Bloomberg News
WASHINGTON - The U.S. government's export-support agency is for the first time offering the chance to buy some of its loan-support risk to insurance companies, banks, and pension funds from any country.
By giving private investors a chance to hold some of this risk - and earn a slice of its fees - the U.S. Export-Import Bank says it will be able to back more U.S. exports.
"As we come out of the crisis in Asia, there are many new opportunities out there, but very few of these institutions have focused on them the way we have," said James Harmon, the bank's chairman. "Many of these institutions will want to be our partner."
The new program will allow the bank, which guaranteed or insured $13 billion of loans last year, to expand its work and thus to encourage more U.S. exports, Mr. Harmon said. It will also help bring new investors into higher-risk markets, benefiting both the investors and the targeted industry, he said. The bank has not defined how private investors will share its debt. In a request for proposals published on its Web site, the bank said it did not "endorse or indicate any preference for any particular technique" to transfer the risk.
Any company or group of companies interested in bidding on the loan risk can do so, including those based overseas, Mr. Harmon said.
Investors can choose what Export-Import Bank risk they want. Companies can take the risk from a percentage of all the loan guarantees issued in a year, or they can assume it only for those guarantees on, say, natural gas plants in Eastern Europe.
The proposals, which are due April 4, should also explain how the private companies would get paid, and how they would assume the risk, the bank said. A pre-proposal conference will be held on March 7, and the bank will choose the best offers by April 20.
The bank offers political and commercial insurance, as well as medium- and long-term loan guarantees for U.S. exporters. Mr. Harmon said the bank is a good credit risk.
"We've got a pretty low loss ratio, in good part because we're the U.S. government. Not too many institutions want to default to the U.S. government," Mr. Harmon said.
