Filling The Gap With $20B In Guarantees
11-03-2009 | Source: Air Finance Journal
Export credit agencies have been breaking records with support for
Airbus and
Boeing in one of the toughest years on record, writes
Sophie Segal.
The export credit agencies have gone above and beyond any banker’s expectations this year. Funding about $20 billion-worth of Airbus and Boeing aircraft, with government-guaranteed loans, seems to have bridged the funding gap that several aviation banks warned about at the end of 2008.
“The big news, is the volume of export credit this year,” says Robert Morin, executive vice-president, transportation, US Ex-Im Bank. “But that’s the role that export credit agencies are supposed to play. It’s counter cyclical – as the banks withdrew their support, the ECAs stepped up.”
Almost a year ago several banks had shut their doors to aviation clients. Some were not even open to lend export credit, which involves virtually no risk to the lender. Each bank that lends in an export credit transaction ultimately has a guarantee from the US or European governments