The Bank recently came under fire for, among other things, competing with and disenfranchising the private sector. You can read more about the bank and the implications of its closure for investors in a piece I wrote entitled Export-Import Bank Shut Down In 2015? How It May Impact Your Portfolio.
Contrary to what many believe, 98% of the bank's transactions serve the needs of small business. The bank approved $20.5 billion in 2014 and these loans supported/backed $27.5 billion in U.S. export sales.
Yesterday the Ex-Im Bank approved a $22.4 million loan for AW139 helicopters to a company called North Pole Investments, an aviation lessor based in Panama City. North Pole's primary customer is Helistar S.A.S, a civil charter services operator from Columbia.
The helicopters are made by a company with operations in Philadelphia, PA, called AgustaWestland, but AgustaWestland is a wholly-owned subsidiary of Finmeccania S.p.A (BIT: FNC, trading at €11.81) based in Rome. It is also one of the main global players in the defense industry. The deal will be co-financed by with Italy's export-credit agency, Servizi Assicurativi del Commercio Estero, S.p.A. (SACE),
According to the announcement from the Ex-Im Bank, the work from the loan will support an estimated 200 jobs in AgustaWestland's U.S. based supply chain. In total, the company has 600 U.S. workers.
This will be the fourth financing made to AgustaWestland for helicopters purchased in Latin America. I'm not saying this is a bad transaction, especially if it helps increase decent paying jobs in the U.S., but I find it hard to believe it needed funding support from the U.S Ex-Im Bank, especially since the Bank only provided a letter of credit.