Index for July 2015

Volume 14, Issue 7

  • (New York Times, Washington, 25 & 29 July 2015) In a rare and fiery weekend session, the Senate voted on Sunday to resurrect the federal Export-Import Bank, handing the Republican Party’s most conservative wing a major defeat and setting up a showdown this week with House leaders divided over the moribund export credit agency. Congress recessed on Wednesday however without reauthorizing the 81-year-old agency, leaving its future more uncertain than ever before. Though conservatives were all but claiming a scalp in their crusade to shrink government, the Ex-Im Bank is not closed entirely. It must still manage a $107 billion portfolio of loans and loan guarantees, It cannot, however, enter new contracts and without reauthorization it will wind down over time. An alliance of exporters will continue to lobby to revive the agency, then, in part by alerting local and national media to examples of export deals and jobs that are threatened if foreign buyers turn to companies in China, Russia and other countries that provide credit assistance.

  • (Reuters, Brussels, 27 July 2015) EU bosses are pushing to resolve a clash between industry and environmental policy with a new strategy to phase out funding to export coal technology to developing nations, ahead of a meeting of leading economic powers on the issue. The European Commission, the EU executive, urges tougher rules on when subsidies, known as coal export credits, can be used in a paper seen by Reuters, ahead of interim talks this week. Political pressure is growing to reach agreement on restricting the coal subsidies before United Nations climate change talks in Paris at the end of the year. But opposition is also strong. Negotiations at the Paris-based OECD in June ended in statemate as Japan, the biggest user of export credits that help companies such as Toshiba Corp to sell coal plant and mining technology abroad, led resistance.

  • (Bellona Foundation, Oslo, 20 July 2015) Earlier this year the French government announced plans to withdraw credits for the construction of coal power plants in developing countries (‘export credits’). The French President noted that guarantees would only be granted to plants equipped with Carbon Capture and Storage (CCS) technology. Bellona is, however, disappointed to find that France may be abandoning these promises due to feared economic losses for the energy sector.

  • (TXF News, London, 17 July 2015) The UK export credit agency and HSBC have teamed to arrange the first ever offshore renminbi (RMB) financing for an aircraft purchase – in this case the sale of a new Airbus A330-300 passenger aircraft to China Southern Airlines. The transaction represents a huge step forward in terms of export credit agencies (ECAs) expanding their range of new currencies to match the requirements of clients. [GTR: David Godfrey, UKEF chief executive, says: “[The] Rmb is already the second most used currency in trade finance after the US dollar and we fully expect to support many more such deals in the future.”]

  • (Reuters, Milan, 14 July 2015) A gradual lifting of sanctions against Iran could lift Italian exports to the Asian country by around 3 billion euros ($3.3 billion) in the next four years, Italy's export credit agency SACE said on Tuesday. Meanwhile, Britain's export credit agency UKEF also announced on Tursday the initiation of a review of Iran to assess creditworthiness after a nuclear deal was reached between world powers and Tehran. South Korea's export credit agency also pledged to provide financial support to Korean firms trying to secure business in Iran, as industrial countries jockey to enter the market after the nuclear deal.

  • Argus, Kyoto, 13 July 2015) Japan's state-backed export insurance agency Nexi has suspended underwriting new insurance for trade and investment in Venezuela as the Latin American producer faces foreign currency shortages amid weaker oil prices. Nexi will halt issuing almost all new insurance policies for trade deals and investment in Venezuela tomorrow and some comprehensive export credit and buyers' credit insurance by 21 July. The move follows some Japanese trading houses failing to recover around ¥20bn ($160mn) in payments from Venezuelan firms for their automobile exports.

  • (Bloomberg, Washington, 7 July 2015) The U.S. Export-Import Bank’s $1 billion program to boost India’s clean-energy industry has been suspended after the institution’s lending authority lapsed, an Indian government official working on the project said. Indian Renewable Energy Development Agency Ltd., or Ireda, signed a memorandum of understanding with the U.S. export credit bank in November covering the program. The funding wasn’t finalized when the Ex-Im Bank’s charter expired on June 30.

  • (Moodys, New York, 22 July 2015) Without the renewal of the US Export-Import Bank charter, which Congress allowed to expire at the end of June 2015, aerospace giant The Boeing Company will take the biggest blow, says Moody's Investors Service in a new report. Moody's does expect that the US Congress will ultimately reauthorize the charter, but this is far from assured and the timing is unclear.

  • (Armenpress, Yerevan, 1 July 2015) The Foreign Affairs Committee of the National Assembly of Armenia has examined a Russian export credit agreement signed on June 26, 2015. The agreement was introduced into the National Assembly of Armenia by Ara Nazaryan, the deputy minister of defense, who said Russia will extend to Armenia a state export credit of USD 200 million to finance the purchase of Russian military hardware. The agreement was ratified by the Armenian parliament on July 2nd.