RNC’s conservatives lost the EXIM re-authorization vote and took a different EXIM program hostage. After losing the EXIM reauthorization fight to outgoing House Speaker Boehner and the RNC majority, RNC’s right wing adopted new tactics in Senate and have blocked filling any of the 3 vacancies on EXIMs five member board of directors. The vacancies cap EXIM at $10MM transaction levels and limit eligible transactions to those with terms under one year, well below EXIMs normal authorization levels. At the annual April conference EXIM reported approximately $10B in U.S. exports and related jobs are impacted. The RNC’s cap on EXIM comes despite growing worldwide evidence that OECD and emerging market governments outside U.S. are increasing the amount of governments’ export credit agency (ECA) support for their manufacturers and exporters.
In classic Barney Fife fashion for which RNC conservatives are now known, limiting EXIM to the ‘lower’ approval levels materially defeats their stated goal to prevent EXIM from competing with market alternatives. There is significant commercial market capabilities in under $10MM short term transaction — the market where conservatives have locked in EXIM. Meanwhile EXIM is blocked from providing U.S. companies the medium term/+$10MM credit support, the segment where commercial market capabilities are limited to non existent. Well policed, Deputy Fife.
Recent market pricing
- $700MM insured commodity sales to high yield customers. Pricing @ 19BPs
- $100MM insured accounts receivable balances. B3 rated corporate credit. Pricing@ 3.80% per annum