Cessna becomes US Ex-Im Bank Qualified Advisor
The Export-Import Bank of the US has approved Cessna Finance Corporation as a Qualified Adviser under its programme developed to fund business jet and helicopter exports.
Under the programme, Cessna Finance Corporation will assist Ex-Im Bank in arranging for funding of Cessna jets and Bell helicopters. It is the second Qualified Adviser following Airfinance which launched the scheme.
The Qualified Adviser programme was set up in 2013 to help increase the bank’s support of US business jet and helicopter exports. Fred P. Hochberg Ex-Im Bank’s chairman and president announced plans to introduce the Qualified Advisors Scheme at EBACE in Geneva, Switzerland last year at the same time as he announced that Cessna would receive $350 million in guarantees to allow it to finance Cessna aircraft and Bell helicopters.
“The Qualified Advisors Program enables Ex-Im Bank to leverage private-sector experience in financing helicopters and smaller aircraft,” says Kathleen Flanagan, senior loan officer, US Ex-Im Bank. “We want US exporters to benefit from this more in-depth expertise, which is beyond what we can do in this area on our own at the present time with our limited staffing.” Historically, Ex-Im Bank has had significant experience underwriting guarantees for commercial aircraft, but US business jet manufacturers have requested more support for their exports.
Under the scheme, Cessna Finance (part of Textron Financial) will work closely with Ex-Im Bank and buyers to find funding sources other than Textron Financial to provide financing that Ex-Im Bank can guarantee. Joining the Qualified Advisors Scheme will give Cessna an opportunity to work with Ex-Im Bank to source funding for customers in jurisdictions where the manufacturer cannot increase its own risk or exposure.
The Qualified Adviser scheme will not replace a $350 million Ex-Im Bank guaranteed loan from PNC Bank to fund Cessna and Bell Helicopter products, in which Textron Financial Corporation books loans but takes the risk as financial borrower. Ex-Im Bank is serving as the guarantor for the facility that was approved last year. Cessna recently drew down the first disbursement from the facility.
Ex-Im arranged a similar $500 million facility for Cessna Finance Corporation in 2008. It also funded this directly.
The first qualified adviser was Airfinance, a specialist firm run by Kirsten Bartok, former vice president of structured finance and corporate development at Hawker Beechcraft; Tom Low, past president of Textron Financial and Cessna Finance Corporation; and Brent Cox, who was head of credit at Cessna Finance Corporation.