The Export-Import Bank of the United States (EXIM), the official U.S export credit agency (ECA) and a wholly owned federal government corporation, has announced the launch of a landmark $1 billion reinsurance programme with private-sector re/insurers.
EXIM Bank worked with a group of 10 reinsurers to complete the programme, led by XL Catlin, Liberty Specialty Markets, and Everest Re, and used Aon Benfield as an intermediary in the deal.
The programme provides loss coverage for EXIM’s existing portfolio of large commercial aircraft financing transactions, and was funded by fees generated by these original transactions, so will not cost U.S taxpayers additional funds.
It represents the largest ever public-private risk-sharing arrangement for a U.S government credit agency, and uses the maximum allowable coverage permitted under EXIM’s charter to fulfil the Bank’s 2015 congressional reauthorisation mandate to minimise taxpayer losses by sharing risk with the private sector.
“We are excited to announce this historic arrangement with the private sector that protects EXIM Bank and safeguards U.S. taxpayers’ interests without requiring additional funding,” said EXIM’s Executive Vice President and Chief Operating Officer (COO) Jeffrey Goettman.
He added: “EXIM is committed to a path of financial innovation and risk-sharing with the private sector. This landmark deal is a stepping stone to a more creative use of the private markets in global trade finance for EXIM and assists in accomplishing our mission to support U.S. exports and American jobs.”
Eric Anderson, Chief Executive Officer (CEO) of Aon Benfield, also commented: “Aon Benfield’s work with EXIM Bank is another fantastic example of how the re/insurance industry can assist public entities in the United States to de-risk their balance sheets and remove potential volatility, to the benefit of the government and taxpayers.
“Our firm is committed to developing solutions in this space that utilize high-quality capital and provide diversifying growth opportunities for re/insurers.”