Jobs Through Exports

EXPORT-IMPORT BANK of the UNITED STATES

EXPORT-IMPORT BANK of the UNITED STATES

M&L-T 1

Ex-Im Bank:Trade Financing SolutionsEx-Im Bank:Trade Financing Solutions

M&L-T 2

Ex-Im Bank IntroductionEx-Im Bank Introduction

Export-Import Bank (Ex-Im Bank) is an independent agency of the United States Government Established in 1934

Headquartered in Washington, DC

7 regional U.S. offices

M&L-T 3

Ex-Im Bank Introduction (cont’d.)Ex-Im Bank Introduction (cont’d.) Official export credit agency of the United

States

Mission: assist in financing the export of U.S. goods and services to international markets

Does not compete with private sector lenders, but provides export financing products that fill gaps in trade financing

Assumes credit and country risks that the private sector is unable or unwilling to accept

M&L-T 4

U.S. Exports to Sub-Saharan Africa (SSA) Have Increased

U.S. Exports to Sub-Saharan Africa (SSA) Have Increased U.S. exports increased by 28% to $13.6 billion in

the first nine months of 2008 from the same period in 2007

Top Growth Sectors: Machinery Wheat Vehicles and parts Electrical machinery (including telcom equipment) Aircraft Non-crude oil

Top Export Destination Growth: South Africa increased 18% Nigeria increased 55% Angola increased 69% Ghana increased 43 %

M&L-T 5

Ex-Im Bank’s Commitment to Supporting Transactions in Africa

Ex-Im Bank’s Commitment to Supporting Transactions in Africa

Since 1999, Ex-Im Bank has supported

over $4.8 billion in transactions

throughout SSA

For fiscal year ended September 30,

2008, Ex-Im Bank supported 133

transactions totaling $575 million in 20

SSA countries

Total SSA exposure is $2.6 billion

M&L-T 6

FY 2008 Ex-Im Bank SSA Data, Dollar ValueFY 2008 Ex-Im Bank SSA Data, Dollar Value

Ex-Im Bank sub-Saharan Africa Transactionstype of transaction, dollar value, millions USD

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

Working Capital Guarantee $20.24

Short-Term Insurance $106.53

Medium-Term Insurance $13.48

Medium-Term Guarantees $18.12

Long-Term Guarantees $72.90

Long-Term Loans $344.23

FY 2008

Total: $575.50

M&L-T 7

FY 2008 Ex-Im Bank SSA Data, 20 Countries of Business

FY 2008 Ex-Im Bank SSA Data, 20 Countries of Business

AngolaBeninBurkina FasoCameroonEquatorial GuineaGabonGhanaKenyaMadagascarMalawiMaliMauritaniaMauritiusMozambiqueNigeriaSenegalSouth AfricaTanzaniaUgandaZambia

M&L-T 8

Ex-Im SSA Initiative Ex-Im SSA Initiative

SSA is a priority region, as outlined by Ex-Im’s Charter

Establishment of SSA Advisory Committee

Africa Business Development Group Africa Newsletter to for U.S. exporters and African

buyers (available on-line at www.exim.gov/africa)

Short-Term Insurance Pilot Program (STIPP) makes insurance available to exports to 19 SSA countries that would otherwise be ineligible for Ex-Im support

$1 billion Nigerian Banking Facility (NBF) and $40 million Special Delegated Authority (SDA) with the African Export-Import Bank (Afreximbank)

Foreign Currency Guarantees CFA Franc, S. African Rand

M&L-T 9

How Ex-Im Bank Can Assist YouHow Ex-Im Bank Can Assist You

Short-Term Accounts Short-Term Accounts Receivable FinancingReceivable Financing

Medium-Term & Medium-Term &

Long-Term FinancingLong-Term Financing

Export Credit InsuranceExport Credit Insurance

Your NeedsYour Needs Our Our SolutionsSolutions

Export Credit Insurance or Export Credit Insurance or Commercial Loan Guarantees; Commercial Loan Guarantees; Project/Structured Finance; Project/Structured Finance; TransportationTransportation

Pre-export financingPre-export financing Working Capital GuaranteeWorking Capital Guarantee

M&L-T 10

Benefits to International BuyersBenefits to International Buyers IMPROVED CASH FLOW

LOWER INTEREST RATES

EXTENDED TERMS

ESTABLISH CREDIT RECORD

M&L-T 11

Each country is open in different sectors and termsEach country is open in different sectors and terms

http://www.exim.gov/tools/country/country_limits.cfm

M&L-T 12

Where is Ex-Im Bank Available in SSA?Where is Ex-Im Bank Available in SSA?Short-Term: 44 SSA countries

Medium-Term: 29 SSA countries

Long-Term: 16 SSA countries

M&L-T 13

US Content PolicyUS Content Policy

Export must be exported from the United States

51% U.S. content for short-term

transactions

up to 85% U.S. content for medium/long-term transactions (OECD driven)

Services must be performed by US-based personnel, either in the US or in the “host” country

M&L-T 14

Short-Term Export Credit Insurance is Rather Straightforward

Short-Term Export Credit Insurance is Rather Straightforward

U.S.Supplier

EX-IMBank

ForeignBuyer

PaymentGoods and Services

Insu

ran

ceA

pp

lica

tion

M&L-T 15

Short-Term Export Credit Insurance – U.S. Content Requirements

Short-Term Export Credit Insurance – U.S. Content Requirements

For Short-Term products, the gross shipment must have at least 51% U.S. content to support the entire transaction. For Medium Term transactions, U.S. Content must be 85% of the Net Contract Price.

Products must be manufactured in and shipped from the U.S.

M&L-T 16

Short-Term Credit Short-Term Credit StandardsStandardsShort-Term Credit Short-Term Credit StandardsStandards

U.S. supplier submits application along with required information to establish credit limit for foreign buyer.

Info requirements from foreign company for credit limits:

$10,000 credit: favorable trade or bank reference

$10,000-$50,000 credit: current credit report

$50,000-$100,000 credit: current credit report plus favorable bank or trade reference

Greater than $100,000 credit: current credit report, latest 3 years financial statements, and references

M&L-T 17

A Medium/Long-Term Loan Guarantee Involves More Players

A Medium/Long-Term Loan Guarantee Involves More Players

U.S.Supplier

Ex-ImBank

ForeignBuyer

Bank: US/

International

Payment

Goods & Services

Insurance/Loan GuaranteeApplication

F

inan

cial

D

ocu

men

tati

on

Loa

n

Rep

aym

ents

Ex-Im Bank Guarantee

M&L-T 18

Medium/Long-Term Foreign Content PolicyMedium/Long-Term Foreign Content Policy

For medium- and long-term financing, Ex-Im Bank will support the following amounts:

85% of the contract price if eligible foreign content is 15% or less

Greater than 15% eligible foreign content, Ex-Im will support U.S. content only

M&L-T 19

Medium/Long-Term Foreign Content PolicyMedium/Long-Term Foreign Content Policy

95%

U.S. Content

Eligible Foreign Content

Ex-Im support

available for 85% of

contract price

Ex-Im support

available for 60% of contract

price

Company A Company B

5%

60%

40%

M&L-T 20

This is a Standard Medium/Long-Term Financing Model

Net contract price $ 1,000,000

Cash payment (15%) (150,000)

Financed portion $ 850,000

Exposure fee @ 10% +85,000

Total financed $ 935,000

M&L-T 21

Sample Medium/Long-Term Sample Medium/Long-Term Credit StandardsCredit StandardsSample Medium/Long-Term Sample Medium/Long-Term Credit StandardsCredit StandardsPositive Operating Profit during last

2 yearsPositive Net Income during last 2

yearsPositive Cash-Flow-From-

Operations (latest year)EBITDA/Debt Service > 150%Total Liabilities/Total Net Worth <

175%Ex-Im Exposure/Total Net Worth <

40%

M&L-T 22

Direct Loans are becoming more commonDirect Loans are becoming more common

Repayment Term CIRR Rate*

Up to 10 Semi-Annuals (S/As)

2.07%

> 10 S/As up to 17 S/As

2.52%

> 17 S/As 2.89%

*Commercial Interest Reference Rate is for January 15, 2009 - February 14, 2009

Transactions are normally:

Over $10 million, and

Used for financing purchases of U.S. capital equipment and services, and exports to large-scale projects.

Fixed rate

M&L-T 23

Project/Structured FinanceProject/Structured Finance

Project or “limited recourse project financing” means debt repayment comes solely from project cash flow, i.e., future project revenues.

Even with Ex-Im Bank support, lenders need: Strong off-take contracts Technical comfort that project will be fully funded,

constructed on time, and operated efficiently Reliable / creditworthy parties: sponsors,

constructors, operator, and output purchasers Appropriate risk-sharing among project parties

M&L-T 24

Project Finance StructureProject Finance Structure

InputContractsGuaranteed supply of inputs to project

SPVMade up of project

sponsors that provide equity. SPV is the

borrower.

Off TakerProvides revenue stream to project.

Must be creditworthy.

EPCLikely source of

U.S. content. Must show technical

experience.

O&MContract with capable firm

extends beyond repayment term.

Host GovernmentLegal /regulatory framework & evident support

M&L-T 25

Differences between Structured & Project Finance

Differences between Structured & Project FinanceStructured (Typical)

Existing company borrower financing an expansion

Full recourse to borrower

Analyze historical and projected future cash

Limited “perfection of security”

Can finance 85% of project cost (subject to U.S. content)

Project Finance

SPV borrower financing green-field project or expansion

Limited recourse to parent companies

Analyze project’s future cash flows

Complex documentation to perfect security

More than 15% equity required, so total debt provided less than 85%

M&L-T 26

Transportation/AircraftTransportation/Aircraft

Asset Based financing for aircraft

Ex-Im Bank takes a lien on aircraft

Exposure fee assessed on each transaction

Lower exposure fees in countries that sign, ratify and implement the Cape Town Convention

M&L-T 27

Our special initiatives allow for enhancementsOur special initiatives allow for enhancementsEx-Im Bank will provide additional

enhancements for certain types of transactions

Environmental

Medical

Transportation Safety

Enhancements Include

Capitalized interest during construction

Extended maximum allowable repayment terms (7 years, Medium-Term; 15 years Long-Term)

M&L-T 28

Ex-Im Bank has several main policiesEx-Im Bank has several main policiesShipping (Only for All Direct Loans and

Guarantees over $20 million)

Foreign content

Local Costs Ex-Im Bank can support up to 30%

of the US contract value in costs incurred in the buyer’s country

Military Ex-Im Bank cannot consider Military

exports

M&L-T 29

Ex-Im Bank’s due diligence is both qualitative and quantitative

Ex-Im Bank’s due diligence is both qualitative and quantitative Ex-Im Bank’s comprehensive

assessment evaluates both financial and non-financial aspects of the transaction

“Know Your Customer” principles

Corporate governance issues

Management capacity and track record

Financial adequacy cash-flows; debt serviceability

Transaction sensibility – “Want vs. Need”

M&L-T 30

Application Processing has Several StepsApplication Processing has Several Steps Application review

Loan officer/Insurance underwriter review

Engineering review

Approval - Loan Committee or Board

Legal review - documentation and closing

Credit Administration - disbursement

M&L-T 31

Strategic Initiatives, AfricaStrategic Initiatives, Africa

Benjamin Todd, Business Development Officer – Africa

Email: ben.todd@exim.gov

Tel: 202-565-3916

Fax: 202-565-3839

Jobs Through Exports

EXPORT-IMPORT BANK of the UNITED STATES

EXPORT-IMPORT BANK of the UNITED STATES

M&L-T 32

Back-Up SlidesBack-Up Slides

M&L-T 33

Success Stories: Working CapitalSuccess Stories: Working Capital

Ex-Im authorized a Multi-Buyer Working Capital Loan Guarantee for Kazar International of San Francisco for $877,500.  This authorization allows Kazar International to facilitate its machinery and equipment export operations to many countries, including Senegal and Mauritania.

M&L-T 34

Success Stories: Short-TermSuccess Stories: Short-Term

Valley Grain, Inc. DBA Kapa Seed Service of Quincy, Washington sold seed valued at $99,000 to its customer, Gellman Seeds of South Africa using an Ex-Im Bank ST Multi-buyer comprehensive policy.

M&L-T 35

Success Stories: Medium-TermSuccess Stories: Medium-Term

Jacaranda Plant and Machinery Hire Company of Zambia imported an STX 480 horsepower tractor supplied by CNH America LLC of Racine, Wisconsin.  Ex-Im Bank guaranteed the $285,332 transaction through its Medium-Term Loan Guarantee product.

M&L-T 36

Ghana Success Stories: Long-Term LoanGhana Success Stories: Long-Term LoanWELDY-LAMOT ASSOCIATES INC. WINS $350 MILLION

RURAL ELECTRIFICATION TURNKEY CONTRACT FROM THE GOVERNMENT OF GHANA

$350 million rural electrification turnkey contract from the government of Ghana, and will procure equipment and services from U.S. suppliers around the country to fill the order backed by a $344 million loan from Ex-Im Bank.

An estimated 45 percent of the contract price will go to small businesses.

The government of Ghana sees the ongoing program to bring electrical connectivity to the populace of Ghana as the underpinning for the country's economic growth and poverty reduction. The goal is to connect all eligible communities with a minimum population of 500 individuals, or approximately 3,800 villages, to the national grid by 2020.

M&L-T 37

Project Finance Success Story: Nigeria LNGProject Finance Success Story: Nigeria LNG Ex-Im Bank provided a $135 million comprehensive

guarantee allowing Nigeria LNG Ltd to purchase US-made equipment needed as part of a $1.9 billion expansion of its liquid natural gas production.

The transaction is a blend of project finance risk and corporate credit risk offered on a repayment term of 8.5 years

The expansion of Nigeria LNG's production capacity will produce economic and environmental benefits to Nigeria, as well as, US jobs.

This expansion will help Nigeria meet its stated objective to reduce the open burning (gas flaring) of natural gas.

Kellogg Brown and Root, a Houston, Texas international engineering and construction company is the US exporter for this transaction. Citibank N.A., London is the guaranteed lender.

Four export credit agencies (ECA) and one development bank are participating in financing Nigeria LNG's production expansion project called NLNGPlus. The ECA lenders (Ex-Im Bank, SACE, NCM and ECGD) and the Africa Development Bank are providing $720 million of the $1.1 billion in financing raised for this project.

M&L-T 38

14 Nigerian Banks in $1 billion Nigerian Banking Facility

14 Nigerian Banks in $1 billion Nigerian Banking Facility

Access Bank www.accessbankplc.com

Afribank www.afribank.com

Diamond Bank www.diamondbank.com

Ecobank www.ecobank.com

Fidelity Bank www.fidelitybankplc.com

First Bank www.firstbanknigeria.com

First City Monument www.firstcitygroup.com

Guaranty Trust Bank (GTB) www.gtbplc.com

Investment Banking & Trust Company (IBTC) www.ibtc.com

Intercontinental Bank www.intercontinentalbankplc.com

Oceanic Bank www.oceanicbanknigeria.com

Skye Bank www.skyebanking.com

Union Bank www.unionbankng.com

Zenith Bank www.zenithbank.com

M&L-T 39

SSA Country Exposure, leading countriesSSA Country Exposure, leading countries

Country Amount ($M)

Leading Export

Angola $295 Aircraft

Côte d’Ivoire $152 Rescheduled Loans

Democratic Republic of

Congo

$192 Rescheduled Loans

Ethiopia $231 Aircraft

Ghana $563 Oil and Gas; Electricity

Transmission

Kenya $431 Aircraft

Nigeria $412 Oil and Gas; Aircraft

South Africa $112 Aircraft