2008-wdtc-ex-im-bank

EXPORT-IMPORT BANK of the UNITED STATES


Jobs Through Exports

Ex-Im Bank

U.S. Exporter Product Overview

Video Presentation

Ex-Im Bank

U.S. Exporter Product Overview

Video Presentation




Ex-Im Bank 101:Ex-Im Bank 101:

The Basics

Who We Are — What We DoWho We Are — What We Do

Ex-Im Bank is an independent agency of the United States government Established in 1934

Headquartered in Washington, DC

5 regional business development offices plus 2 satellite locations in CA (San Diego and San Francisco)

Mission: Support US exports in order to create and sustain US jobs

Ex-Im Bank Regional OfficesEx-Im Bank Regional Offices

Newport

Beach

Newport

Beach

ChicagoChicago

NewNew YorkYork

MiamiMiami

HoustonHouston

San Francisco

San Diego

Eligibility CriteriaEligibility Criteria

No Defense Articles or Services, or Military Buyers

Exceptions may be made for humanitarian purposes, drug interdiction, dual-use items


US Content

51% for short-term transactions

85% for medium-term transactions

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


Country Eligibility

Support available in over 155 countries

Restrictions may apply for political or economic reasons

Refer to the Country Limitation Schedule (CLS) at www.exim.gov on the homepage under “Shortcuts”

http://www.exim.gov/

How We Help Increase Your Export SalesHow We Help Increase Your Export SalesMinimize risks

Level the playing field

Supplement commercial financing

Foreign Export Credit AgenciesForeign Export Credit Agencies

EDC Canada ECGD UK Coface France EulerHermes Germany JBIC Japan Sace Italy KEIC, Keximbank S. Korea OeKB Austria Efic Australia

Your foreign competitors have similar supportYour foreign competitors have similar support

Small Business IS Our BusinessSmall Business IS Our Business

86% of all Ex-Im Bank transactions supported small business exports!

90% of total working capital guarantees -- ($990 million)

90% of total short-term insurance policies -- ($2.1 billion)

MT loans and guarantees -- $275 million

$525 million in working capital guarantees and export credit insurance supported exports by minority or woman-owned businesses

FY 2008 at a GlanceFY 2008 at a Glance

Total Authorizations: $12.6 billion

Major Sectors: Transportation: $4.7 billion

Environmental: $82 million

Energy: $2.0 billion

Agriculture: supported $1 billion in export value

Services: supported $1.6 billion in export value

Trade Terms as a Spectrum of RiskTrade Terms as a Spectrum of Risk

Seller RiskSeller Risk Trade TermsTrade Terms Buyer Buyer RiskRisk

HighHigh LowLow

Open AccountOpen Account

Cash Against DocumentsCash Against Documents

Sight Letters of CreditSight Letters of Credit

Usance / Deferred Letters of CreditUsance / Deferred Letters of Credit

Payment in AdvancePayment in Advance

LowLow HighHigh

Ex-Im Bank Support Covers the SpectrumEx-Im Bank Support Covers the Spectrum

Pre-Export Financing

Post-Export Financing

Working Capital

Guarantee

InsuranceGuarantees

Direct Loans




Pre-Export Financing:Pre-Export Financing:Export Working Capital Guarantee Program

Working Capital Guarantee (WCG)Working Capital Guarantee (WCG)

Assists small and mid-size companies in obtaining working capital to produce or purchase US goods and services for export

Provides a 90% guarantee of repayment (principal and interest) on loans to exporters

May be set up as “Transaction-Specific” or a “Revolving” Line of Credit

Working Capital GuaranteeWorking Capital Guarantee

No minimum or maximum amounts

Loan supports advances made against export-related inventory (including WIP) and foreign receivables:

Up to 75% advance rate on inventory, and up to 90% on foreign receivables


Assists US-based transportation logistics providers in obtaining working capital to facilitate the export of commercial cargo on US-flag ships

Uses accounts receivable as collateral for the loan

Transportation Freight Financing (TFF) ProgramTransportation Freight Financing (TFF) Program


Funds may be used to provide services directly related to the logistics involved in the export of commercial cargo such as: Ocean, air, rail and truck freight

Cargo and marine insurance

Crating and packing

Port drayage; warehousing

Terminal, forwarder and broker fees

Transportation Freight Financing (TFF) ProgramTransportation Freight Financing (TFF) Program


Asset-Based: fully collateralized Personal guarantees are required of owner(s)

Cost: $100 application fee Up to 1.5% facility fee – Reduced fee if:

Exports sales structured under L/Cs and/or secured by export credit insurance; exporter’s financial ratios are within its industry median

A lower fee may be negotiated with a “Delegated Authority” Lender (see list on www.exim.gov)

Interest rate is determined by the lender

WCG Increases Borrowing PowerWCG Increases Borrowing Power

Success Story: Callidus Technologies LLCSuccess Story: Callidus Technologies LLC

Challenge: Small business, environmental engineering firm needed cash to open stand-by L/C’s (performance bonds) with the buyer as beneficiary during production of the equipment.

Solution: Lender funded a $5mm Ex-Im Bank guaranteed working capital line of credit, with the exporter collateralizing only 25% of the stand-by L/C amount.

Result: The firm was able to accept one of the largest orders ($16 million) in its history, and added 70 new employees.




Post-Export Financing:

Post-Export Financing: Short-TermExport Credit Insurance

Short-Term Export Credit InsuranceShort-Term Export Credit Insurance

Protects U.S. exporters against non-payment by foreign buyers due to: Commercial Risks

Political Risks

Allows exporters to offer competitive credit terms to foreign buyers Generally up to 180 days, some products may

qualify for 360 day terms

Obtain additional financing Insured foreign receivables may be added to

your borrowing base by assignment of policy proceeds (claim payments) to lender

Risks CoveredRisks Covered

Commercial Risks

Insolvency

Bankruptcy

Protracted default

Political Risks Transfer risk

War, revolution, insurrection, expropriation

Cancellation of an import or export license


Coverage:

Up to 180 days, exceptionally 360 days (for capital equipment and bulk, unprocessed agricultural products)

Commercial and political risks


Lender Policies: Bank Letter of Credit

Financial Institution Buyer Credit

Financial Institution Supplier Credit

Foreign Dealer Insurance Policy (may roll to MT)

Exporter Policies: Multi-Buyer or Single-Buyer

Small Business Multi-Buyer PolicySmall Business Multi-Buyer Policy

Coverage: No 95% commercial and 95% political

Exporter must qualify as “small business” by SBA definition, and: No more than $5 million in export

credit sales over the past 2 years

1 year successful operating history

Small Business Multi-Buyer PolicySmall Business Multi-Buyer Policy

Must insure ALL export credit sales (L/C, CIA, CAD, SDDP sales may excluded)

Refundable advance premium: $500

No deductible, no application fee, “pay-as-you-ship”, no minimum premium requirement

Small Business Multi-Buyer Premium Rates (example)Small Business Multi-Buyer Premium Rates (example)

Term Sovereign

FinancialInstitutio

ns

Private

Sight L/Cs $0.04 $0.04 N/A

1-60 days $0. 19 $0. 24 $0.65

61-120 $0. 32 $0. 39 $1.06

121-180 $0. 41 $0. 50 $1.35

181-270 $0. 51 $0. 63 $1.70

271-360 $0. 62 $0. 77 $2.08 Per $100. of the gross invoice amount

25% rate reduction if used with Ex-Im/SBA Working Capital Guarantee product!

Standard Multi-Buyer PolicyStandard Multi-Buyer Policy

For experienced exporters with over 500 employees and /or $5mm in annual export credit sales

Must insure ALL export credit sales(L/C, CIA, CAD, SDDP may be excluded)

On a case-by-case basis, exporter may request to exclude certain buyers (“Reasonable Spread of Risk”)

Standard Multi-Buyer PolicyStandard Multi-Buyer Policy

Coverage:

95% for both commercial and political risks

Buyer credit limits endorsed to policy (requires minimal pre-approvals by Ex-Im Bank)

No minimum premium, “pay-as-you-ship”

Success Story: Pharmaceutical Trade Services, Inc.

Success Story: Pharmaceutical Trade Services, Inc.Challenge: Exporter of specialized

prescription drugs needed to extend competitive credit terms to get larger orders

Solution: The company used the small business multi-buyer policy as a marketing tool to extend net 45 day terms and increase sales

Result: The company’s export sales volume increased over a 7 year period from $713,000 to nearly $6 million, and the staff grew to 15 employees

Single Buyer Insurance PolicySingle Buyer Insurance Policy

Buyer-specific policy

Insures a single sale or multiple sales to one buyer

90% coverage, both commercial and political; 95% for letters of credit

Maximum policy period: 1 year

No deductible, No application fee

Single Buyer Insurance Policy (con’t.)Single Buyer Insurance Policy (con’t.) Premium based on country and length of

credit terms (see rates on www.exim.gov)

Charged on sales volume (not credit limit)

Pay-as-you-ship

Reduced minimum premium for “small business” exporters


Single-Buyer Rates (private sector)(example)

Single-Buyer Rates (private sector)(example)

Country

SightL/C

Up to 60days

61-120days

121-180days

Mexico $0.03 $0.48 $0.79 $1.00Brazil $0.07 $0.84 $1.38 $1.76U.A.E. $0.03 $0.48 $0.79 $1.00Turkey $0.09 $1.05 $1.72 $2.20Thailand

$0.04 $0.65 $1.06 $1.35

Per $100 of the gross invoice amount




Post-Export Financing Solutions:

Post-Export Financing Solutions:When a Foreign Buyer Needs Medium-Term or Long-Term Financing

Medium-Term Insurance and GuaranteesMedium-Term Insurance and GuaranteesCapital equipment sales and related

services Lease transactions

Finance Lease: Insurance or Guarantee Operating Lease: Insurance only

Used equipment OK up to 3 year termsBuyer criteria per Medium-Term Credit

Standards Minimum 3 year history Reliable financial statements (audited if

credit exceeds $1 million) Buyer must meet certain financial ratios

Medium-Term Insurance and GuaranteesMedium-Term Insurance and Guarantees 15% downpayment required (may be

financed by the lender)

100% coverage of the remaining 85% on both principal and interest on loans made by lenders directly to foreign buyers or on credit terms extended to foreign buyers by exporters

1 to 5 year repayment, exceptionally 7 years and < $10 million

Generally limited to buyers in developing markets

Medium-Term Insurance & Guarantees:Pricing Indications (example)

Medium-Term Insurance & Guarantees:Pricing Indications (example)

Private-sector, corporate borrowers, 5 year tenor, for transactions under $10 million

Country Insurance

Premium

Guarantee

Exposure Fee

Mexico 1.92 % 1.94 %Brazil 4.69% 4.76 %Russia 3.14% 3.19%

Refer to “Fee Calculator” on www.exim.gov One-time (flat) fee (may be financed) Under Guarantee program, a 0.125% p.a. commitment fee applies (accrues 60-days from approval date)


Long-Term Financing SupportLong-Term Financing Support Generally used for buyer financing in

amounts over $10 million and 7 to12 year repayment terms

Generally, large-ticket items (aircraft) and project finance receive long-term support

15% down payment / Ex-Im Bank supports 100% of the remaining 85% (the financed amount)

Loan Guarantees Direct Loans

Success Story: PowerLight CorporationSuccess Story: PowerLight Corporation

Challenge: Designer/operator of grid-connected solar power systems needed to provide equipment and services for a Korean project, and arrange attractive financing for the buyer

Solution: A $7.8 million Ex-Im Bank medium-term loan guarantee was put in place. The lender was City National Bank of Los Angeles

Result: PowerLight was the first exporter to benefit from the new 15-year repayment terms available to support U.S. exports for renewable energy, water and hydroelectric power projects

Success Story: Le Tourneau Technologies, Inc.

Success Story: Le Tourneau Technologies, Inc. Challenge: To provide competitive

financing to construct a mobile offshore oil and gas exploration and drilling rig in Mexico

Solution: A $54 million long-term Ex-Im Bank guarantee (8.5 years) was issued to the lender, BBVA Bancomer of Mexico City. Such a loan was not available without Ex-Im Bank’s support

Result: With the guarantee in place, Le Tourneau won this $129 million contract over its competitors

Ex-Im Bank OnLineEx-Im Bank OnLine

Our new, web-based application and transaction management system makes it easier for exporters and lenders to use Ex-Im Bank products

Automation of our primary business processes, particularly for those most used by small businesses: All exporter insurance policies (ST and

MT) Lender policies for ST and MT buyer

credits, letters of credit, foreign dealer policy

MT guarantees under $10 million

“How Can We Help YOU?”“How Can We Help YOU?”

Expand international sales

Boost borrowing power

Speed cash flow

Enter new markets

Mitigate risks and losses

Ex-Im Bank Partners Ex-Im Bank Partners

Additional resources and assistance in applying for Ex-Im Bank products areavailable from: Insurance Brokers (see list on

www.exim.gov)

City/State Partners (see list on www.exim.gov)

Delegated Lenders (see list on www.exim.gov)

US Export Assistance Centers (USDOC and SBA)



For More InformationFor More Information

Call the Ex-Im Bank Regional Office near you: New York: 212-809-2650 (Northeast / Mid-

Atlantic)

Chicago: 312-353-8081 (Midwest)

Miami: 305-526-7436 (Southeast)

Houston: 281-721-0470 (Southwest)

Newport Beach: 562-980-4580 (West)

San Francisco: 415-705-2285

San Diego: 619-557-7091

800-565-3946 [exim]

Web Site: www.exim.gov
