EX-IM BANK INSURANCE AND LIPPO BANK
Export Credit Insurance
The Export-Import Bank of the United States (Ex-Im Bank) insurance covers the failure of a foreign buyer or a financial institution (issuing bank) to make payment for U.S. exports due to commercial or political reasons.
The Ex-Im Bank's bank letter of credit policy insures commercial and political risks involved in financing u.s. exports. Many insurance policyholders are banks doing business in the U.S. that accept irrevocable letters of credit (L/Cs) issued by foreign financial institutions as payment for U.S. exports.
In FY'96, Ex-Im Bank's export credit insurance program received and processed in excess of 7,000 applications for coverage of foreign buyers and financial institutions. In FY`96, Ex-Im Bank insurance supported approximately $2.3 billion in export shipments to all countries. Most insurance transactions are decided at the staff level using standard operating criteria and documentation. Bank letter of credit transactions above $25 million are brought before the Ex-Im Bank Board of Directors for approval.
Ex-Im Bank Insurance for U.S. Exports to Indonesia
Ex-Im Bank insurance activity in Indonesia for FY'96: 74 applications received and $39 million of insurance issued for U.S. exports to Indonesia.
For the two transactions that involve Lippo Bank of Indonesia, Ex-Im Bank provided support for U.S. exports at the request of two U.S. banks. The U.S. banks applied for Ex-Im Bank's insurance policies. Lippo Bank did not apply for Ex-Im Bank insurance coverage.
Ex-Im Bank issued insurance coverage to two U.S. banks to cover short-term (180-day) letter of credit transactions. The U.S. banks accepted letters of credit from Lippo Bank of Indonesia that were issued on behalf of the Indonesian buyers to buy U.S. products.
1) First Union National Bank of North Carolina
- Amount: $800,000
Approved: December 1995 Transaction: Completed; Coverage ended 1/31/96
Products: American Cotton; Digital Carrier Systems
Repayment: Satisfactory — No outstanding exposure
- Amount: $100,000
Approved: May 1996
Transaction: Ongoing; Coverage due to end 12/1/96
Products: Mostly Medical Equipment
Experience: Satisfactory — No arrearage
Ex-Im Bank Activity in Indonesia
Indonesia is one of the world`s fastest growing economies and is one of the big emerging markets for U.S. goods and services. Ex-Im Bank`s total actual exposure in Indonesia is $3.5 billion of loans, guarantees and insurance. In FY`96, Ex-Im Bank authorized $875 million in financing to support U.S. exports to Indonesia.