UK Export Finance (UKEF), Export Development Canada (EDC) and Investissement Québec (IQ) have announced a milestone financing partnership for customers of Bombardier’s new aircraft.
The new partnered financing working model involves UKEF, EDC and IQ working together to provide financing solutions to buyers of the Montreal-based vehicle manufacturer’s new C Series aircraft. Other ECAs may elect to join the partnership in the future.
Each partner will be guided by their own credit guidelines for individual market and customer limits, so each can chose to opt in or out of any given transaction. Terms of financing will remain consistent with the Aircraft Sector Understanding (ASU).
The pre-determined structure is a significant departure in EDC’s approach, spokesperson Phil Taylor tells GTR: “Our experience in this regard has usually been concluded on a transaction-by-transaction basis, particularly in the aerospace sector,” he says.
“While EDC does partner extensively with the private sector, this partnership is much more than transactional. As production continues to globalise, in all sectors, it follows that the ECA space will evolve to reflect the shared national interests.”
Commenting on the partnership, senior vice-president for financing and investments at EDC, Carl Burlock, says: “Working with UKEF and IQ will provide greater financing capacity that could allow us to finance more aircraft with a greater number of clients.”
Around 20% of the value of EDC loans to overseas buyers of the aircraft will be guaranteed by UKEF as the wings for the C Series aircraft are built by Bombardier in Belfast. The new partnership with EDC and IQ is the latest step in UKEF support for the UK’s aerospace exporters.
In a statement to GTR, a UKEF spokesperson says: “UKEF already works with French and German counterparts, Coface and Euler Hermes, to support UK content for Airbus export and with the US Ex-Im to support Rolls-Royce engines on Boeing aircraft. UKEF is open to working with all relevant partners to support this vital sector. There are also co-operation agreements in place with China and South Korea.”