Chairman's Quarterly Newsletter - Volume 9 - July 2012

Chairman's Update, Export-Import Bank of the U. S. and photo of Fred P Hochberg
Volume 9
July 2012

IN THIS ISSUE

Message from the Chairman
Chairman Pic 2
Friends,
May 2012 was a great month. On May 15th, Congress passed the Export-Import Bank Reauthorization Act of 2012, ensuring American companies can better compete in the global marketplace. This bipartisan bill will allow the Bank to continue financing U.S. exports to meet foreign competition and fills the void when acceptable commercial financing is unavailable. It was a victory for American companies, workers and taxpayers.
On May 30th, surrounded by more than 150 small and medium-sized business owners and other invited guests from across the country, President Obama signed the bill into law. The signing came just in time, as Ex-Im Bank’s exposure cap reached $99.3 billion, just short of the limit of $100 billion.The President is a strong champion of Ex-Im Bank, and thanks to his leadership more U.S. companies are exporting to more countries. With our reauthorization now achieved, the Bank will continue to do what it does best – help our nation’s workers compete globally and support U.S. jobs at no cost to American taxpayers.
The passage of the charter provides much-needed certainty and predictability to U.S. exporters and their workers by extending the Bank's authority through 2014 and gradually increasing its portfolio cap to $140 billion. Reauthorization meets the President's objective, as the Bank is a key component of his National Export Initiative.
According to the Commerce Department, the U.S exported $183.1 billion in goods and services in May 2012. These results demonstrate that U.S. exports remain strong even though there has been economic uncertainty throughout Europe. Every month this year exports of goods and services has exceeded $180 billion. And this quarter’s financials indicate that Ex-Im continues to meet the growing demand for export financing this fiscal year.
Ex-Im Bank will continue to play a critical role in our economic recovery. The Bank’s reauthorization sends a strong message to foreign customers and competitors: that the United States stands shoulder to shoulder with our businesses as they sell high-quality goods and services around the globe.
WH Signing
President Obama signs the Export-Import Bank Reauthorization Act of 2012. (Photo courtesy of the White House)

Third Quarter Highlights
Q3 Graph
During the first three quarters of FY 2012, Ex-Im authorized export financing totaling $23.8 billion, nine percent higher than the same time period in FY 2011. Small business authorizations grew from $3.4 billion in FY 2011 to $3.6 billion in FY 2012, a seven percent increase. Other noteworthy growth in financing occurred in the oil and gas and transportation industries.
Among all Ex-Im markets, Australia topped the list of the fastest growing countries. During the first three quarters of FY 2012, $3 billion was authorized there compared to $10 million in all of FY 2011. In the final quarter of FY 2012 there are several large transactions under consideration that will, if approved, significantly increase export financing for Australian buyers, perhaps by as much as 15 times over FY 2011 levels.
New Record Set in sub-Saharan Africa
In just eight months, Ex-Im Bank set a new, all-time record, authorizing export financing totaling $1.5 billion to sub-Saharan Africa. This financing in nine months surpassed the previous record of $1.4 billion for all of FY 2011. There have been 105 sub-Saharan Africa transactions completed to date. Notable transactions among these include aircraft to Ethiopian Airways, construction equipment to the Government of Cameroon, mining equipment to Eqstra, aircraft to Comair in South Africa, water filtration equipment to Watcon in Nigeria, and dredging equipment to Japaul in Nigeria. Among the sub-Saharan African countries, Ex-Im Bank has seen growing interest in the power, aviation, and mining industry sectors. Chairman Hochberg will be traveling with Secretary Clinton to South Africa in August to further cultivate business development with the country.
Boeing Ethiopian Air
(Photo courtesy of the Boeing Company)

Ex-Im Recognized as Best ECA in the Americas
In June, Ex-Im Bank received the Best Export Credit Agency (ECA) in the Americas Award from Trade Finance Magazine for the third year in a row. The Bank also placed second in the Best Global ECA category and second in the Best ECA in Africa category. Trade Finance Awards for Excellence have been annually awarded for the last 15 years and represent a comprehensive poll of the global trade finance market.

American Businesses Can Successfully Compete Against Foreign Companies, Not Countries
In June, Chairman Hochberg spoke at the Center for American Progress on U.S. competitiveness overseas. He said that today American companies' ability to win foreign sales is being challenged by a dramatic rise in official export credit financing. Hochberg also outlined how the United States can become the world's leading exporter again and how American businesses can compete globally amidst the rise of state-driven capital. Chairman’s Hochberg’s speech, A Wake-Up Call on American Competitiveness is available online at http://go.usa.gov/w2E. View Chairman Hochberg at Center for American Progress on C-SPAN at http://go.usa.gov/w2V.
Following his speech, Hochberg released the Ex-Im Bank   2011 Competitiveness Report. The Bank has produced these reports for Congress annually since 1972, and this year's report examines the challenging trends in export finance driven by both OECD and non-OECD economies.
This month, Chairman Hochberg’s Op-Ed, “State Capitalists Map Out a New Wild West,” was featured in the Financial Times discussing the challenges U.S. companies face today against foreign competitive financing. More available here 

CAP
Chairman Hochberg at the Center for American Progress. (Ex-Im Bank photo)

On the Road to Helping Small Business
Ex-Im Bank Celebrates Small Business Week
In May, Chairman Hochberg acknowledged Small Business Weekby noting the invaluable role export sales play in economic growth and job creation. “We cannot grow our economy without growing our export sales,” he remarked. “And we cannot grow export sales without small businesses. Small businesses are the backbone of our economy – they are responsible for the majority of our country’s job creation.”
He continued: “Ex-Im Bank is contributing to growing export sales...Ex-Im is on track to meet the growing demand for export financing this year as well, with $3.56 billion in small business transactions accounting for 15% of the Bank’s overall authorizations. Over $517 million of this financing supports minority- and woman- owned businesses, a 12% increase in export financing from the same time frame in FY'2011 ($4.6 million in FY'2011). So far, 477 small business customers have used Ex-Im Bank products for the first time this year, putting new small business customers at 1,775 since the launch of Ex-Im Bank’s Global Access program."
Global Access for Small Business Reaches Small Businesses in New York & Ohio
In June, Ex-Im Bank hosted a Global Access forum with Rep. Steve Israel for local small businesses at the Long Island (New York) Association. More than 75 representatives from local companies attended the event, which focused on how American companies can gain a competitive edge when exporting their products overseas. Long Island small businesses also received one-on-one trade counseling from Export-Import Bank experts.
"Long Island small businesses should be aware of the enormous consumer base that exists beyond our national borders and take advantage of it when selling their products," said Rep. Israel.
Later in June, Chairman Hochberg, Senator Sherrod Brown, Representative Tim Ryan, Mayor William D. Franklin of Warren, Ohio, and Mayor Charles P. Sammarone of Youngstown, Ohio, all participated in the TechBelt Export Summit, which was hosted by the Youngstown/Warren Regional Chamber. The political leaders met to support local Ohio businesses as well as President Obama’s National Export Initiative, which aims to double U.S. exports by 2014.
In FY 2012, Ex-Im has already authorized more than $70 million in financing for Ohio businesses, with more than 63% of that going specifically to small businesses. In FY 2011, the Bank authorized more than $320 million for Ohio companies.

Third Quarter Media Highlights
Reauthorization - Chairman Hochberg discussed Ex-Im Bank’s reauthorization bill with several outlets including The New York Times, Reuters, and CNBC’s Squawk Box.
CNBC Pic
Chairman Hochberg on CNBC’s Squawk Box regarding the Bank’s reauthorization. (Photo courtesy of CNBC)
U.S. Economy - Chairman Hochberg appeared on a number of programs to discuss the outlook for U.S. exports and the economy including Worldwide Exchange, Reuters, and Bloomberg Businessweek.

Ex-Im Bank Business Development Teams Seek New Opportunities for U.S. Exporters
Mongolia
Chairman Hochberg led a business development team to Mongolia to encourage the sourcing of U.S. products and services for regional infrastructure projects and signed a memorandum of understanding with the chairman of the Development Bank of Mongolia on May 1.
“Mongolia has one of the fastest growing economies in the world, and there are enormous opportunities for U.S. businesses to help meet the country’s growing infrastructure needs,” he said. “Signing this document represents a pledge of cooperation, and we look forward to working together on upcoming projects that benefit both of our countries.”
The trip was the first recorded visit of an Ex-Im Bank chairman to the country since the Bank was formed in 1934.
China
In May, Chairman Hochberg joined Secretaries Tim Geithner and Hillary Clinton for meetings in China for the Strategic and Economic Dialogue. The delegation, which sought to promote trade and open investment with their Chinese counterparts, participated in an assortment of conferences and roundtables. Chairman Hochberg also met with key business leaders and writers.
The chairman granted a live interview in Beijing to Bloomberg TV on the importance of the Strategic Economic Dialogue to U.S. exports and jobs.
Russia
Sberbank Signing
Signing of $1 billion MOU with Chairman Hochberg and Herman Gref, CEO and Chairman of Sberbank (Ex-Im Bank photo)
In June, the chairman signed a $1 billion memorandum of understanding with Herman Gref, CEO and Chairman of Sberbank, to facilitate increasing U.S. exports of goods and services to Russia and other countries in which Sberbank operates and Ex-Im Bank programs are available.
According to the terms of the agreement, Ex-Im and Sberbank intend to support up to $1 billion in U.S. exports to buyers in Russia and other target countries through 2014. And Ex-Im will consider increasing the amount of financing support should demand exceed $1 billion.
The signing took place during the St. Petersburg, Russia International Economic Forum, where Chairman Hochberg was also a participant. Media covering the signing included Reuters and Dow Jones News Service.
Aspen Ideas Festival
At the end of the quarter, Chairman Hochberg participated in the Aspen Ideas Festival in Colorado. In the June 28 session, he sat on a panel titled, “Can We Compete,” with Marco Annunziata and Christopher M. Hyzy. During the discussion, which was moderated by Jeremy Schaap, the chairman underscored the importance of Ex-Im Bank to U.S. exports, and thus by extension, to U.S. competitiveness. While in Aspen, Reuters TV interviewed Chairman Hochberg on U.S. competitiveness. The interview is available in two parts here and here.
Upcoming Travel
Next month, Chairman Hochberg is traveling to Brazil in addition to South Africa and Australia.

Transaction Highlights
Aerovias de Mexico
The board of directors of the Ex-Im Bank approved two final commitments aggregating $171 million in export financing for Aerovias de Mexico S.A. de C.V.  (Aeroméxico). Aeroméxico is Mexico's largest airline and a founding member of the SkyTeam Alliance. This transaction effectively triples Ex-Im support for Mexican aviation companies purchasing goods and services from U.S. companies. The final commitments supported the export to Aeroméxico of Boeing 737 passenger aircraft, as well as various goods and services to be provided by a variety of U.S. exporters. The latter includes the maintenance, repair and overhaul operations division of engines and auxiliary power units by Delta TechOps in Atlanta, Ga. and Honeywell in Phoenix, Arizona. Delta TechOps is the maintenance repair and overhaul operations unit of Delta Airlines (Delta), also a member of the SkyTeam Alliance.
Pennsylvania Company Expands Sales from One to 60 Countries with Ex-Im Bank Insurance
SB Global Foods is the manufacturer, distributor and exporter of its own line of gourmet pretzel snacks – Pretzel Pete®. It uses co-packers to make its branded products. The company also serves as the exporter for a variety of major U.S. confection, snack and grocery manufacturers (e.g., Pepperidge Farms). Karl Brown, the founder of SB Global Foods in 1991, had exported only one pallet of ginger snap cookies to Germany until 1996 when he met an Ex-Im Bank export finance manager at a diner in Pennsylvania. His international sales have been booming ever since. The company is now exporting to more than 60 countries as the Bank’s  multi-buyer export credit insurance has supported $45 million in sales over the last 15 years. In fact, 65 percent of the company’s total sales derive from exports.
SBGlobal
(Photo courtesy of SB Global Foods)
Biogas Project in Brazil
late May, FirmGreen Inc., a small renewable-energy company based in Newport Beach, Calif., and other U.S. green-technology suppliers  benefited from a $48.6 million foreign buyer loan from Ex-Im Bank supporting exports of equipment and services for the development of the Novo Gramacho biogas project in Brazil. The U.S. exporter, FirmGreen®, estimated that the Novo Gramacho project directly generated 165 new jobs at its facilities and at other companies in seven states: Indiana, Wisconsin, Ohio, California, Michigan, Missouri and Texas. It also supported jobs for FirmGreen and other U.S.-based employees in Brazil providing construction management services.
According to Steve Wilburn, CEO of FirmGreen, this is the company’s first export since the company was established in 2002. Wilburn also indicated this is the company’s largest sale to date and will make up 50% of overall sales this year.
FirmGreen
(Photo courtesy of FirmGreen, Inc.)
Australia Pacific LNG Project
Ex-Im Bank authorized a $2.95 billion direct loan to support U.S. exports to the  Australia Pacific liquefied natural gas (LNG) project. The transaction is Ex-Im’s second-largest single-project financing in history and is also the Bank’s first LNG project in Australia. Ex-Im’s financing is expected to support an estimated 11,000 American jobs. Principal U.S. exporters are ConocoPhillips Co. and Bechtel International, both of Houston, Texas. Additional exporters and suppliers include numerous small businesses in Texas, Colorado, Nevada, California, Oregon and Oklahoma.

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