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U.S. exporters are trying to find ways to convince foreign customers not to abandon deals supported by the U.S. Export-Import Bank, which was forced to halt new business at midnight Thursday when its charter expired.
There are about 195 pending transactions still in its approval pipeline that will be frozen by the lapse, with requested amounts totaling $9.14 billion, according to Ex-Im data. The amounts include 14 loan guarantees worth $3.33 billion, and 137 trade insurance requests worth $163 million.
Companies affected range from giants including aircraft maker Boeing Co. and General Electric Co. to small exporters of specialty oilfield equipment.
Congress took no action to keep the 81-year-old Ex-Im operating before leaving Washington last week for an 11-day break. Democrats, moderate Republicans and exporters are pinning their hopes of renewing the bank’s charter on attaching a measure to a "must-pass" transportation funding bill in July.
President Barack Obama said the lapse "means lost sales, lost customers, and lost opportunities" for
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exporters and vowed to fight for Ex-Im’s revival.
Boeing, by far the Ex-Im Bank’s largest beneficiary, faces an aircraft financing void of $8 billion to $9 billion this year if Ex-Im never reopens, and would have to fill about half of that through its own financing arm, Boeing Capital, according to Moody’s Investors Service.
"But we don’t see that as a viable long-term solution," said Boeing spokesman Thayer Scott in Washington D.C., because it would reduce capital available for new airplane development.
While Boeing faces no immediate threat to its credit rating, the outlook without Ex-Im could worsen over time if other negative factors came into play, said Moody’s senior vice president Russell Solomon.
Fitch Ratings managing director Craig Fraser gave a similar assessment for construction equipment maker Caterpillar Inc., another top user of Ex-Im services, adding that without the bank, its competitive position could be reduced over time.
For more of the Reuters story: www.reuters.com
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