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Filling the gap with $20bn in guarantees
26 October 2009
Export credit agencies have been breaking records with support for Airbus and Boeing in one of the toughest years on record, writes Sophie Segal.
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[Export credit]
[ECA]
[Ex-Im]
[Funding Gap]
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.
Where were the banks?
“The worst time was the...
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