First Union National Bank has extended $10 million in medium-term loans backed by guarantees from the US. ExportImport Bank to Nedbank, South Africa's third-largest bank.
The loan is the first to South Africa to obtain Eximbank guarantees since U.S. banks suspended lending to thal country nearly a decade ago.
Charlotte based-First Union. the ninth-largest U.S bank with $73 billion in assets. said the loan will be used to support U.S. companies exporting capital goods to South Africa.
The guarantees reduce repayment risks and allow lenders to offer competitively priced financing to foreign customers of U .S exporters.
Since January, First Union has handled more than $100 million in trade transactions from South African banks, as well as trade transactions for more than 250 American exporters, the bank said in a statement.
First Union added that it expects two more Eximbank credit guaranty facilities
to be approved by yearend, as well as several other trade credit arrangements,
First Union established financial relationships with South African banks immediately after the U.S. government lifted its sanctions in late 1993.
The bank's international division provides correspondent banking services to more than 1,300 foreign banks.