U'S' ExIm Bank in India

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U.S. Ex-Im Bank in India

• Medical Fair India
• March 2009

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Introduction

• U.S. governments official export credit agency
• Mission is to support U.S. exports to promote
  U.S. jobs.
• Since establishment in 1934, have supported more
  than 400 billion in U.S. exports.
• In FY2008, supported financing for exports
  valued at over 14.4 billion.

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Ex-Im Bank in India

• Ex-Im Bank has provided financing to Indian
  borrowers in
• Aviation
• Telecom
• Oil and Gas
• Energy (including Renewable Energy)
• Heavy Equipment (sales and leases)
• Medical Equipment
• Services (IT)

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Ex-Im Bank in India (as of March 2009)

• Ex-Im Bank India portfolio 3.95 billion
• Breakdown of exposure by debtor type
• Sovereign 1.5 billion
• Public, Non-Sovereign 36 million
• Private 2 billion

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Example of Ex-Im Bank Supported Transactions in
India

• Reliance Infocomm of Mumbai, India obtained 500
  million in financing from Citibank to purchase
  CDMA telecom equipment from Lucent.
• Ex-Im Bank provided Citibank with a long-term
  loan guarantee for the transaction.

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Example of Ex-Im Bank Supported Transactions in
India

• Importers Software Services Inc of California
  shipped 2.4 million in trade management software
  to Helios and Matheson IT of Chennai, India.
• The software enabled Helios clients to monitor
  their export-import activities to better manage
  their sales and purchases.

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Example of Ex-Im Bank Supported Transactions in
India

• Ranbaxy Laboratories Ltd. of New Delhi, India,
  purchased plastic pharmaceutical bottles and
  closures from Glass Company, Inc. of Boyertown,
  PA on 30-day terms using an Ex-Im Bank short-term
  insurance policy.

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Example of Ex-Im Bank Supported Transactions in
India

• GENERAL ELECTRIC HEALTHCARE OF WAUKESHA,
  WISCONSIN
• received a single-sale, multiple shipment medium
  term insurance policy from Ex-Im Bank for U.S.
  Bank National Association financing for the
  export of a new GE MRI Scanner to MRI Scans
  Private Ltd of New Delhi, India. This 870,404
  transaction qualifies as a medical initiative
  under Ex-Im Bank's Medical Equipment Initiative
  Program. The equipment provides advanced
  diagnostic services to the surrounding community.
  

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Air India

• Ex-Im Bank has supported financing for Air
  Indias fleet renewal with the procurement of
  Boeing aircraft.

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Upgrade of Jamnagar Refinery

• Ex-Im Bank recently supported the U.S. content in
  the upgrade of Reliance Industries refinery at
  Jamnagar amounting to 500 million.

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Special Sector Initiatives

• Ex-Im programs offering special enhancements
• Medical Equipment Initiative (MEI)
• Environmental Exports Program (EEP)
• Transportation Security Exports Program (T-SEP)

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Medical Equipment Initiative (MEI)

• Automatic Local Cost Cover Local cost financing
  available on automatic basis for local costs
  related to exporters scope of work and
  documented up to 15 percent of U.S. contract
  value.
• Repayment Terms Terms up to seven years offered
  for medium-term transactions when consistent with
  expected life of product, subject to minimum
  contract value of 350,000.
• Capitalization of Interest Interest may be
  capitalized when there is extended installation
  and/or construction period.

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Export Support Types

• Geared to U.S. exporters / banks
• Working Capital Loan Guarantees
• Short- Medium-Term Insurance
• Geared to foreign buyers / banks
• Medium- Long-Term Loan Guarantees
• Structured Project Finance

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Short-Term Export Credit Insurance
U.S. Supplier
Payment
Insurance
Goods / Services
Foreign Buyer
EX-IM
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Export Credit Insurance

• U.S. exporters apply for policy protection
  against foreign credit risk.
• Coverage provided against commercial and
  political risk associated with default.
• Raw materials and consumables coverage up to
  180 days.
• Bulk agricultural products and light capital
  equipment coverage up to 360 days.
• Capital goods terms from 360 days to 7 years.

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Export Credit Insurance U.S. Content
Requirements

• For Short-Term products, U.S. content in the
  contract is evaluated on an item by item basis.
• Products must be manufactured in and shipped
  from the U.S.

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Short-Term Credit Process

• U.S. supplier submits application along with
  required information to establish credit limit
  for foreign buyer.
• Info requirements from foreign company for
  credit limits
• 10,000 credit favorable trade or bank reference
• 10,000-50,000 credit current credit report
• 50,000-100,000 credit current credit report
  plus favorable bank or trade reference
• Greater than 100,000 credit current credit
  report, latest 3 years financial statements, and
  references
• Ex-Ims Loan Officer analyzes application and
  makes decision on amount of credit to be
  supported.

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Medium- and Long-Term Loan Guarantees
Payment
U.S. Supplier
Bank (U.S. or Intl)
Goods Services
Financials
Loan Guarantee
Foreign Buyer
EX-IM
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Loan Guarantees

• Covers commercial lenders against repayment
  risks on foreign buyers debt obligation.
• Commits full faith and credit of U.S.
  government.
• Loan fully transferable can be securitized.

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Loan Guarantees

• Protects 100 of principal and interest on 85
  of commercial contract foreign buyer required
  to make 15 cash payment.
• Negotiated interest rate between Master
  Guarantee Agreement (MGA) bank and foreign buyer
  (fixed or floating) usually floating rate based
  on spread over 6-month U.S. dollar LIBOR rate.

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Medium- and Long-Term Loan Guarantees

• Medium-Term Loan Guarantees generally used for
  U.S. capital equipment, projects, and services
  up to 5-year and exceptionally 7-years repayment
  terms.
• Long-Term Loan Guarantees generally used for
  buyer financing of very large items and project
  finance over 7-year repayment terms (up to 10
  years and occasionally 12 years to 15 years) or
  over 10 million.

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Medium-Term credit standards

• Positive Operating Profit during last 2 years
• Positive Net Income during last 2 years
• Positive Cash-Flow-From-Operations (latest year)
• EBITDA/Debt Service gt 150
• Total Liabilities/Total Net Worth lt 175
• Ex-Im Exposure/Total Net Worth lt 40
• Borrowers meeting above standards likely to be
  approved. If borrower misses one or more of
  standards, Ex-Im will conduct further analysis of
  borrowers business to determine whether to grant
  approval.

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Military Restrictions

• No Defense Articles or Services
• Exceptions
• Humanitarian purposes
• Drug interdiction
• Dual-use items

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Standard Finance Model

• Net contract price 1,000,000
• Cash payment (150,000)
• Financed portion 850,000
• Exposure fee _at_ 5 42,500
• Total financed
  892,500

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Exposure fee

• Determined by
• Country risk
• Percent of cover
• Drawdown period
• Repayment period
• Fee financed
• Timing of fee payment
• General credit risk of the borrower

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Contact information

• Ex-Im web site www.exim.gov
• Business Development
• Talaat Rahman, Middle East Asia
• E-mail Talaat.Rahman_at_exim.gov
• Tel [phone]
• Fax [phone]