February 21, 2014
Credit: G550: Gulfstream
A $300 million deal involving the sale of eight Gulfstream aircraft to China’s Minsheng Financial Leasing Co. helped push the Export-Import Bank’s financial backing of the business aircraft and helicopter market to more than $1 billion.
The milestone was reached a little less than two years after the Ex-Im Bank rolled out new procedures to expedite business aircraft funding during the 2012 European Business Aviation Convention and Exhibition. At the time, Ex-Im Bank Chairman and President Fred P. Hochberg stated a goal of supporting at least $1 billion in business aircraft and helicopter financing by the end of 2014. “Ex-Im Bank met the goal well in advance,” the bank says.
The procedures have been implemented during a time when financing has remained difficult to obtain for many segments of the business aircraft market and considered a significant stumbling block to industry growth. Hochberg pledged to have the bank work with industry experts on due diligence and credit analysis to speed up foreign-buyer financing.
The General Aviation Manufacturers Association strongly backed the 2012 announcement and has since pushed for congressional support of the bank, as U.S. general aviation manufacturers increasingly turned to Ex-Im facilities for their international sales.
“Business aircraft is a great example of a homegrown American industry that is creating jobs in communities across the country,” Hochberg says. The bank estimates that the latest $300 million loan supports 2,100 U.S. jobs.
The $300 million loan was extended by Apple Bank for Savings to Tianjin, China-based Minsheng to finance the Gulfstream aircraft. Minsheng signed a memorandum of understanding with Gulfstream in 2011 to buy up to 50 aircraft of various models. The purchase financed by Ex-Im involved four G450s and G550s. That sale occurred in early 2013 with the financing wrapping up at the end of December.
Gulfstream President Larry Flynn notes the company’s fleet in China has grown from 10 in 2008 to more than 80. “The support Gulfstream receives from Ex-Im Bank allows us to be more competitive around the world,” Flynn says.