The Export-Import Bank of the United States (US Ex-Im) has extended its offer to reduce its exposure fee by one third on asset-backed financings of new US-manufactured large commercial aircraft and spare engines. The offer has been extended by 39 months, and only applies to international buyers in countries implementing the Cape Town treaty.


The extension will cover aircraft and spare-engine financings approved from October 1, 2007 and contractually scheduled to deliver on or before the end of 2010. It is also required that the underlying purchase contract was a firm contract as of April 30 2007.


“By extending our offer to reduce our exposure fee through 2010, US Ex-Im is reaffirming our commitment to the Cape Town treaty. We firmly believe that this treaty and the international registry will result in greater predictability for aircraft financiers by significantly reducing the legal risks associated with cross-border, asset-backed aircraft financings and leases,” US Ex-Im chairman and president James Lambright comments.


The Cape Town Treaty is an international agreement aiming at facilitating cross-border financing and leasing of aircraft, helicopters and aircraft engines. It has established a legal framework for an international registry of the security and leasing interests in aircraft, helicopters and aircraft engines owned or operated in countries signed up to the treaty.
The treaty, also known as the Convention on International Interests in Mobile Equipment, was concluded in November 2001.


“The Cape Town Treaty will expand sources of aircraft financing, increase the amount of financing and lower the cost for airlines. In turn, the lower financing cost will help airlines expand their fleets and buy more new aircraft, thereby supporting jobs in the aerospace industry,” as US Ex-Im’s vice-president of transportation, Robert Morin.


A common approach agreement has also been reached between US Ex-Im and European export credit agencies, whereby a uniform Cape Town discount will be applied to all aircraft delivered after the end of December 2010, or are under firm contract entered into after April 30, 2007. This agreement was concluded via the Organisation for Economic Cooperation and Development (OECD) and its new sector understanding on export credits for civil aircraft.