News

In its first transaction ever in the Republic of Azerbaijan, the Export-Import Bank of the United States (Ex-Im Bank) has approved a $66 million long-term loan guarantee as part of a financing package that will enable The Boeing Co., Seattle, WA, to export two B757-200 aircraft to Azerbaijan Airlines (AZAL) in Baku. Barclays Bank PLC, New York, NY is the guaranteed lender.

Ex-Im Bank opened in Azerbaijan for short- and medium-term public sector business in October 1998 and also is open in that market for long-term asset-based and other structured financings.

We are delighted to be doing our first transaction in Azerbaijan, said Ex-Im Bank Chairman James A. Harmon. This is the kind of transaction Ex-Im Bank should be doing, leading the way in doing well-structured deals in a new emerging market.

The transaction is structured to include the sovereign guarantee of the Republic of Azerbaijan, a separate guarantee from the International Bank of Azerbaijan, and also is secured by a first-priority security interest in the airframes and engines. The Boeing aircraft are equipped with Rolls Royce engines financed by the United Kingdom's Export Credit Guarantee Dept. (ECGD). Azerbaijan would be unable to obtain the 12-year credit terms without Ex-Im Bank and ECGD participation. The transaction is structured as a full payout finance lease.

Government-owned AZAL was organized in 1992 as Azerbaijan's flag carrier. The airline serves domestic and CIS destinations as well as Middle East and European cities with a fleet of 39 Soviet-made aircraft and two used Boeing 727-200s, but is seeking to modernize its fleet. The deliveries of the new Boeing aircraft are scheduled for May and November of 2000.

Ex-Im Bank is an independent US government agency that helps finance the sale of US exports to developing markets throughout the world by providing loans, guarantees, and insurance. In fiscal year 1999, Ex-Im Bank helped to finance nearly $17 billion of U.S. exports worldwide.