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Successful deals guaranteed
01 November 2003
With many banks closed for standard loans, export credit
is becoming even more important. But, the challenge
for banks is to make money from these deals, writes
Ben Harrington.
Read more:
Export credit
airline
Airlines
securitization
Aviation
"Export credit is just not very sexy," says one investment banker, but his clients do not care. All they are worried about is financing aircraft and the number of deals have risen dramatically in the past 12 months.
While many banks are questioning whether the returns they get from arranging and lending export fees make it worth arranging deals, the 2003 survey shows airlines are being forced to rely on government guarantees.
"Airlines have shown an increased interest in export credit financing as other sources of lending have dried up," says John Youd, business manager for Airbus at the UK's Export Credits Guarantee Department in London. "Banks appear to be less keen to take airline risk and investors are reluctant to provide the equity required for tax leasing structures."
Even though banks say they are unhappy with the returns, most feel that they need to be able to offer their...
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