Grey2White Workshop Hosted by the USUBC, Puts an Exclamation Point on the International Trade Mission

 

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On Wednesday, September 12th, US-Ukraine Business Council (USUBC), in cooperation with the law firm of Brown Rudnick, Broad Street Capital Group and Ankura Consulting, held its second Grey2White ™ workshop in Kyiv. Over 45 guests attended, including the Former First Lady of Ukraine, Kateryna Yushchenko.

IMG-1cae7e700ec217303b52f13cd14e1c96-VThe Grey2White workshop resulted in consensus among the participants on the need of Grey2White program in Ukraine and in other post-Soviet countries. The lively and spirited discussion continued after the official part of the program was concluded.

The workshop’s presenters featured financiers, former prosecutors with the US Department of Justice and enforcement attorney with the US Securities Exchange Commission.

Grey2White workshop served as the exclamation point on the highly successful International Trade Mission through Ukraine and 20160523_094104Uzbekistan, in which the speakers of the Forum participated, along with representatives of eight companies from four countries.

During the Mission, its participants conducted a number of high-level government, NGO and private sector meetings to identify and engage projects in the areas of healthcare, ICT, energy savings, agriculture and aerospace. Over $1.32 billion of project mandates are expected to be awarded to the Mission Participants in the next 60-90 days. Companies wishing to participate in the projects, which have started the development during the Trade Mission, will have an opportunity to learn more during the upcoming International Opportunities conference in November, hosted by the Broad Street Capital Group.


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President of Kazakhstan visits pioneering Center of Tomotherapy and Nuclear Medicine, program managed by the Princeton Healthcare Alliance

(Astana, Kazakhstan)Yesterday, August 29th, President Nazarbayev of KazakhstaPHA Logon visited a newly opened Center of Tomography and Nuclear  Medicine at the National Research Hospital in Astana the capital of Kazakhstan. Prime Minister of Kazakhstan Hon. Bakhytzhan Sagintayev and the Minister of Health Hon. Elzhan Birtanov were also in attendance.

President Nazarbayev expressed his support for the outstanding effort by Dr. Abay Baigezhin, Director of the hospital and praised the Consulting Radiation Oncologist Dr. Daniel Fass, Chief Medical Officer of the Princeton Healthcare Alliance (PHA), for bringing this state-of- art technology to the people of Kazakhstan.  Dr Fass, who is internationally recognized as a pioneer in Radiation Therapy with over ten years of experience utilizing  Accuray’s Tomotherapy HI-HD equipment explained to the President the unique advantages of that system in treating many malignancies. “This is the first Tomotherapy installation in Central Asia. It is expected patients from throughout the region will be treated at the center.” said Dr. Fass

The clinic will begin treating patients in November and currently has staff training in the Madison, Wisconsin. Building on the success of this project the Clinic plans on expanding to other therapeutic modalities including immunotherapy and stem cell treatments harnessing the advances in precision medicine . Princeton Healthcare Alliance is dedicated to bringing US technology, expertise and financial solutions to improve the lives of citizens in emerging markets the world over.  Next week Dr. Fass, along with other members of the Princeton Healthcare Alliance, will travel to Tashkent, as part of the Trade Mission led by the Broad Street Capital Group (www.broadstreetcap.com) to identify, structure and finance advanced healthcare solutions for the Republic of Uzbekistan

Broad Street Capital Group to lead an international Trade Mission to Uzbekistan.

For Immediate Release

BSCGLogoNew York, August 26, 2018. Fresh from its success of developing a pioneering $250 million, 20-year OPIC insured, capital markets financing, Broad Street Capital Group announced today that it will lead an international Trade Mission to Uzbekistan between September 5th and 9th, 2018.

The goal of the Trade Mission is to identify and engage large project development and financing opportunities in the areas of health care, distributed and renewable energy generation, agriculture, ICT and aerospace

With its proven ability to develop and structure complex financing solutions ranging from $100 to $500 mil., and utilizing support of Export Credit Agencies (ECAs)such as US EXIM Bankand of US government development institutions,
such as Overseas Private Investment Corporation (OPIC), Broad Street Capital Group is uniquely positioned to bring low-interestlong-term financing to projects to be developed by the Trade Mission participants and supported by the Government of Uzbekistan.

The mission participants will also introduce an innovative Grey2White™ initiative designed to assist local companies in becoming more bankable and transparent to western partners and international financial institutions.

Joining Broad Street Capital’s team during the upcoming Mission will be representatives of US, UK and Israeli companies, international law firms and professional organizations. The delegation will be led by Mr. Alexander Gordin, Managing Director of the Broad Street Capital Group and will meet with a number of federal and local Government Officials, project sponsors and company owners in Tashkent.

Uzbekistan represents a tremendous opportunity for international project development and international business cooperation,” said Alexander Gordin. “Policies implemented by President Mirziyoyev have been very effective in attracting foreign investment, supporting technology transfer and focusing on growing key areas of the Uzbekistan’s economy,” added Gordin.

About the Broad Street Capital Group

Based in the heart of New York City’s Financial District, Broad Street Capital Group (www.broadstreetcap.com) is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing in the $100 million to $1 billion range, providing political risk mitigation, export management services and cross-border market development advisory. The Firm maintains a permanent presence in Astana, Kazakhstan and Kyiv, Ukraine.  Since its founding, Broad Street Capital Group has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.

The Firm works closely with all trade and development agencies of the U.S. Government and Export Credit Agencies of several European and North American countries. Since its inception, Broad Street Capital Group has been involved in multiple high-profile cross-border transactions in IT/telecom, aerospace, health care, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $900 million and expected to exceed $1.5 billion by November 15th, 2018.

For more information contact: Rustem TursynRepresentative for Central Asia
+1 212 705 8765 ext. 707, or via email rtursyn@broadstreetcap.com

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Broad Street expands its risk mitigation services

(New York City, NY, May 2, 2018)   For Immediate Release

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Broad Street Capital Group (BSCG) proudly announces the formation of the Broad Street Risk Mitigation LTD., which will serve as the Group’s risk mitigation and insurance specialist.

Broad Street Risk Mitigation will focus on originating and placing complex Political Risk Insurance (PRI) Transactions, as well as on trade finance, export credit, freight and travel medical insurance for project teams.

In cooperation with several major law firms and government agencies, the company will also focus on development and implementation of FCPA and OFAC compliance policies for its clients.

Heading the new entity will be Mr. Paul Gregory, who has joined the Firm as its Principal and Head of Insurance Operations.  Mr. Gregory brings with him over 40 years of distinguished service in the insurance and risk management fields.  He has held multiple management and directorship positions at the internationally known companies and has been involved in complex insurance transactions in over 20 countries.  Mr. Gregory’s relationship with the Broad Street Capital Group goes back over a decade. He advised the BSCG on several export-related transactions and provided invaluable guidance on the company’s dealings in Kazakhstan and Hungary.

Concurrently, with his joining the Broad Street Risk Mitigation LTD., Mr. Gregory has also accepted an Advisory Board position at the Broad Street Capital Group

About the Broad Street Capital Group

Based in the heart of New York City’s Financial District, Broad Street Capital Group (www.broadstreetcap.com) is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing in the $100 million to $1 billion range, providing political risk mitigation, export management services and cross-border market development advisory. The Firm has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.MerchantShips

The Firm works closely with all trade and development agencies of the U.S. Government and Export Credit Agencies of several European and North American countries. Since its inception, Broad Street Capital Group has been involved in multiple high-profile cross-border transactions in IT/telecom, aerospace, healthcare, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $917 million and expected to exceed $1.5 billion by November 15th, 2018.

For more information contact Alexander Gordin, Managing Director +1 212 705 8765 ext. 701 or via email agordin@broadstreetcap.com

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Grey2White Initiative – the journey continues (parts I and II)

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(Part I of the article reprinted from the June 2017 issue)

Hypothesis:

Given Ukraine’s current economic and geopolitical situation, one of the most beneficial  steps the US government, business and NGO community can take, is to encourage significant external and internal direct investment into the country’s economy.

Although the US Government has had some success in attracting and supporting American direct investment into Ukraine, those investment amounts are far from sufficient. US investors new to the Ukrainian market are wary of the country’s reputation for corruption, difficulty in doing business, threats from Russia and lack of financing options.

A second and much more viable economic development option, would be to support and enable direct investment by the successful Ukrainian business people who have amassed sufficient capital and are much more comfortable and adept in investing in their home market.

One problem with pursuing that option are high Western standards, which often preclude US government development agencies and public US investors from working with this potential class of investors.  This is due to the fact that for the last twenty-five years, practically all business people in Ukraine had to operate under a certain set of conditions widely considered “grey” and in many cases “black” in the West.

Some of these “grey” conditions are lack of financial transparency, inadequate corporate governance, use of yellow press, use of cash, as well as offshore accounts to conduct operations, bribery and use of adverse political influence.

In their attempts to succeed, some folks in Ukraine went beyond previously acceptable business norms and crossed the proverbial line even further by engaging in criminal “black” behavior – graft, extortion, corruption, tender rigging and illicit drug trade.

To date, these grey conditions have presented significant challenges for the IFIs, development agencies and regulated financial US investors. Yet, it is vital to recognize the necessity to find an acceptable solution that allows Ukraine’s economy to reap significant benefits from the anticipated increase in direct investment and low-cost, long-term financing.

It is also very important to understand that the proposed Grey2White (G2W)™ initiative aims to broaden and scale up very important development and capacity building work already undertaken over the last quarter century by IFIs, such as IFC and EBRD, USAID; development agencies such as OPIC and USTDA and financial investment communities. Those initial efforts, although quite effective, focused on a relatively small sample of Ukrainian companies and were undertaken during a different stage of the country’s development.

Initiative

The G2W™ initiative will only work with those companies and individuals, who will be able to create meaningful economic impact in Ukraine, after undergoing the conversion process.  G2W™ will not in any way target those convicted of the “black” behavior, as their reputation gap is un-bridgeable within the scope of the project.

Thus the question becomes, is it possible for US stakeholders to create an environment and a broad platform from which so-called “grey” Ukrainian businessmen seeking to utilize US financing, equipment, services and franchises, as part of their major investment programs, become “bankable” under Western standards? If the answer is “Yes.”This type of conversion will provide hundreds of millions, if not billions of dollars in direct economic benefit and enhanced geopolitical security to Ukraine and to the US.

If the answer is “No,” these businessmen will either be forced to forgo the planned capital investments, or seek alliances with other grey, or black global actors in countries like Russia, China, Brazil, Iran, etc.

It is the fundamental belief by the creators of the proposed initiative that given a concerted effort by the US and Ukrainian stakeholders to develop and implement realistic procedures to increase corporate transparency, introduce financial standards, address any existing reputation issues head-on and provide reputable outside management and board oversight, it is possible within short to medium time-frames to bring these so called “grey” businessmen and their respective projects up to elevated western standards, mitigate investment and reputation risks and affect substantial economic growth in Ukraine.

Thus we hereby propose the following:

Select three-four financially viable projects sponsored  the “grey” Ukrainian actors and use them as a pilot to develop, refine and implement an effective conversion strategy to bring that project up to acceptable Western standards.

From the government side, we propose to involve the US Commercial Service, USTR, US Embassy, Ukrainian Embassy, Cabinet of Ministers of UA, members of the US Congress focused on UA issues, OPIC, regional Governors and local administrations in Ukraine, IFC, USTDA and the US EXIM Bank (when that Agency resumes its activities in Ukraine).

Among the NGO stakeholders we would like to see US-Ukraine Business Council (USBC), AMCHAM, Transparency International, Freedom House, Atlantic Council and US Ukraine Foundation. Additionally, reputable international law firms, audit firms, press, appropriate private individuals, corporate off-takers, financial market regulators, as well as relevant providers of US goods and services should be involved.

The framework of the proposed initiative shall be as follows:

  • Initial Sponsor/Project assessment and preliminary due diligence
  • Project selection and stakeholder awareness and involvement
  • Project G2W™ Team building (attys., directors, advisers, auditors, suppliers, investors etc.)
  • Full due diligence and implementation plan for the Western financial, FCPA and governance standards
  • Investor cultivation and underwriting of the financing package
  • Project development and implementation
  • Monitoring and compliance

To kick off the proposed initiative, we propose an intensive education and awareness-building campaign designed to simultaneously involve all the stakeholders.

After the initial buy-in into the initiative is secured, work will begin on developing the pilot projects.

During the pilot project phase, the G2W pilot project team will be seeking to achieve specific and tangible goals:

  • Fully assess the existing reputation risks, possible political influence issues, suitability for OPIC/IFC financing and Political Risk Insurance for the US project participants
  • Prepare a legal due diligence report by a world-class law firm
  • Recruit highly reputable and competent outside board members to the Project’s Board
  • Design a comprehensive PR/IR strategy to inform stakeholders of the project and its ongoing developments
  • Design and implement transparent financial audit, reporting and management accountability standards
  • Develop ways to tangibly measure economic effect of the pilot project
  • Continue to promote the initiative and seek to move it from the pilot project phase to full-blown implementation.

(to be continued)

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Part II  (April 2, 2018)

In the nine months since the above article was first published, a number of events took place, which not only validated the concept behind the Grey2White™ initiation, but also expanded its scope and attracted top notch global professionals to the program.

Although initial premise of the program to convert grey actors in Ukraine to white bankable actors, whose economic contribution will greatly outweigh any possible transgressions they may have committed up to this point remains intact, the program has been expanded to include other emerging market countries of Eastern Europe and Central Asia. The program also grew to allow so-called grey companies to unlock their value through financial and legal transformation in order and become more bankable in the Western capital and financial markets. Part of this transformation involves tools, which on one hand provide increased political protection to the current management and to foreign investors, and on the other hand allow western companies to lock up predictable valuations and to observe the transformation process first hand.

A first rate international “scrub team” has been assembled as a multidisciplinary team consisting of former US Government prosecutors, forensic accountants, legal and financial experts and last but not least, former high-level grey operator with deep expertise in shadowy government and business dealings in Ukraine and several other  post-Soviet countries.

A pilot company and its owner have been selected, as the first of four pilots companies to undergo Grey2White™ transformation in order to make them bankable by US Development Agencies for a $150 million project slated to create over 200 new jobs and to generate significant economic impact in Southern Ukraine.

In the next 60 days. key members of the G2W™ Team are expected to travel to Latvia, Kazakhstan, Azerbaijan, Uzbekistan and Ukraine to conduct additional screening and selection of the pilot companies and individuals.

In the subsequent parts of this article, we will examine the different case studies and watch the pilot candidates undergo the first steps of the Grey2White™ transformation.

(to be continued…)

 

Financing Feasibility Fund I (FI3F) – a $30 mil. Global Project Development Fund announced by the Broad Street Capital Group

(New York City, NY, February 20, 2018)   For Immediate Release

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Fresh from its recent success, as the Financial Developer of the $250 million OPIC insured capital markets financing for NAEK Energoatom of Ukraine, Broad Street Capital Group has fi3f_badgeannounced today that it will establish a $30 mil. Financing Feasibility Fund I (Fi3F™) – a global project development fund to provide feasibility grants and pre-financing development funding for qualified emerging markets’ OPIC-insured infrastructure projects to be financed in the US capital markets.

The Fund will provide qualified Governments and State-owned borrowers feasibility seed funding in the amounts between $350,000 and $1 million dollars and pre-financing bridge loans in the amount of $1.25 to $2.5 million per project.

The Fi3F™ Fund will develop and seed international projects whose financing requirements fall between $150 mil. and $1 billion, and which will span the industry segments ranging from energy, airspace, transportation to agriculture, infrastructure and healthcare. The projects should be located in credit-challenged emerging market countries, which represent priority markets under OPIC’ development finance and insurance mandate. Financing terms for the projects will be between 10 and 20 years. A strong US supply nexus and willingness of the host governments  to provide sovereign guarantees for the financing, will be key considerations during the project selection stage.

Participation in the Fi3F™ will be open to qualified private and institutional  investors, with at least 51% of all the shareholders being US nationals. The management of the fund will utilize proven project development techniques and will be administered by an experienced team consisting of leading legal, insurance and financial experts, a placement agent and the financial developer. The Fund will obtain Political Risk Insurance from OPIC to protect its funds and will retain a top tier investment bank to act the the Paying Agent to administer all the payments and disbursements. Fi3F’ returns are targeted to fall in the 12-17% range annually.

Call for the first round of Financing Feasibility Proposals will commence April 25, 2018.

About the Broad Street Capital Group

Based in the heart of New York City’s Financial District, Broad Street Capital Group (www.broadstreetcap.com) is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing in the $100 million to $1 billion range, providing political risk mitigation, export management services and cross-border market development advisory. The Firm has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.

The Firm works closely with all trade and development agencies of the U.S. Government and Export Credit Agencies of several European and North American countries. Since its inception, Broad Street Capital Group has been involved in multiple high-profile cross-border transactions in IT/telecom, aerospace, healthcare, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $417 million and expected to exceed $1.5 billion by November 15th, 2018.

This announcement is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the Company or any related or associated company. Any such offer or solicitation will be made only by means of the Company’s confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. None of the information or analyses presented are intended to form the basis for any investment decision, and no specific recommendations are intended.

For more information contact Alexander Gordin, Managing Director +1 212 705 8765 ext. 701 or via email agordin@broadstreetcap.com

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ExportBOOST Helps US Companies Double Their Exports

By: Alexander Gordin

Fi3E BadgeInternational trade is thought to have its routes in 19th century BC with Assyrian merchants. Over centuries the business of exports changed dramatically with evolution in transport modes, advent of Incoterms, standardized shipping containers and computerized customs clearance.

Yet for all the progress and record $2.3 trillion amount, exports in the US still remain a complex and not terribly efficient process. Multiple players involved in exports are still largely silo(ed). Even at large companies export related functions like international sales, legal, shipping, banking, financing and insurance often have difficulty communicating with one another. Concepts such as international payment protection mechanisms, US content policy, or US flag shipping requirements are often misunderstood. Generally business approach to managing export transactions is reactive, rather than proactive. Situation is even more difficult in small and mid-size businesses where resources are significantly more scant. A relatively small percentage of businesses export. Of those that do, a large portion exports to only one country. Expanded exports of goods and services represent amazing possibilities not only to help companies grow their profits and shareholder returns, but also to benefit our nation’s economy by creating new jobs and generating additional tax revenues. President Obama’s National Export Initiative has served as a catalyst to spur job growth and along with general economic recovery led to a resurgence of manufacturing activity. More needs to be done, and companies should focus on exports as a fundamental part of their business activities, rather than an afterthought.

The entire export ecosystem is ripe for disruption and entry into the technological age. I can envision a day in the very near future when shipping containers of foodstuffs, plane loads of licensed computer equipment, dozens of Ro Ro tractors, or construction cranes will be as simple as buying individual items on eBay or Amazon. Of course handling export transactions is infinitely more complex and requires signed multilingual contracts, letters of credit, export credit and freight insurance, licensing, quality inspections and complex shipping arrangements. Thus the disruption process that is being put in place needs to account for the nuanced complexity that characterizes exports. Step one of the transformation is already on the way.

ExportBoost™ – a  curated service guaranteed to help small and mid-size companies to at least double their present exports in 18 months – was recently unveiled

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by the Broad Street Capital Group (“BSCG”) . Specifically developed for US manufacturers and distributors with revenues of between $5 and $750 million and for providers of professional services , ExportBoost™ uses proprietary export building met

hodology and tools such as: Fi3E™ Export Indices, XPORTINSURE™, FinanceABLE™ and EZShip™ to greatly simplify export operations and mitigate international business risks.

ExportBoost™ was designed to help small and medium companies who are either experienced exporters, or just looking to start their international expansion to significantly grow their exports. ExportBoost™ service has two tiers – one where the exporter is guided by the Broad Street Capital’s professionals and implements the program internally and the second where Broad Street Capital Group implements ExportBoost™ on its client’s behalf. In either case, the clients will be offered a unique guarantee, should they follow the program and their exports do not at least double in 18 months, Broad Street Capital Group will refund all the fees paid by the clients for the ExportBoost™ service.

ExportBoost™ is part of the product portfolio being developed by the Broad Street Capital Group, and its partners. to greatly streamline and finance international trading operations. The project code named “Barbell” is scheduled to be unveiled at the Broad Street’s annual conference later this year.

Trump scrambles Ex-Im Bank politics

The politics around the Export-Import Bank just got much weirder.

President Donald Trump is reaching for a compromise in the debate raging around the bank, aiming to keep the agency open while putting an outspoken, ultra-conservative opponent of the institution at the helm.

In doing so, Trump has confused the politics around the export credit agency, which had been a major boost to American manufacturers such as Boeing, GE and Caterpillar before Republicans took steps to crimp the flow of financing.

The formerly anti-Ex-Im Trump abruptly changed his tune on the bank last week when he called it “a very good thing” and announced plans to nominate two board members. That was a major step toward bringing the agency back to its full working capacity.

Then, two days later, he nominated for the chairmanship former Rep. Scott Garrett (R-N.J.), a vocal foe of the bank who has also come under fire in the past for his comments about homosexuality. That set up a political tightrope that both supporters and detractors of the agency may have trouble navigating.

Democrats who champion the agency because they say it creates jobs and promotes manufacturing are uneasy about supporting a social conservative who might try to hamstring the bank from within. Sen. Chris Van Hollen (D-Md.), a member of the Banking Committee, which will vet the nominees, said appointing Garrett as chair would put thousands of American jobs at risk.

Then there are conservative Republicans who have been critical of the bank and are now cheering Garrett’s nomination.

“For too long, the bank has been a clear example of corporate welfare run amok — benefiting special interests and foreign companies at the expense of U.S. taxpayers,” said Sen. Pat Toomey (R-Pa.), who also sits on the Banking Committee. “I am confident that Congressman Garrett will chart a new course for the bank that puts U.S taxpayers first.”

The result is a 180-degree flip-flop, where lawmakers and interest groups who had expended significant resources and political capital to rein in the bank could shift to support Trump’s nominees, while its biggest champions could be left behind.

“We’re encouraged and optimistic that [Garrett] would be able to substantively reform the Export-Import Bank, make it work better in the meantime,” said Chrissy Harbin, vice president of external relations at the conservative advocacy group Americans for Prosperity. “And then when the reauthorization comes up again … we’d encourage D.C. to have the same conversation about the possibility of letting it expire once and for all.”

Democrats on the Banking Committee have reservations about Garrett, including Sens. Heidi Heitkamp (D-N.D.), Joe Donnelly (D-Ind.) and Catherine Cortez Masto (D-Nev.).

Cortez Masto said she was pleased that Trump was committing to making the bank functional. Still, she has concerns about Garrett, “given his past opposition to Ex-Im’s mission, not to mention his divisive rhetoric toward LGBT families.”

“This Garrett nom is a Catch-22,” one Senate Democratic aide said. “We need to confirm him to have a quorum, but he could be a cancer inside the agency.”

Last November, Garrett lost a seat he had held since being elected to Congress in 2002. A key moment in the race came in 2015, when POLITICO reported that he told fellow GOP members that he wouldn’t support the National Republican Congressional Committee because it backed gay candidates.

Financial companies that had been campaign backers during his years as a senior member of the House Financial Services Committee pulled back.

Garrett later denied that he objected to gay candidates and said his problem was with support for same-sex marriage.

He lost to a well-funded Democratic challenger, Josh Gottheimer, but stayed plugged in to the emerging Trump team. While in Congress, Garrett served with Vice President Mike Pence and is said to be close with the former Indiana congressman. He also counted White House counselor Kellyanne Conway as a constituent and campaign donor. A December meeting at Trump Tower was well-publicized.

Garrett could not be reached to comment on this story.

Beyond Congress, his nomination also puts big American manufacturers in an awkward spot. They need more board members at the bank to provide a quorum that’s necessary to approve deals with more than $10 million. Yet they are unsure what changes might be in store given Garrett’s past comments and promises from senior administration officials like White House Budget Director Mick Mulvaney to put “reformers” at the helm.

For now, major users of the bank are focusing on the fact that Trump has put forward any nominees rather than worrying about who they are.

“Generally speaking, between the president’s comments and naming of two nominees, it’s really encouraging,” said Kate Bernard, a Boeing spokeswoman. Boeing, she added, has experienced the loss or delay of three satellite sales since the bank first fell victim to political crossfire in 2015, so giving the bank back its quorum to “shake loose” projects that remain in the pipeline is the most crucial step at this point.

There’s no question, however, that the Garrett nomination “raises some eyebrows in the business community” and “sends some mixed messages given his previous history in the House,” said one bank proponent who asked not to be named.

Garrett established himself as a consistent and outspoken opponent of the bank while in Congress, twice voting against its reauthorization in the past five years. In 2014, he expressed skepticism that attempts at reform would ever be successful, and he pushed hard the following year to let the charter expire.

“We have the opportunity to save capitalism from cronyism and to fulfill a promise to the American people to work for them instead of a select few with special connections in Washington,” Garrett said in May 2015.

“For the sake of the American taxpayer and the preservation of the free enterprise system, Congress should put the Export-Import Bank out of business.”

The White House noted that history of opposition toward the bank in discussing his appointment, saying Trump chose him “to both usher in reforms and prioritize small businesses.”

“Former Rep. Scott Garrett has passionately spoken out on some of the problems that the Bank’s previous activities created,” a White House spokeswoman said in an email. “He will be a key voice for reform.”

61ae8-exim-bank1The current nominees represent only a temporary fix: Garrett and former House Financial Services Chairman Spencer Bachus (R-Ala.), who Trump picked to sit on the board of directors, would both have to be approved to restore the bank to full working capacity. What’s more, they’ll provide a quorum that will only last until July 19, when acting Vice Chairman Scott Schloegel’s term expires. At that point, the bank would lack a quorum once again if no additional members have been confirmed before then.

But in the meantime, major users of the bank fear that the administration is trying to reshape the agency in a way that would hurt large companies that have traditionally benefited from it. Various administration officials have hinted at their own ideas for reform.

Mulvaney, who was a critic of the bank while a member of Congress, told CNBC last week that Trump’s nominees would make sure the bank “sticks to its knitting.” Commerce Secretary Wilbur Ross told the network in a separate interview that he wanted a reformed bank to “help small businesses more.”

Some reforms will be put into place as soon as Garrett and Bachus — or any two nominees — are confirmed and a board with at least three members votes to approve them. The bank’s 2015 charter included a slate of changes for the bank, and while a majority have been completed, a handful require a board quorum to be implemented — something the bank has lacked since its reauthorization was passed almost a year and a half ago.

Two of the outstanding requirements involve appointing a chief ethics officer and chief risk officer. A third involves the bank’s lending to small businesses and “increases the authority of staff to approve applications for up to $25 million in export financing for small business working capital and insurance products.”

But beyond that, bank observers say there is little a chairman can do on his own to change the bank’s operations.

And while he could attempt to direct export credit assistance more often to smaller businesses, “there’s not a ton of discretion,” said Peter Cohn, an analyst with Height Securities.

“So I don’t know that we’re going to see a whole lot more than window dressing on that front,” he said.

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Dollar’s Rise Threatens Manufacturing Recovery

Greenback surges to 14-year high in wake of Trump win and Fed move, making U.S. goods more expensive abroad

 By ANDREW TANGEL and JOSH ZUMBRUN WSJ.com

An employee works on the interior of a Boeing Dreamliner 787 in North Charleston, S.C. Boeing last week cited 'fewer sales opportunities and tough competition' when it laid out plans for further layoffs. An employee works on the interior of a Boeing Dreamliner 787 in North Charleston, S.C. Boeing last week cited ‘fewer sales opportunities and tough competition’ when it laid out plans for further layoffs. PHOTO: BLOOMBERG NEWS

The U.S. currency, which has strongly appreciated over the past two years, surged to a 14-year high in the wake of Donald Trump’s election and the Federal Reserve’s decision to raise interest rates, adding a wrinkle to the president-elect’s pledge to boost factory employment.

Certainly, a strengthening dollar is a sign of rising optimism for the U.S. economy as the stock market also soars to new highs. Prospects of higher inflation and rising interest rates encourage investment in U.S. assets, reflecting growing hopes for better returns.

A strengthening dollar increases the currency’s purchasing power: If imports are cheaper, U.S. consumers would have more money to spend. That in turn could boost retail sales, a key driver of economic growth, and engender more confidence in the U.S. overall.

However, while good for U.S. consumers and companies that purchase components abroad, the dollar’s rise promises to hit U.S. manufacturers reliant on sales in overseas markets.

Many have started to dial back revenue forecasts and look for ways to cut costs. 3M Co. and United Technologies Corp. have signaled a strong dollar could make it harder to boost sales in 2017.

Manufacturing here in the U.S. has become a lot more challenging than we’d anticipated.

—Neal Keating, Kaman’s chief executive

Kaman Corp., a Bloomfield, Conn.-based maker of airplane parts, has seen its European rivals’ prices drop as the euro declined against the dollar. To compete, Kaman has invested in facilities in Germany, and acquired a company with operations in the Czech Republic.

“Manufacturing here in the U.S. has become a lot more challenging than we’d anticipated,” said Neal Keating, Kaman’s chief executive.

Some dealers of Harley-Davidson Inc. motorcycles and Caterpillar Inc.’s bulldozers and excavators are bracing for the companies’ Japanese rivals to capitalize on the yen’s weakness against the dollar to undercut them on price. Caterpillar has said the yen’s weakness makes competition harder. Harley declined to comment.

In interviews, several business leaders said Mr. Trump’s pledges to promote business would more than counter the sting of a stronger dollar, especially if there are lower taxes and lighter regulatory burdens. They are hopeful Mr. Trump’s plan to overhaul infrastructure will spark economic growth, and that higher domestic sales could make up for any decline in exports.

“There’s bigger fish to fry,” said Mike Haberman, president of Ohio-based construction-equipment maker Gradall Industries Inc., which exports about 20% of its products. “I’m not panicked about the dollar.”

Jerry Johnson, president of the farm, ranch and agriculture division of Blount International Inc., a Portland, Ore., maker of outdoor products, said the strong dollar may be offset by declining import prices. About 50% of the components used in Blount’s products—they include mowers, log splitters and rotary cutters—come from overseas, Mr. Johnson said.

The dollar has been relatively weak against most of the world’s major currencies over the past decade. This helped U.S. exports rebound swiftly following the financial crisis.

By the end of 2010, exports reached record levels and continued to grow, hitting $598 billion per quarter in 2014. Employment in manufacturing began to recover, and optimism grew the U.S. could be entering a manufacturing renaissance.

The dollar has since risen sharply against currencies such as the yen and the euro. Meanwhile, the British pound dropped in the wake of the country’s June vote to leave the European Union. Earlier this month, the U.S. Federal Reserve raised rates, and hinted at more tightening next year.

The WSJ Dollar Index, which measures the U.S. currency against 16 others, hit a 14-year-high last week.

Bond yields have been rising amid expectations of more growth and inflation during Mr. Trump’s administration. The dollar rally could undermine his agenda by making exports more expensive and imports cheaper.

Collateral Damage

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Trump transition team officials didn’t respond to a request for comment.

For some companies, a stronger dollar will likely limit interest in expanding domestic manufacturing.

China’s yuan has fallen to its lowest level against the dollar in eight years, a move that could entice manufacturers to keep factories there rather than following in the steps of those that have brought some operations back to the U.S.

Mexico’s peso is down 13% against the dollar since the election, making it more tempting to move U.S. factories south of the border, despite Mr. Trump’s vows to punish firms that shift jobs abroad.

Emerson Electric Co. last week said the stronger currency worsened the extent of its orders’ decline from September through November by 2 percentage points. Overall, they fell by 7%.

Boeing Co., the nation’s largest exporter, last week cited “fewer sales opportunities and tough competition” when it laid out plans for further layoffs at its commercial-airplane unit next year after cutting staff by 8% in 2016.

Boeing didn’t mention currency fluctuations. The strengthening dollar has helped rival Airbus Group SE, which for years wrestled with an appreciating euro. Boeing declined to comment. An Airbus spokesman said the tailwind the company gets from the dollar is muted because 40% of its plane parts are purchased from the U.S.

Many manufacturers have begun to reduce their workforces; employment in manufacturing fell by 51,000 from January 2015 through November 2016, according to Labor Department data.

Ben Herzon, senior economist at Macroeconomic Advisers, an independent economic forecasting firm, conducted a simulation for The Wall Street Journal to illustrate how a further 10% increase in the strength of the dollar would ripple through the U.S. economy.

Over the next three years, companies would gradually adjust, by among other things boosting capacity at foreign plants while reducing at home, changing their supply chain or increasing the use of automation.

If the dollar doesn’t strengthen further, inflation-adjusted gross domestic product would cumulatively rise by 6.3% over the next three years. If it strengthens by a further 10%, that growth would be 1.8 percentage points lower, or 4.5%, according to Macroeconomic Advisers’ simulation.

The pain of a further 10% dollar rise would be especially concentrated in U.S. factories. Manufacturing production would be 3.6 percentage points lower under a strong dollar, inflation-adjusted imports would be 3.6 percentage points higher, and real exports from the U.S. to the rest of the world would be 6.2 percentage points lower.

Initially, U.S. consumers would stand to benefit by paying lower prices for imported goods.

“It’s good for consumers, as long as they’re still working,” said Mr. Herzon. As time goes on, this benefit will also be offset by the job loss in the manufacturing sector, he said.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Josh Zumbrun at Josh.Zumbrun@wsj.com

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