The US Export-Import Bank (Ex-Im) has launched a reinsurance programme with the private sector for its aircraft loan portfolio.
The initiative provides up to $1 billion in cumulative loss coverage per borrower in the lender's commercial aircraft portfolio, Ex-Im says. Coverage is shared between the bank and 10 insurance companies.
“Ex-Im is committed to a path of financial innovation and risk-sharing with the private sector," says Jeffrey Goettman, acting head and chief operating officer of Ex-Im, in a statement. "This landmark deal is a stepping stone to a more creative use of the private markets in global trade finance for Ex-Im."
The move follows a mandate to engage in "risk sharing" with the private sector as part of its reauthorisation in 2015.
The reinsurance programme has no impact on Ex-Im's continued lack of a board quorum, which bars it from approving any financing deal valued at more than $10 million and effectively closing it to new commercial aircraft activities.
Ex-Im is partnering with XL Catlin, Liberty Specialty Markets, Everest and seven other reinsurers on the new programme.
Aon advised Ex-Im on the reinsurance partnership.