05 February 2003
Ex-Im Bank Offers Incentives to Buyers of U.S. Aircraft
(Move intended to persuade countries to sign an international treaty) (630) The Export-Import Bank of the United States (Ex-Im Bank) has offered financial incentive to buyers of U.S. aircraft in countries that sign, ratify and implement an international treaty aimed at facilitating financing and leasing of aircraft equipment. In a January 31 news release, Ex-Im Bank said it approved a plan to reduce by one third one of its fees on financing of U.S. large commercial aircraft for buyers in countries that implement the Cape Town Convention, which was negotiated in 2001. Adoption of the convention can help countries to lessen their aircraft-related debt and decrease financing costs and give airlines better access to financing and opportunities to offer lower ticket prices to passengers, Ex-Im Bank Chairman Philip Merrill said. Ex-Im Bank said its decision is part of a plan to make the U.S. aerospace industry more competitive. Following is the text of the news release: (begin text) Export-Import Bank of the United States January 31, 2003 EX-IM BANK OFFERS ONE-THIRD REDUCTION OF ITS EXPOSURE FEE ON EXPORT FINANCING FOR U.S. LARGE COMMERCIAL AIRCRAFT Buyers of U.S Large Commercial Aircraft in Countries Adopting, Ratifying and Implementing the Cape Town Convention To Receive One-Third Reduction of Ex-Im Bank's Exposure Fee The Export-Import Bank of the United States (Ex-Im Bank) has approved a plan to reduce its exposure fee by one-third on financing of U.S. large commercial aircraft for buyers in foreign countries that sign, ratify and implement the Cape Town Convention, an international treaty that will facilitate asset-based financing and leasing of large commercial aircraft. When implemented, Ex-Im Bank's plan will enable eligible foreign buyers to receive an Ex-Im Bank exposure fee of as low as 2 percent, a one-third reduction of the current minimum 3 percent exposure fee on financings of large commercial aircraft. "With this plan, Ex-Im Bank is working to encourage other countries to adopt the kind of legal framework that will enable their airlines to upgrade and expand their fleets by reducing the risk in cross-border asset-based aircraft financing," said Ex-Im Bank Chairman Philip Merrill. "Adoption of the Cape Town Convention can lead to less aircraft-related debt for governments, lower financing costs and enhanced access to funding for airlines, and ticket price savings for passengers." Ex-Im Bank's reduced exposure fee plan is consistent with one of the recommendations made in the recently released report of the President's Commission on the Future of the United States Aerospace Industry that recommends that U.S. and multilateral regulations and policies be reformed to facilitate the movement of products and capital across international borders on a fully competitive basis. The Cape Town Convention, which was developed by an international diplomatic conference in November 2001, establishes a commercially oriented, comprehensive international legal framework to protect security and leasing interests in aircraft equipment. The treaty has been signed by 24 countries and will be in effect when eight countries ratify it. Ex-Im Bank will offer the one-third reduction of its exposure fee (in connection with approvals issued through September 30, 2004) to buyers in any foreign country that has signed, ratified and implemented the treaty (including certain optional provisions of the treaty). Ex-Im Bank is the official U.S. export credit agency that helps finance the sales of U.S. exports, primarily to developing markets, by providing loans, guarantees and export credit insurance. In the past five years, Ex-Im Bank has supported the export of $18.5 billion [$18,500 million] of U.S. large commercial aircraft. (end text) (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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