The US Senate has voted against reauthorization of Export-Import Bank, casting more uncertainty about the future of the federal credit agency that will soon reach its $100 billion cap.
A large proportion of Ex-Im Bank’s portfolio is loans and guarantees to ensure financing for sales of new US aircraft to foreign airlines. The agency is sometimes colloquially referred to as “Boeing’s bank.”
Speaking as a panelist at the ISTAT Americas 2012 conference in Scottsdale, Ariz., Tuesday, Ex-Im Bank VP, transportation Robert Morin said there were $89 billion of loans and guarantees outstanding at the end of the agency’s fiscal year in September 2011. Last year, Ex-Im enabled $40 billion of aircraft deals.
News that the Senate voted against reauthorization of the Ex-Im agency broke even as Morin was speaking the panel. Morin, who was told the news by an audience member, declined to comment.
But in his panel remarks, he said that the $89 billion outstanding loans and guarantees—of which most are guarantees—meant the agency would soon reach its cap. “So we have $11 billion of head room left and we will be bumping up against the limit in the coming month,” he said.
Morin said that over the past 10 years, Ex-Im had financed some 1,000 aircraft at $60 billion; over the past 20 years, it had financed 1,500 aircraft at $90 billion. In all that time, it had sustained only a single loss—one aircraft and $4 million. “Aviation is by far the biggest part of the bank’s portfolio, but it’s also the best performing. It’s a good business to be in,” Morin said.
The Senate voted 55-44 against reauthorizing Ex-Im, which is unpopular with Republicans who want to rein in spending and reduce debt.
A recent high-profile Ex-Im-backed deal was Norwegian Air Shuttle’s order for 100 Boeing 737 MAX aircraft and 22 737-800s. The low cost carrier also ordered 100 Airbus A320neos with backing from European Export Credit Agencies (ATW Daily News, Jan. 26).