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BAFT Calls on EXIM to Renew Partnership with Private Export Funding Corporation (PEFCO)

by Diana Rodriguez | Aug 12, 2020
On August 12, BAFT responded to EXIM’s Federal Register Notice sharing the strategic importance of the EXIM partnership with PEFCO.

BAFT has long supported EXIM’s operations and recognizes the longstanding and strategic importance of its 50-year partnership with PEFCO. As the EXIM Board reviews the PEFCO agreement due to expire at the end of the calendar year, BAFT filed comments calling on EXIM to renew its partnership with PEFCO. 

At a time of increasing global competition, EXIM’s partnership with PEFCO takes on greater significance. The availability of PEFCO support helps U.S. exporters counter the competitive advantages to foreign competitors. PEFCO provides attractive and competitive fixed and floating USD funding alternatives that complement banks’ suite of funding solutions and is a valuable component of the broader industry supporting U.S. exporters.

PEFCO is a successful public private partnership that decreases EXIM’s reliance on taxpayer-provided funding (direct loans). PEFCO does not compete with commercial banks as it has no origination capability. Rather, PEFCO plays an important role to “crowd-in” transactions or syndications that might constrain lenders’ balance sheets, helping exporters compete for important sales.

PEFCO’s funding capacity may be increasingly helpful in light of bank balance sheet limitations that may arise in an evolving regulatory environment, with growing counterparty and country constraints. Considering the liquidity- and credit-challenged COVID-19 environment, the EXIM-PEFCO partnership becomes even more important to navigate the credit cycle ahead.

On August 13, Stacey Facter, Senior Vice President, Trade Products will participate in an open meeting of the EXIM Board to share BAFT member priorities.

To view the comment letter, visit our Library of Documents under the Comment Letters section.