Thought Leadership

A sad saga continues for a true U.S. success story as the U.S. Export Import Bank (Ex-Im Bank) remains under a dark cloud. In June of last year, Ex-Im Bank’s authorization lapsed. It was reauthorized five months later, but more than another year has passed without the bank being able to authorize deals over $10 million, as the Senate has not confirmed new Board members, denying the bank a quorum it needs.

Even 50 years into the women’s liberation movement and even with increasing numbers of women at the negotiating table, women are under-represented at senior levels of finance companies, and views about how to conduct finance and business negotiations remain decidedly male-dominated.

When I first started at the US Export-Import Bank, my wife would ask me regularly whether I had “kicked banker butt.”

Donald Trump’s high-handed The Art of the Deal approach continues to typify conventional wisdom about deal making.  To succeed, women need to be as or more aggressive than men to be taken seriously.  In an upcoming film at the Sundance Festival, the film Equity about female investment bankers is being heralded as “the first female-driven Wall Street film.”  The female lead characters are tough, aggressive and even ruthless.

Agency lenders do not get the respect they deserve from a market too quick to point to their deficiencies. Hence I give you Side 2 of this two part series on agency lenders – The Trouble with Agencies – a title inspired by the Alfred Hitchcock film The Trouble with Harry. The film uses the focal point of Harry, who in typical Hitchcock fashion is dead, but it’s not a murder mystery.   Rather, Harry’s corpse is a plot device used to motivate a love story between Shirley MacLaine’s and John Forsythe’s characters.  

Unlike Harry, agencies aren’t dead, but many do seem quick to want to bury them[1].  The favorable aspects of agencies, highlighted in Part 1, come with baggage that often makes life difficult for agencies and those who work with them.   However, a description of the agencies’ troubles is not the article’s goal.  Rather, I wish to convey how a better understanding of agencies will facilitate working with them more effectively.

This two part series examines the positive and negative aspects of working with “agency lenders” or “agencies”. “Agency Lender” is a name given to a group of publicly controlled or officially affiliated lenders.  They have either “multilateral” relationships – support from and for a large number of countries - or “bilateral” relationships, which historically entailed affiliation with one sovereign lender, which had bilateral relationships with sovereign borrowers.  Agency lenders now lend to sovereign and non-sovereign entities and include export credit AGENCIES, multilateral development AGENCIES, and other bilateral and multilateral lending and finance AGENCIES.  You now understand why these lenders are called agency lenders or agencies.  

This two part series examines the positive and negative aspects of working with “agency lenders” or “agencies”.  “Agency Lender” is a name given to a group of publicly controlled or officially affiliated lenders.  They have either “multilateral” relationships – support from and for a large number of countries - or “bilateral” relationships, which historically entailed affiliation with one sovereign lender, which had bilateral relationships with sovereign borrowers.  Agency lenders now lend to sovereign and non-sovereign entities and include export credit AGENCIES, multilateral development AGENCIES, and other bilateral and multilateral lending and finance AGENCIES.  You now understand why these lenders are called agency lenders or agencies.  

My experience as a project and structured finance lender was that fewer than 10% of projects were sufficiently well developed for proper consideration when they were first brought to the bank’s attention. I usually needed only about ten minutes to review and send the deal back to the project developer for substantial additional work, which in many cases was tantamount to rejection. This often left me frustrated as most project teams were earnest, hard-working, and well-intentioned.

A little over a decade ago, I was asked to deliver a luncheon speech to describe how financial restructurings work and how to avoid them.  

At that time, I was a managing director at the US Export-Import Bank and was dealing with the fallout from the Asian financial crisis, along with dozens of public agencies and private lenders.  As a veteran of a dozen or so debt workouts following the boom and bust of international coal and oil and gas investments in the 1980s, I had a somewhat unique perspective. 

The perspective I presented then and in which I still believe surprised everyone: the stages of a financial restructuring mirror the five stages of death and dying, as presented by Elisabeth Kübler-Ross in her seminal work On Death and Dying.