The threatened closure of the US Export-Import Bank, which supports American exporters with loan guarantees, could make financing tougher for aircraft maker Boeing, rating firm Standard & Poor's said Wednesday.
Authorization for the 81-year-old Ex-Im Bank expires on June 30, after Congress renewed it for nine months last September. So far the Republican majority and Democratic minority on Capitol Hill are unable to agree on the fate of the independent export credit agency.
Boeing is the largest beneficiary of the bank's credit support, and could suffer in the long term it its authorization lapses next Tuesday, said S&P analyst Philip Baggaley in a note.
The Chicago-based aircraft manufacturer "should have little problem arranging financing for its aircraft exports in the near term," thanks to ample lending available from commercial banks, aircraft leasing companies and the capital markets, Baggaley said.
"However, in the long term, Boeing might have to step up its direct customer financing more substantially in a global recession, when other sources of financing would dry up," he said.
That scenario could occur as Boeing's earnings are under pressure because of weaker demand for its aircraft, raising the prospect of a credit downgrade, the analyst added.
In a recent Financial Times opinion article, two professors, Gregory Chin at York University in Canada and Kevin Gallagher at Boston University, warned that the demise of the Ex-Im Bank would give an advantage to China.
"The Ex-Im Bank has proven strategic in geopolitical and economic terms for the United States. Now, as China rises, the US should be increasing the presence and performance of the Ex-Im Bank to both serve as an example for responsible global public finance, and to bolster the presence of American firms in global markets," they wrote.
Source: AFP
GMT 12:09 2018 Sunday ,09 December
Investment minister witnesses MoU to support clean technology start-up acceleratorGMT 10:25 2018 Friday ,07 December
Venezuela inks deals worth six bn dollars with RussiaGMT 15:42 2018 Tuesday ,04 December
EBRD President Suma Chakrabarti to visit EgyptGMT 08:27 2018 Sunday ,02 December
G20 leaders back WTO reform despite clear divisionsGMT 08:27 2018 Tuesday ,27 November
Eurasian Economic Union to protect itself from anti-Russian sanctionsGMT 12:21 2018 Sunday ,25 November
Egypt's Investment minister meets Lebanese PM to boost economic cooperationGMT 21:47 2018 Friday ,23 November
French lawmakers fear intimidation by 'yellow jacket' fuel protestersGMT 11:56 2018 Tuesday ,20 November
South Korea hosts Boao Forum for Asia in SeoulMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Send your comments
Your comment as a visitor