BNDES recognized in China for financial innovation in the export of Embraer aircraft

Eleanor Steed
By Eleanor Steed October 17, 2016 12:46

BNDES recognized in China for financial innovation in the export of Embraer aircraft

The Brazilian Development Bank (BNDES – Banco Nacional de Desenvolvimento Econômico e Social) was recognized for its operation with the Export-Import Bank of China (CEXIM) for the export of Embraer’s E195 commercial aircraft. BNDES received The Innovative Trading Award, in China, for the first “on-lending” aircraft finance operation with CEXIM, valued at USD 100 million.

BNDES obtained a loan with CEXIM, which structured “on-lending” financing to the aircraft importer, a company owned by the Chinese conglomerate HNA Group. In contrast to most BNDES export credit operations for the aerospace sector, this operation is based on CEXIM’s credit limit and is in accordance to the Memorandum of Understanding signed by both banks at the 2014 BRICS summit, in Brasília.

The innovative financing model enabled BNDES to mitigate the commercial risk of the operation by leveraging the sovereign proxy status of CEXIM, a company wholly owned by the Chinese government. In addition to marking the first aerospace financing of BNDES to China—a promising market for the sector, this operation also broadens the bank’s support for Embraer at a moment when the Company is seeking new customers for its new family of commercial aircraft, the E-Jets E2, in more countries.

Eleanor Steed
By Eleanor Steed October 17, 2016 12:46