Private Export Funding Corporation

Summary of Private Export Funding Corporation

A private corporation organized in 1970 for the purpose of providing medium- to long-term financing to foreign buyers of U.S. goods and services. PEFCO is owned by commercial banks and major industrial firms. Working capital is raised by issuance of commercial paper, guaranteed by the U.S. Export-Import Bank (read this and related legal terms for further details), and through a fifty million dollar revolving line of credit with Exim- Bank. Loans made by PEFCO are designed to supplement traditional financing and most bear the guarantee of Eximbank. In January 1979 PEFCO introduced the Loan Purchase Program, under which it purchases from banks nonrecourse debt obligations of foreign importers so long as these obligations have been guaranteed by Eximbank. The object of this program is to provide exporters with the liquidity essential to expand export sales.

(Main Author: William J. Miller)