The Power of Export and Its Critical Lubricant – Export Credit Award West

It is in every nation’s interest to export goods and services. A favorable balance of trade is an important measure of economic health. As an incentive to selling its goods, nations have created export credit agencies (“ECA”) to provide favorable financing terms to help clinch the sale. Fortunately, the OECD insists on standard terms, precluding cutthroat financing, and thereby leveling the playing field among the nations. With bank lending mainly rationed and the orderbook ballooning, the export credit agencies have stepped into the breach and continue to provide financing on highly favorable terms to shipowners as compared to what the banks are offering these days. Thus, it came as no surprise to us, that this category received an inordinate amount of nominations when compared to the rest. Interestingly, export credits deals ran the full gamut of structures, including loans, leases and project financings. As long as there was local content, the transaction was eligible. And, within the deals, the agencies themselves provided funding and/or guarantees. It is hard to imagine what the orderbook would look like today in terms of cancellations and delays if not for the ECAs.

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