Title: U'S' ExIm Bank in India
1U.S. Ex-Im Bank in India
- Medical Fair India
- March 2009
2Introduction
- U.S. governments official export credit agency
- Mission is to support U.S. exports to promote
U.S. jobs. - Since establishment in 1934, have supported more
than 400 billion in U.S. exports. - In FY2008, supported financing for exports
valued at over 14.4 billion. -
3Ex-Im Bank in India
- Ex-Im Bank has provided financing to Indian
borrowers in - Aviation
- Telecom
- Oil and Gas
- Energy (including Renewable Energy)
- Heavy Equipment (sales and leases)
- Medical Equipment
- Services (IT)
4Ex-Im Bank in India (as of March 2009)
- Ex-Im Bank India portfolio 3.95 billion
- Breakdown of exposure by debtor type
- Sovereign 1.5 billion
- Public, Non-Sovereign 36 million
- Private 2 billion
5Example of Ex-Im Bank Supported Transactions in
India
- Reliance Infocomm of Mumbai, India obtained 500
million in financing from Citibank to purchase
CDMA telecom equipment from Lucent. - Ex-Im Bank provided Citibank with a long-term
loan guarantee for the transaction.
6Example of Ex-Im Bank Supported Transactions in
India
- Importers Software Services Inc of California
shipped 2.4 million in trade management software
to Helios and Matheson IT of Chennai, India. - The software enabled Helios clients to monitor
their export-import activities to better manage
their sales and purchases.
7Example of Ex-Im Bank Supported Transactions in
India
- Ranbaxy Laboratories Ltd. of New Delhi, India,
purchased plastic pharmaceutical bottles and
closures from Glass Company, Inc. of Boyertown,
PA on 30-day terms using an Ex-Im Bank short-term
insurance policy.
8Example of Ex-Im Bank Supported Transactions in
India
- GENERAL ELECTRIC HEALTHCARE OF WAUKESHA,
WISCONSIN - received a single-sale, multiple shipment medium
term insurance policy from Ex-Im Bank for U.S.
Bank National Association financing for the
export of a new GE MRI Scanner to MRI Scans
Private Ltd of New Delhi, India. This 870,404
transaction qualifies as a medical initiative
under Ex-Im Bank's Medical Equipment Initiative
Program. The equipment provides advanced
diagnostic services to the surrounding community.
9Air India
- Ex-Im Bank has supported financing for Air
Indias fleet renewal with the procurement of
Boeing aircraft.
10Upgrade of Jamnagar Refinery
- Ex-Im Bank recently supported the U.S. content in
the upgrade of Reliance Industries refinery at
Jamnagar amounting to 500 million.
11Special Sector Initiatives
- Ex-Im programs offering special enhancements
- Medical Equipment Initiative (MEI)
- Environmental Exports Program (EEP)
- Transportation Security Exports Program (T-SEP)
12Medical Equipment Initiative (MEI)
- Automatic Local Cost Cover Local cost financing
available on automatic basis for local costs
related to exporters scope of work and
documented up to 15 percent of U.S. contract
value. - Repayment Terms Terms up to seven years offered
for medium-term transactions when consistent with
expected life of product, subject to minimum
contract value of 350,000. - Capitalization of Interest Interest may be
capitalized when there is extended installation
and/or construction period. -
13Export Support Types
- Geared to U.S. exporters / banks
- Working Capital Loan Guarantees
- Short- Medium-Term Insurance
- Geared to foreign buyers / banks
- Medium- Long-Term Loan Guarantees
- Structured Project Finance
14Short-Term Export Credit Insurance
U.S. Supplier
Payment
Insurance
Goods / Services
Foreign Buyer
EX-IM
15Export Credit Insurance
- U.S. exporters apply for policy protection
against foreign credit risk. - Coverage provided against commercial and
political risk associated with default. - Raw materials and consumables coverage up to
180 days. - Bulk agricultural products and light capital
equipment coverage up to 360 days. - Capital goods terms from 360 days to 7 years.
16Export Credit Insurance U.S. Content
Requirements
- For Short-Term products, U.S. content in the
contract is evaluated on an item by item basis. - Products must be manufactured in and shipped
from the U.S.
17Short-Term Credit Process
- 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 - Ex-Ims Loan Officer analyzes application and
makes decision on amount of credit to be
supported.
18Medium- and Long-Term Loan Guarantees
Payment
U.S. Supplier
Bank (U.S. or Intl)
Goods Services
Financials
Loan Guarantee
Foreign Buyer
EX-IM
19Loan Guarantees
- Covers commercial lenders against repayment
risks on foreign buyers debt obligation. - Commits full faith and credit of U.S.
government. - Loan fully transferable can be securitized.
20Loan Guarantees
- Protects 100 of principal and interest on 85
of commercial contract foreign buyer required
to make 15 cash payment. - Negotiated interest rate between Master
Guarantee Agreement (MGA) bank and foreign buyer
(fixed or floating) usually floating rate based
on spread over 6-month U.S. dollar LIBOR rate. -
21Medium- and Long-Term Loan Guarantees
- Medium-Term Loan Guarantees generally used for
U.S. capital equipment, projects, and services
up to 5-year and exceptionally 7-years repayment
terms. - Long-Term Loan Guarantees generally used for
buyer financing of very large items and project
finance over 7-year repayment terms (up to 10
years and occasionally 12 years to 15 years) or
over 10 million.
22Medium-Term credit standards
- Positive Operating Profit during last 2 years
- Positive Net Income during last 2 years
- Positive Cash-Flow-From-Operations (latest year)
- EBITDA/Debt Service gt 150
- Total Liabilities/Total Net Worth lt 175
- Ex-Im Exposure/Total Net Worth lt 40
- Borrowers meeting above standards likely to be
approved. If borrower misses one or more of
standards, Ex-Im will conduct further analysis of
borrowers business to determine whether to grant
approval.
23Military Restrictions
- No Defense Articles or Services
- Exceptions
- Humanitarian purposes
- Drug interdiction
- Dual-use items
24Standard Finance Model
- Net contract price 1,000,000
- Cash payment (150,000)
- Financed portion 850,000
- Exposure fee _at_ 5 42,500
- Total financed
892,500
25Exposure fee
- Determined by
- Country risk
- Percent of cover
- Drawdown period
- Repayment period
- Fee financed
- Timing of fee payment
- General credit risk of the borrower
26Contact information
- Ex-Im web site www.exim.gov
- Business Development
- Talaat Rahman, Middle East Asia
- E-mail Talaat.Rahman_at_exim.gov
- Tel 1-202-565-3911
- Fax 1-202-565-3961