AmCham Bahrain in partnership with the Export-Import Bank of the United States (EXIM), Business Council for International Understanding (BCIU), and the Commercial Services of the US Department of Commerce invites U.S. Companies to learn more about EXIM’s new Covid-19 Relief Programs on Wednesday 3 June 2020, 4:00-5:00pm (GMT+3).
Registration: Click to Register
* Event free with the following code: BCIUGuest2020
Steve Renna, EXIM Chief Banking Officer - Brief overview of EXIM programs
David Fiore, EXIM Vice President – Explanation of EXIM’s Covid-19 relief programs
On March 25, the U.S. Export Import Bank’s (EXIM) Board of Directors unanimously approved four new, time-limited emergency measures. The measures will temporarily expand the types of financing EXIM can provide as part of the U.S. government’s efforts to address and mitigate the economic crisis in the coming months. The emergency measures will be in place for one year from May 1, 2020, although a few implementation details are still being worked out. EXIM currently has about $80 billion available under its $135 billion overall financing cap that could be deployed for these emergency measures as well as regular business.
Bridge Loan Product:
--- This is a new EXIM financial product, which can be structured as either a direct loan or a loan guarantee. This product is available to foreign borrowers for an initial period of one year and could be extended depending on economic conditions and demand. The financing schedule gives borrowers the option to extend financing through several periods of the transaction’s full repayment term. These periods will be determined based on the export, its total repayment, and the availability of private financing. EXIM will incrementally collect its exposure fee as the borrower elects to extend the financing period. The fee structure incentivizes borrowers to find private sector financing prior to extending their EXIM financing. EXIM will encourage borrowers in its informational products to refinance in commercial markets at the earliest opportunity, assuming market conditions provide this opportunity. Please see the EXIM factsheet on changes to this product: www.exim.gov/coronavirus-response/fact-sheet-exim-establishes-bridge-financing-program.
Supply Chain Financing Guarantee Program:
--- EXIM currently provides a 90 percent guarantee to a participating lender that purchases accounts receivable from suppliers of an approved exporter. The change temporarily waives the previous requirement that transactions include small business involvement in 50 percent of the supply chain and allows EXIM to finance the distribution of U.S. products through foreign affiliates, which in turn sell the products to foreign buyers. EXIM’s board is also considering increasing its guarantee from 90 to 95 percent, eliminating almost the entirety of risk for the lender, although a final policy has yet to be determined. This product will provide U.S. businesses in the supply chain the immediate liquidity they need, especially lower investment grade companies. The changes are designed to incentivize lenders to underwrite weaker credits, which are particularly impacted by the crisis when all credits are adversely impacted. Please see the EXIM factsheet on changes to this product: www.exim.gov/coronavirus-response/fact-sheet-background-on-supply-chain-financing-guarantee-program
Working Capital Guarantee Program:
--- This product facilitates loans to U.S. businesses that export over the term of the loan and is an asset-based lending program under which financing is determined by the borrower’s export-related inventory and accounts receivable. This product previously covered 90 percent of the principal and accrued interest of the loan. EXIM will now temporarily expand its financing beyond only export-related inventory to all of the borrower’s inventory that could potentially be exported, which will increase the eligible collateral for an EXIM guarantee, and thereby, the amount of working capital EXIM can support. As with the modified supply chain product, EXIM’s board is considering increasing its guarantee from 90 to 95 percent, although a final policy has yet to be determined. Please see the EXIM factsheet on changes to this product: www.exim.gov/coronavirus-response/fact-sheet-background-on-working-capital-guarantee-program
Pre-Delivery / Pre-Export Financing Program:
--- EXIM currently allows periodic disbursements for pre-export payments (through direct loans or loan guarantees) to U.S. manufacturers during the manufacturing process when EXIM is providing the medium- or long-term financing associated with the export. This product is most often used to facilitate exports of long-lead time manufactured products, such as satellites, large turbines, and other capital goods requiring extensive customization. The major change under the new product will allow EXIM to provide pre-delivery financing even when it is not providing the long-term financing for a one-year period. This benefit will now be available to certain industries, such as aviation and the locomotive industries, where commercial lenders may no longer be willing to finance pre-export payments. This could be extended depending on demand and economic conditions beyond the initial one-year program period. Please see the EXIM factsheet on changes to this product: www.exim.gov/coronavirus-response/fact-sheet-exim-temporarily-expands-pre-export-payment-program