Bank guarantee facility can support the following
types of LCs: Commercial or standby (domestic and foreign)
Collateralized at 10% - 25%
Term cannot exceed loan term
Warranty letters of credit
Lender extends other credit
100% collateralized, 25% in cash
Maximum: 20% of loan or $500,000
Term cannot exceed loan term
Letters of Credit
Ex-Im Bank Working Capital Guarantee
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Risk mitigation
Competitiveness/marketing Move existing customers to terms
Financing tool Ability to assign foreign receivables
Accurate cash flow
Trade Finance “Export Solutions” Notes
Ex-Im Bank Export Credit InsuranceExporter Benefits
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Line of Business U.S. company that designs, engineers, manufactures and sells control instruments for the abatement of air pollution. Source domestically and globally. Primarily exports to China and select countries in Asia, Middle East and South America.
Requirements Working capital to support international sales (financing for foreign A/R and export destined inventory)
Risk mitigation for emerging market sales
Efficiency in trade process
Solution Optimize Working Capital:• $7MM working capital loan backed by Ex-Im Bank guarantee
Mitigate Risk:• Letters of credit (export, import, standby)
• Ex-Im Bank short term insurance for China
• Private credit insurance
Reduce Costs/Simplify Trade Process:• Comerica GlobalTRADE Web
Solutions That Work
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Line of Business Fortune 200 energy, grains and foods company that sells internationally
Requirements Risk mitigation for international sales
Working capital to support large sales to Asia (accelerate collection of accounts receivable)
Solution Mitigate Risk:• Export letters of credit
Optimize Working Capital:• Financing under export letters of credit (discounted drafts)
Solutions That Work
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Line of Business Small Business company that designs and manufactures machine tools used in wheel manufacturing, roll forming, dies, metal processing systems, and exhaust technology. Sources and manufactures domestically. Sells into China, India, Mexico, South America, and Europe.
Requirements Working capital to support international sales (financing for foreign A/R and export destined inventory)
Risk mitigation for international sales
Solution Optimize Working Capital:• $25MM working capital loan backed by Ex-Im Bank guarantee including
standby letters of credit to support advance payments and progress billings.
Mitigate Risk:• Letters of credit (export, standby)
• Ex-Im Bank support of open account terms with Chinese buyers
Solutions That Work
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MIDWEST MARKET
Richard J. Barney 313-222-6228 Detroit, MI
Cheyenne N. Carson 313-222-3735 Detroit, MI
Scott K. Hibbard 616-776-7888 Grand Rapids, MI
Gary K. Luxon 313-222-4903 Detroit, MI
Anita L. March 630-645-7383 Oak Brook, IL
Lisa F. Sasaki 313-222-6131 Detroit, MI
TEXAS MARKET
Anita L. March 630-645-7383 Oak Brook, IL
Jean Ortiz 713-220-5611 Houston, TX
WESTERN MARKET
Caroline V. Brown 562-590-2525 Long Beach, CA
Saul Del Real 310-297-2871 El Segundo, CA
Tim Murphy 562-463-6530 City of Industry, CA
Walt Trask 415-477-3366 San Francisco, CA
International Trade Finance Contacts