Jun 02, 2015

They Finally Said It: Exporters Will Be Just Fine Without The Ex-Im Bank

Post by Freedom Partners

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Ex-Im Chairman Fred Hochberg: “None Of Us Actually Expire On June 30th. The Bank’s Authority To Make A New Loan Expires On June 30th.” (“The Debrief With Export-Import Bank’s Fred Hochberg,” Politico, 06/01/15)

“THE EXPORT-IMPORT BANK’S BIGGEST BENEFICIARIES WILL BE FINE If CONGRESS LETS THE INSTITUTION DIE THIS MONTH”

Bloomberg: The Export-Import Bank’s Biggest Beneficiaries, Including General Electric And Boeing, Will Be Fine If The Bank’s Funding Expires. “The U.S. Export-Import Bank’s biggest beneficiaries, including General Electric Co. and Boeing Co., will be fine if Congress lets the institution die this month, analysts said.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

Boeing’s Own Managing Director Stated The Company Will Be Able To Find Other Financing. “ “Kostya Zolotusky, a managing director at Boeing’s finance arm . . . said he was confident the company could find alternative funding sources for customers that wouldn’t require it to boost its support of aircraft sales, but said Boeing remains ‘mindful’ of the debate over Ex-Im’s future.” (Doug Cameron, “Boeing Cites Jitters Over Airplane Financing From Ex-Im Bank,” Wall Street Journal, 08/07/13)

Tim Neale, Boeing’s Spokesman, Stated The Company Would Be Able To Provide Funding. “We can provide some financing in the near term.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

In Boeing’s Own Annual Report It States They May Fund Additional Commitments Or Enter Into New Financing Arrangements With Customers If The Ex-Im Bank Expires. “In September 2014, the bank’s charter was extended and is now set to expire on June 30, 2015. If the bank’s charter is not renewed or if the bank’s existing or future funding authority is insufficient to meet our customers’ needs, we may fund additional commitments and/or enter into new financing arrangements with customers.” (“2014 Annual Report,” The Boeing Company, 04/22/15)

One Of Boeing’s Largest Customers Stated They Will Keep Buying Boeing Aircrafts If The Export-Import Bank Expires. “Emirates, Dubai’s flagship airline, would not have trouble buying planes from Boeing even if the U.S. Congress fails to renew the U.S. Export-Import Bank’s charter later this month, a senior company executive said on Friday. . . . Emirates is one of the biggest buyers of Boeing airplanes and in November placed a record order for Boeing’s next-generation 777X.” (Jeffrey Dastin, “Emirates Airline Says Ex-Im Bank Not Critical For Its Plane Financing,” Reuters, 09/05/14)

FINANCIAL ANALYSTS & ECONOMISTS AGREE

Vice President Of Teal Group, Richard Aboulafia: “In the here and now impact, would this be the end of civilization as we know it, would it be raining cats and dogs? No, that’s nonsense.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

Susquehanna Financial Group Analyst, Ted Grace: “I would venture a guess that it wouldn’t have any impact on Caterpillar and if it were to have impact it would be completely immaterial.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

Analysts At Standard & Poor’s: “We don’t believe that the expiration of Ex-Im’s authorization in September would hurt Boeing’s credit quality or ability to make planned deliveries.” (Editorial Board, “Boeing Will Survive An Ex-Im Defeat,” Wall Street Journal, 07/14/14)

Managing Director With Jeffries LLC, Howard Rubel: “Could there eventually be a way around this? Sure.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

DESPITE THREATENING RHETORIC

General Electric: Without Ex-Im, We Would Send Your Jobs Overseas. “‘To opt out of AIIB and not reauthorise [the Ex-Im Bank] would send a strong signal to the rest of the world that we are not going to participate entirely,’ Mr Rice [who oversees GE’s international operations as the industrial giant’s vice-chairman] told the FT. . . . Mr Rice said the issue was crucial for GE and that if the Ex-Im Bank were to be shut down it was likely to have to shift production of gas turbines and jet engines overseas where it could take advantage of other countries’ export credit agencies.” (Shawn Donnan, “GE Executive Seeks Renewal of Funding for Export-Import Bank,” Financial Times, 04/19/15)

Boeing: Without Ex-Im, America Would Become The Wild West. “Most of my engineering and manufacturing jobs are in the United States and I’d like to keep it that way. But without Ex-Im financing, you’d have to start asking the question’ about where they should be, [Boeing chief executive Jim] McNerney said at a conference sponsored by the U.S. export credit agency. . . . ‘If Ex-Im goes away, you’d have the Wild West.’ . . . Some of an estimated 1.5 million jobs in the company’s U.S. supply chain could also be in jeopardy if U.S. credit support ceased, McNerney noted.” (David Morgan, “Boeing CEO Warns of Job Relocations if U.S. Ex-Im Bank Disappears,” Reuters, 04/23/15)

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