WASHINGTON, June 20, 2012 /PRNewswire-USNewswire/ -- The Export-Import Bank of the United States (Ex-Im Bank) today announced that Citi Commercial Bank has approved its first transaction under Ex-Im Bank's Medium-Term Delegated Authority Program (MTDA), an initiative to expedite export financing for U.S. small businesses.
Citi Commercial Bank has authorized an Ex-Im Bank-guaranteed loan of approximately $970,000 to Exinsa S.A. in Cancun, Mexico, to purchase a TT2550 chain trencher from Trench-Tech International Inc., a small-business manufacturer in Roanoke, Texas. The chain trencher (a type of equipment that can cut through very hard ground) will be used in the Mexican buyer's construction business. The buyer is a repeat customer of the U.S. exporter.
Approved lenders under Ex-Im Bank's MTDA Program can authorize Ex-Im Bank's guarantees to support medium-term commercial loans for foreign buyers of U.S. capital goods such as machinery and equipment. The program is designed to reduce transaction turnaround time and provide additional support for U.S. small-business exports.
"Ex-Im Bank's Medium-Term Delegated Authority Program is a vehicle to increase exporting by U.S. small and medium-sized businesses, one of the main goals of President Obama's National Export Initiative. Ex-Im Bank is partnering with commercial lenders to ensure that foreign buyers have ready access to financing for their purchases of U.S. goods and services. The exports supported through this program are helping small businesses maintain American jobs," said Ex-Im Bank Chairman Fred P. Hochberg.
"One of Citi Commercial Bank's greatest strengths is our capacity to leverage Citi's unequaled global footprint to meet the ever-growing demand for international services from our U.S. clients. We are thrilled to partner with Ex-Im Bank and capitalize on our strengths to help finance a transaction that will generate investment for a thriving U.S. business and create new jobs here and abroad," said Citi Commercial Bank Product Sales Director Rajiv P. Goswami.
"The new MTDA Ex-Im program offered through Citi Commercial Bank enabled us to complete a sales transaction with Exinsa S.A. de C.V., located in Cancun, Mexico. Without this new program, we most likely would not have been able to complete this transaction," said Jerry F. Gilbert, president of Trench-Tech International Inc.
Under the program, approved lenders have delegated authority to underwrite and authorize Ex-Im Bank-guaranteed medium-term transactions without prior Ex-Im Bank review and approval. In each transaction, the lender is required to share the credit risk by retaining 10 percent of the commercial risk but also retains 10 percent of the Ex-Im Bank exposure fee. Transactions involving small-business exporters or small-business suppliers are eligible for increased Ex-Im Bank risk coverage, and for these transactions, the lender's commercial-risk retention is reduced to 8 percent.
Approved lenders have the thorough knowledge of Ex-Im Bank policies and credit standards to expedite approvals and help U.S. exporters offer timely financing to their foreign customers. Loans approved under the program may have repayment terms of two to five years.
Transactions requiring a higher degree of specialized judgment, such as those involving complex financing, environmental or economic-impact analysis, may be excluded. Excluded transactions may be submitted for consideration under Ex-Im Bank's standard medium-term guarantee program.
Commercial lenders currently participating in Ex-Im Bank's MTDA Program also include Wells Fargo and NorthStar Trade Finance (owned by several Canadian financial institutions).
Interested lenders may contact Tom Fitzpatrick, Trade Finance and Insurance senior relationship manager, at (202) 565-3642. Detailed information on the Bank's MTDA program is available on Ex-Im Bank's Web site at http://www.exim.gov/products/medium_term_delegated_authority.cfm.
About Ex-Im Bank:
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. In the past five years, Ex-Im Bank has earned for U.S. taxpayers $1.9 billion above the cost of operations. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.
Ex-Im Bank approved $32.7 billion in total authorizations in FY 2011 – an all-time Ex-Im record. This total includes more than $6 billion directly supporting small-business export sales – also an Ex-Im record. Ex-Im Bank's total authorizations are supporting an estimated $41 billion in U.S. export sales and approximately 290,000 American jobs in communities across the country. For more information, visit www.exim.gov.
SOURCE Export-Import Bank of the United States