EX-IM BANK FORMS PARTNERSHIP WITH SOUTH AFRICAN BANK
Johannesburg, South Africa: J. Joseph Grandmaison, a member of the Board of Directors of the Export-Import Bank of the United States (Ex-Im Bank), today signed a Master Guarantee Agreement entering into a partnership with ABSA Bank. Through this agreement,
Ex-Im Bank will be able to guarantee the repayment of loans made by ABSA Bank to creditworthy South African buyers that purchase U.S. goods and services. ABSA Bank is the third South African bank to sign a master guarantee agreement with Ex-Im Bank. To date, Ex-Im Bank has signed MGAs with two other South African banks, Imperial Bank and Standard Bank.
Ex-Im Bank's Master Guarantee Agreements are vehicles to strengthen the partnerships between Ex-Im Bank and South African banks. It will greatly enhance the ability of these banks to lend money to local businesses and increase the access of businesses to financial capital, goods and services, said Grandmaison.
Through the Master Guarantee Agreement (MGA), Ex-Im Bank provides a comprehensive guarantee to cover the lender's risk of nonpayment of principal and interest of the obligations of creditworthy foreign buyers of U.S. goods and services. Ex-Im Bank guarantees up to 85 percent of the U.S. export value of the purchase. The buyer is required to provide a cash payment covering the remaining 15 percent.
Ex-Im Bank is an independent U.S. government agency that assists in financing the export of U.S. goods and services to developing markets around the world, through export credit insurance, working capital loan guarantees, loan guarantees and direct loans. In fiscal year 2001, Ex-Im Bank approved $85 million for U.S. exports to 16 sub-Saharan Africa countries.