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Ex-Im Bank's expanding role
10 September 2009
Ex-Im Bank is developing innovative financing structures to cover the funding gap in 2009. Geoffrey P Burgess, partner, and Sulagna Roy, associate, at Debevoise & Plimpton LLP, discuss Ex-Im Bank's role in financing pre-owned aircraft, engines and spare parts.
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Ex-Im Bank
Debevoise
Historically, the Export-Import Bank of the United States (Ex-Im Bank) has supported the export of new commercial aircraft manufactured in the US to airlines outside of US borders but not in the UK, France, Germany and Spain. Ex-Im Bank and the European export-credit agencies (ECAs) honour a home country rule under which they do not finance competing aircraft that are being delivered to airlines in countries in which each of the other ECAs cannot (or does not) finance aircraft.
Both Ex-Im Bank and all other participants, including the European ECAs, Canada and Brazil, are subject to the Aircraft Sector Understanding (ASU), which as reflected in the stated purpose of the ASU implies but does not directly express the home country rule.“[The ASU] seeks to establish a balanced equilibrium that, on all markets:(1) equalizes competitive financial conditions between the Participants,(2) neutralizes official support among the Participants as a factor in the...
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