Speech

Linda Conlin

Board Member
Export-Import Bank of the United States

Breakbulk Conference

Woodland, Texas
October 31, 2005

Introduction

Thank you, Ms. Plume (conference program Chair).

I’d also like to thank the Journal of Commerce for giving me an opportunity to address this important audience.

You’ve heard speakers today stress how vital trade is to the U.S. economy. U.S. trade in 2004 totaled $2.92 trillion – a record amount. And U.S. exports support an estimated 12 million U.S. jobs.

But continued trade growth – and U.S. competitiveness -- is predicated on export finance being available. American companies need to know that they can tap into this financing to make their export sales happen. And Ex-Im Bank wants to be a partner with you to provide financing support to help you grow.

I’m particularly glad to see so many familiar faces in the audience, including Captain Shubert. I appreciate the leadership Captain Shubert provided in his former role as Maritime Administrator. He certainly is regarded as one of the best to have served in that position. Captain Shubert and Tom Harrelson were very much involved in developing the Transportation Freight Financing Program. My congratulations also to Fred Bedford for the great honor he has received today.

This is the second time I’ve spoken before this conference. Many of you were at the conference in New Orleans where I spoke in October of 2004. Since then, a lot has happened to this nation and its economy -- and to this industry in particular, with hurricanes ravaging New Orleans and other coastal cities.

I’d like to salute you for your tenacity and resiliency in the face of these disasters. To be sure, there has been much suffering and devastation to the region’s economy. I strongly believe that your rallying efforts, and the broad-based actions of the U.S. government, will continue to be critical to recovery.

As an Ex-Im Bank Board member, I’m pleased to say that Ex-Im Bank is playing a role in supporting lenders and U.S. exporting companies that have been affected by Katrina and Rita. And I’ll say more about this in a minute. But first, I’d like to put what Ex-Im Bank has done in the context of the comprehensive government support that has been provided in the wake of Hurricane Katrina. Then I’ll tell you a little about Ex-Im Bank and the role we play in supporting U.S. exports, especially our financing of large infrastructure projects that offer great potential for your industry.Finally, I’ll update you on the Transportation Freight Financing Program.

GOVERNMENT ACTION POST KATRINA

While some aspects of recovery efforts have been well publicized, there also has been a much more comprehensive, and perhaps lesser-known government effort to help with recovery in the Gulf. Let me give you a few examples which I believe should be of interest to this audience.

• We’re grateful that over 72,000 military personnel (22,000 active-duty troops and more than 50,000 National Guardsmen) have provided critical security, logistical and other support.
• Thousands of Coast Guard men and women from around the nation conducted search, rescue, and waterway reconstitution operations.
• The Department of Transportation is working closely with federal, state and local partners, and private transportation service providers to assess damage to transportation infrastructure and assist in recovery efforts.
• The Department of Commerce has deployed three National Oceanic Atmospheric Administration (NOAA) response teams to survey priority channel and port locations.
• Commerce’s National Institute of Standards and Technology (NIST), is working with FEMA to assess the impact of the hurricane on small manufacturers in Louisiana, Mississippi, and Alabama.
• A 10-agency task force of environmental response experts continues to remedy hundreds of cases of hazardous materials and oil pollution in Florida, Alabama and Mississippi.
• The Department of Education, among other measures, is helping match schools accepting displaced students with donated resources.
• The Department of Treasury announced extended tax deadlines and other special relief for taxpayers in the Presidential Disaster Areas struck by the hurricane.

That’s quite a record of action.

As for Ex-Im Bank, we announced relief provisions for exporters and financial institutions located in FEMA-declared federal disaster areas in the wake of Hurricanes Katrina and Rita. We wanted to allow businesses and financial institutions that participate in Ex-Im Bank financing programs to address business concerns when appropriate and without penalty.

We recognized that the business interests of those financial institutions and exporters -- especially small businesses -- located in the affected areas would be secondary to more urgent personal concerns over the coming weeks and months. So we extended the terms of our loan facilities, as well as our insurance policy expiry dates, claim-filing deadlines, and shipment reporting and premium payment deadlines.

EX-IM BANK

Now I’ll give you a brief overview of what Ex-Im Bank does, and how we can work with you to expand your business. For those of you who are not familiar with Ex-Im Bank, we are the United States’ export credit agency – ECA. We exist to help you expand your business globally so that you can create jobs for workers here at home.

One of our key roles is to fill financing gaps to keep trade flowing to emerging markets, when commercial bank financing is unavailable or insufficient. We do not compete with private sector insurers and lenders. Rather we complement their efforts, and help them expand their business in emerging markets.

In fiscal year 2004 we authorized $13.3 billion in financing, up from $10.5 billion the previous year, to support approximately $17.8 billion in U.S. exports, a 25% jump from a year earlier.

On average, in excess of 80% of our transactions directly benefit U.S. small businesses.

We look for a “reasonable assurance of repayment” for every transaction we authorize. Yet, we also like to see ourselves as catalysts that pave the way in opening up and cultivating more difficult markets.

Ex-Im Bank is active in about 90 markets. We support every kind of export – from capital goods associated with large infrastructure projects, jet aircraft, medical equipment, and engineering and other services, right through to exports by thousands of small businesses including consumer products and agricultural goods down to seeds to grow peppers.

Ex-Im Bank offers three main products:

• working capital guarantees on commercial bank loans to provide U.S. companies with valuable capital to fulfill a sales order
• short- and medium-term export credit insurance which mitigates risk of buyer non-payment and allows U.S. companies to extend favorable terms to their international customers, and
• medium- and long-term guarantees on commercial loans to foreign buyers to help them purchase high-quality U.S. goods and services at competitive rates.

To reach companies around the country with these products, we work with lenders, insurance brokers, state trade offices, industry associations and our fellow federal agencies. We have 140 Delegated Authority lenders that can provide Ex-Im Bank-guaranteed working capital financing on a streamlined basis, without prior Ex-Im Bank approval.

PROJECT FINANCE

Ex-Im Bank’s project finance program supports U.S. exports for major infrastructure projects in emerging markets. Such projects open up major business opportunities for your industry in shipping large orders of U.S. capital goods to emerging markets around the world. In 2004 project and structured finance accounted for approximately 18% of Ex-Im Bank financing.

We support exports for a wide range of projects -- from hospitals, roadways and port security upgrades, to energy, power and telecommunications. Pemex and Sonatrach, the Mexican and Algerian oil companies, respectively, have extensively used Ex-Im Bank financing to buy U.S. exports which they then use for oil and gas exploration and production.

Qatar continues to expand its liquid natural gas facilities using Ex-Im Bank loan guarantees. We’ve supported transactions such as the Nanhai petrochemical project in China, a power-generation project in Brazil, and a cellular telecommunications network in Jordan. The Bank also is a key financer of pipeline projects ranging from the 1,100-mile BTC (Baku-Tbilisi-Ceyhan) project, which will transport oil from Azerbaijan to a Mediterranean terminal in Turkey, to the 700-mile Chad-Cameroon pipeline in West Africa.

Using these financing tools, Ex-Im Bank has supported close to a half trillion dollars in U.S. exports, and millions of U.S. jobs, since the Bank was founded in 1934.

TRANSPORTATION FREIGHT FINANCING PROGRAM

Now I’d like to update you on what we’re doing to move forward on the Transportation Freight Financing Program. The program represents an agreement between Ex-Im Bank and the Maritime Administration to provide Ex-Im Bank-guaranteed working capital loans for shipping, logistics and other companies involved in ocean freight transportation. It also updates certain shipping requirements so that exports now are eligible for Ex-Im Bank financing on non-U.S. flag carriers for transactions of up to $20 million.

Now Ex-Im Bank can provide working capital loans to freight forwarders and other export service providers, enabling them to extend credit terms to their export clients. The Bank also increased its working capital guarantee coverage from 90 percent to 95 percent of the export value for U.S. companies that ship on U.S. flag vessels.

The expanded working capital support makes freight forwarders and other export service providers more competitive in offering credit to exporters and foreign buyers. At the same time, it provides greater flexibility for U.S. exporters seeking Ex-Im Bank financing. And as U.S. exporters that ship on U.S.-flag vessels get expanded support, this benefits U.S. flag carriers. Thus, the agreement helps U.S. exporters, the U.S. commercial shipping industry, and its workers. It makes all of these groups more competitive and creates more U.S. jobs.

EX-IM BANK OUTREACH

To inform exporters, freight forwarders, export service providers and related industries about this program, we are taking several steps.

We’re focusing on working with banks, particularly in coastal areas, and we’ve already seen interest in the program. We’re expanding training on the program for our Delegated Authority Lenders. We will concentrate on lenders in freight forwarding markets such as Houston, Miami, New York, California, and Great Lakes ports.

Second, we will participate in selected trade shows of industries that could benefit from this program. These include:

• NCBFAA - National Customs Brokers & Forwarders Association of America, Inc.
• ECMC / Exporters Competitive Maritime Council.
• RICA / Railroad Intermodal Clearance Association
• AAPA / American Association of Port Authorities
• Transportation Institute (seafarers unions)
• American Maritime Congress (seafarers unions)

Third, we will undertake traditional forms of marketing including direct mail, and work through trade associations such as the ones I just mentioned to help us reach out to the industries that could benefit.

We also want you to be familiar with our regional offices in coastal cities. Kelly Kemp of our Southwestern regional office in Houston is here today, and would be happy to answer any of your questions. Our web site -- www.exim.gov -- contains contact information for our regional offices and our Delegated Authority Lenders. And the point person in our Washington headquarters is Pamela Bowers, reachable at 1-800-565-EXIM. She also would be happy to answer your questions.

CONCLUSION

In summary, the opportunities of trade are enormous. Certainly the trade figures I mentioned are evidence of the amount of trade coming into and leaving our ports. Ex-Im Bank wants to partner with you to access these opportunities in global markets – to help you grow your business and expand U.S. exports and jobs.

We’ve worked together to overcome recent natural disasters. Let us continue to work together -- through programs such as the Transportation Freight Financing Program -- to expand benefits to your industry, to U.S. exporters and their workers, and to the economy of this great nation.

Thank you.