BNDES approves financing for six SkyWest Embraer E175 commercial jets

The Brazilian Development Bank (BNDES) has confirmed its approval of R$670 million in financing for the export of six Embraer E175 commercial jets to North America’s SkyWest Airlines (SkyWest). Delivery will take place by the end of this year.

The financing will be through BNDES Exim Post-shipment, with disbursements made in reais in Brazil in favour of Embraer. SkyWest (the importer) will assume the commitment to pay BNDES in US dollars to generate foreign currency for Brazil. This is the second financing tranche with BNDES for the sale of Embraer aircraft exports to SkyWest Airlines using the innovative Aircraft Financing Insurance Consortium (AFIC) offering from Marsh, one of the world’s leading insurance broker. The first financing took place in December 2020 for R$ 400 million. The Aircraft Non-Payment Insurance (ANPI) policy is underwritten by four international insurance groups: AXA XL, AXIS Capital, SOMPO International and Fidelis Insurance.

The ANPI policy provides that, in the event of default by the debtor, the insurers make all scheduled payments to the lender until all outstanding principal is repaid. The AFIC insurance offering also increases the flexibility and speed of implementation of financing between the parties for buyers of Embraer aircraft. Currently SkyWest operates 232 Embraer E175 jets while, since 1998, BNDES has provided ten different financing facilities to SkyWest covering up to 200 aircraft, comprising 18 delivered EMB120 aircraft, 175 delivered E175 aircraft and seven to-be-delivered E175 aircraft. (£1.00 = US$1.10 = R$5.72 at time of publication).