By Emmanuel Oluebube
Export-Import Bank of the United States (EXIM) President and Chairman of the Board of Directors Kimberly A. Reed Monday announced the agency’s first-ever public review of the Private Export Funding Corporation (PEFCO). EXIM has had a 50-year public-private partnership with PEFCO and the EXIM Board of Directors soon will consider the partnership’s renewal.
As part of this review, EXIM invites public comment on two separate requests the agency has received from PEFCO. The first request relates to renewing PEFCO’s partnership with EXIM, which is set to expire on December 31, 2020. The second request relates to increasing the amount of the long-term general guarantee on the interest of Secured Notes issued by PEFCO. The two requests have been published in the Federal Register and comments must be received on or before August 21, 2020, to be assured consideration by the EXIM Board of Directors.
Additionally, the EXIM Board of Directors intends to hold a Board of Directors meeting that is open to the public in August to hear from stakeholders. More details on the public meeting will be provided in the future.
“Because of the EXIM-PEFCO public-private partnership over the past 50 years, PEFCO has been enabled to grow opportunities for America’s businesses and workers by providing more than US$38 billion of funding for US export transactions,” said EXIM President and Chairman Kimberly A. Reed. “With EXIM’s full reopening and historic long-term reauthorization in 2019, we are now able to fully focus on delivering on our mission and keeping America strong. As part of EXIM’s transformation over the past year, we also are committed to increasing transparency and protecting the US taxpayer. As such, we are launching this first-ever public review of our partnership with PEFCO and look forward to a robust dialogue on how PEFCO can best serve US exporters and support American jobs in today’s competitive global marketplace.”
PEFCO provides a broad range of export finance programs as a direct lender and as a secondary market buyer of export loans originated by other lenders. To be eligible for financing by PEFCO, loans must be protected against nonpayment under an appropriate guarantee issued by EXIM. PEFCO entered into an official 25-year partnership with EXIM in 1971, which was renewed in 1994 through December 31, 2020. The partnership was created to ensure there always was a private alternative to EXIM direct loans and facilitate liquidity of EXIM-guaranteed and -insured transactions. PEFCO accomplishes these purposes by intermediating between the efficiency and immense scale of the US capital markets and the day-to-day funding needs of export financing for cases ranging from several hundred thousand dollars to several million dollars.
