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Government opens EXIM Brazil as BNDES subsidiary

05/05/2010

The Bank will also manage the Foreign Trade Guarantor Fund

The support efforts earmarked for the export sector disclosed today by the federal government includes two important measures related to the BNDES. The first is the opening of the Credit Agency for Exports from Brazil (EXIM Brasil - Agência Crédito à Exportação do Brasil S.A), an export credit agency that will centralize and increase the government efforts in supporting the export sector. In parallel, the BNDES will be the manager of the Foreign Trade Guarantor Fund (FGCE - Fundo Garantidor de Comércio Exterior), a private instrument that will be responsible for offering guarantees to EXIM Brazil operations.

With EXIM Brazil, the country will gain an institution exclusively dedicated to supporting the export sector, with a specific focus. The purpose is to strengthen Brazilian foreign sales, increasing opportunities to access the international market for high added-value products and services, which are manufactured and come from our country.
The organ will be an integral subsidiary of the BNDES and will enjoy all the existing structure in its Foreign Trade Division, as well as the Bank’s operations portfolio. Currently, this portfolio is at around US$ 13 billion in operations, and there is still US$ 20 billion in perspective projects.

According to the president of the BNDES, Luciano Coutinho, with EXIM the financing structure for exports will be simplified, “to provide more ability and competitiveness to commercial operations”.

He stated that EXIM Brazil may carry out operations that face, at the moment, financing difficulties in the market. As an example, he mentioned sales of heavy equipment for energy, locomotives, ships, rigs and aircraft.

Coutinho said that the existing portfolio and structure will allow the transition to EXIM Brazil to happen with no break in the continuity of operations.

The new company will be set up by adapting the Special Agency for Industrial Financing (Finame - Agência Especial de Financiamento Industrial), BNDES’ subsidiary. “There will be no cost increase, as we are using a structure that already exists in the BNDES,” said Coutinho. The new subsidiary, as does the BNDES, already has its operational office in Rio de Janeiro.

The FGCE will be managed by the BNDES, in a segregated fashion from EXIM Brazil. The Credit Division of the BNDES will be responsible for the risk analysis of the new credit agency’s operations, ensuring thoroughness in the analysis and segregation regarding EXIM Brazil’s activities.

The Fund’s initial equity will be R$ 2 billion, reaching potentially and substantially higher guarantees, according to the leverage defined. Due to its private nature, FGCE will not be subject to budget restrictions, fostering swiftness in granting guarantees.

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