Citi has signed its first transaction guaranteed under the US Exim’s medium-term delegated authority programme (MTDA).
Citi will provide a US$970,000 US Exim-backed loan to Mexican drainage contractor Exinsa, to purchase a TT2550 chain trencher in Cancun.
The loan will enable Exinsa to purchase equipment for its construction business from Trench-Tech International, a small-business manufacturer based in Texas. The chain trencher, a piece of construction equipment used to dig trenches, will be used by Exinsa to install drainage systems.
US Exim’s MTDA programme is designed to reduce transaction turnaround time and provide additional support for US small-business exports. US Exim hopes the programme will increase the volumes of exports by US based small and medium-sized businesses, one of the main goals outlined by President Obama’s National Export Initiative.
“US Exim is partnering with commercial lenders to ensure that foreign buyers have ready access to financing for their purchases of US goods and services. The exports supported through this programme are helping small businesses maintain American jobs,” says US Exim chairman Fred Hochberg.
Under the programme, approved lenders have delegated authority to underwrite and authorise US Exim’s guaranteed medium-term transactions. The lender is required to share the credit risk by retaining 10% of the commercial risk, while also retaining 10% of US Exim’s exposure fee.
Transactions involving small-business exporters or small-business suppliers are eligible for increased US Exim risk coverage, and the lender's commercial-risk retention will be reduced to 8%, the bank says.
Last Updated June 21, 2012
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