The French Parliament Extends the Guarantee of the French State Via COFACE to All French Civil Aircraft

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On 29 December 2012, the French Parliament passed a long-awaited law that significantly extends the support of the French State for the export credit financing of aircraft with French content through COFACE, the French export credit agency. COFACE was previously entitled to grant its 100% financial guarantee backed up by the guarantee of the French State only to Airbus financings. The new law, which will become effective when the implementation decree is issued (expected by the end of March 2013), extends the ability of COFACE to grant such a guarantee to financings for all aircraft with French content, allowing transactions for the financing of ATR, Dassault Falcon, Eurocopter and Sukhoï SuperJet aircraft to benefit from the same full financial guarantee. In addition, the law extends the guarantee of the French State to the financial guarantee by COFACE of notes issued on capital markets to finance or refinance export credit transactions for all such aircraft.

Extension of the Guarantee to All Aircraft -

Until now only financings for Airbus aircraft were eligible for a 100% unconditional on-demand guarantee by COFACE (backed by the guarantee of the French State). Such a guarantee permits the lending banks to be reimbursed for all payment defaults regardless of the underlying reasons for such default. Financings for other aircraft with French content have heretofore had to rely on traditional export credit insurance based on specified events of loss and subject to limitations as to the amount insured...

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