GTR Trade Finance eNews - July 2012
Israeli ECA increases China exposure
The Israel Foreign Trade Risks Insurance Corporation (Ashra) has increased its guarantee potential by US$400mn for exports to China.
Rwanda closes road project financing
The government of Rwanda has secured US$68mn of financing from the African Development Bank (AfDB) for the construction of a road connecting the country to the Democratic Republic of Congo and Burundi.
Swift moves to the cloud
Swift has launched the latest release of its Alliance software, Alliance Lite2, designed to connect customers to the Swift network.
Indian and Japanese banks form alliance
India’s Yes Bank and Japan’s Shinsei Bank have signed an alliance to co-operate in various business areas, including trade finance.
Trafigura strikes deal with Malaysia's Steel Works
Commodities trading company Trafigura has signed a US$158mn three-year offtake agreement with Malaysia Steel Works in a move to increase its activities in the Asia Pacific region.
Russian airline receives first ECA-backed loan
Russian airline UTair Aviation has won a seven-year ECA-backed US$45mn loan from HSBC – making it the first Russian airline to receive international ECA support.
Georgia's TBC secures loan facility
Georgia’s TBC Bank has closed a seven-year €25mn loan with the European Investment Bank to provide medium and long-term loans to its clients in the energy and environmental sectors.
Southern African electric project attracts multilaterals
Five investors have expressed interest in financing a project to build an electricity transmission interconnector between Zimbabwe, Zambia, Botswana and Namibia.
The potential lenders include the African Development Bank (AfDB) for up to 40% of the debt requirements, the Development Bank of Southern Africa (DBSA) for US$50mn, the European Investment Bank (EIB), the French Development Agency (AFD) for US$30-50mn, and Stanbic Botswana, a local division of Standard Bank.
The project was presented to them by the Southern African Development Community (SADC) at an investors roundtable held in Swakopmund, Namibia, on July 12, 2012, and the financing arrangements have yet to be formalised, with financial closure expected by December 2013.
The total cost of the interconnector is US$223mn, including US$156mn in debt with a 15-year tenor, and the remaining US$67mn in equity. According to Odala Matupa, programme officer, power at SADC, fundraising is not expected to be a challenge, but the project is taking a long time due to the complexity of the multi-country arrangement.
Lawrence Musaba, co-ordination centre manager at the Southern African Power Pool, adds that other challenges are slowing the process, including the weak balance sheets of the project sponsors, delays in signing key commercial agreements such as wheeling and power purchase agreements, and delays in coming to agreement on the implementing structure.
Upon completion, expected in January 2016, the transmission will 300MW transfer capacity (expandable to 600MW), increasing energy trade between the four countries and easing congestion on the north-south corridor between Zimbabwe and South Africa.
ITFC talks over TF solutions with Malaysian banks
The International Islamic Trade Finance Corporation is in talks with three local banks to provide trade finance solutions for Malaysian entrepreneurs in the emerging markets.
Enerjisa gets financing for milestone power project
Turkish electrical company Enerjisa has signed a €750mn credit agreement with 11 international banks to finance the Tufanbeyli thermal power plant in Turkey’s Adana region.
Reinsurer launches green energy risk guide
US reinsurance company Energi has released a ‘Risk mitigation reference guide for new energy financing’ to help banks manage the risks involved in funding green energy projects.
AFC and PTA renew trade finance agreement
The African Finance Corporation (AFC) has renewed a US$25mn trade finance credit line to the Eastern and Southern Trade Development Bank (PTA Bank).
US banks pull out of eurozone risk
US banks are continuing to reduce their exposure to most of the eurozone countries, according to data from the Federal Financial Institutions Examination Council.
Africa's continental FTA under way
Government representatives at the African Union Summit have pledged to establish a free-trade agreement (FTA) for continental Africa by 2017, aiming to boost the continent’s economy through internal trade.
Ex-RBS Bugeja sets up consultancy firm
John Bugeja has left his role as global head, trade products at RBS, based in London, and set up his own consultancy firm.
AngloGold signs oversubscribed facility
South Africa-based AngloGold Ashanti has received a US$1bn, five-year revolving credit facility (RCF) maturing in July 2017.
Angola LNG exports face further delays
Angola LNG’s first exports, originally due to be shipped in Q1 this year, are being held up as construction of the project has yet to be completed.
GTR has learnt from market sources that it is unlikely that any LNG from the project, based in Soyo in northern Angola, will be shipped before the end of this year.
US Exim grants sovereign loan to Sri Lanka
The Export-Import Bank of the United States (US Exim) has extended a US$64.9mn, 12-year loan to the government of Sri Lanka; its first sovereign transaction in four years.
Tajikistan wins energy loan from ITFC
The International Islamic Trade Finance Corporation has signed a US$40mn financing agreement with Tajikistan for the imports of gasoline and diesel.
Credit Europe Bank gets new FI manager
Alper Nalbant has left Aktif Bank to join Credit Europe Bank as manager of financial institutions.
SCB pre-funds Sonangol loan
Standard Chartered has closed and pre-funded a US$1.5bn loan for the state-owned Angolan oil producer Sonangol, according to market sources.
Mexican drillship project gets international support
Mexican oil and gas company Grupo R has sealed a US$518m loan from 11 international banks to finance the construction of one of the biggest Korean-built drillships in the world.
Stern leaves Credit Agricole
Ian Stern, executive director and deputy head for Sub-Saharan Africa, structured finance at Crédit Agricole has left the bank.
ATI gets AfDB support
The African Trade Insurance Agency (ATI) has received a US$15mn equity investment from the African Development Bank (AfDB), boosting its underwriting capital.
EKF resumes cover for Libya, suspends it for Iran
Denmark’s export credit agency, Eksport Kredit Fonden (EKF), has resumed short-term cover for Libya, in an effort to encourage trade with the troubled country.
EKF CEO Anette Eberhard tells GTR that the decision came from a rise in demand for trade financing in Libya. “We have had a slight increase in the number of requests on Libya, and that caused us to increase our cover policy. The increasing stabilisation in the security situation, and the fact that Libya is now able to produce and sell as much oil and gas as before the conflict, has made us comfortable in deciding to open up on Libya with due caution,” she says.
However, she points out that banks are still reluctant to give loans for exports to the country, and that there is a long way to go before prospects open up for Danish exporters in Libya.
She adds: “Just like us, Danish companies are very patiently looking into the situation and hoping for improvement, but in the longer term we think that there will be good export prospects for Danish companies within the construction and oil and gas sectors, and of course medicine and food.
“Medium and long-term cover could resume as well, but not in the short run. Based on history and similar situations in other countries, we have to be patient for the local parliament to work and gradually improve not only the security situation, but also the economic and financial situation.”
Eberhard sees this mostly as an encouragement for Danish exporters to support development in Libya, and confirms that other European export credit agencies (ECAs) are also in the process of resuming cover for the country.
Meanwhile, EKF has suspended all guarantees for transactions with Iran, following the country’s exclusion from the global Swift system, which makes it “practically impossible to get money out of Iran”, according to the ECA’s CEO.
“If you go back quite a number of years ago, we had substantial exposure in Iran, but during the past three or four years we have gradually closed down our cover, due to the continuous conflict between Iran and the UN, EU and so on.
“We hope that the situation will be eased as soon as possible, but based on the past three or four years I can’t say when the suspension will be lifted,” Eberhard tells GTR.
EKF has also increased its premium for risk cover in Jamaica after the country got downgraded from a 6 to a 7 risk classification by the OECD, but Eberhard does not expect the ECA’s Jamaican cover policy to change any time soon.
Read more:
ECDG heads back into Libya
HSBC reopens in Libya
Clyde & Co ventures into Libya
Banque Commerciale du Rwanda gets international investors
Emerging market private equity firm Actis has sold its interest in Banque Commerciale du Rwanda (BCR), in an effort to broaden BCR’s international reach.
US Exim backs satellite export deals
US Exim has approved US$1.2bn in loans to finance the export of American-made telecommunications satellites to Mexico and Australia.
Demand for supply chain finance soars
The volume of suppliers on PrimeRevenue’s OpenSCi platform has increased by 29% from the beginning of the year.
Italy signs World Cup construction deal in Russia
VTB Bank has received a €500mn export financing package for the development of an infrastructure complex by Italian construction firm De Eccher, ahead of the 2018 World Cup in Russia.
Gunvor launches syndication for Belgian refinery
Oil trader Gunvor has launched a US$500mn borrowing base secured revolving credit facility to purchase crude oil and feedstock for the group’s newly-acquired refinery in Belgium.
ING and Rabobank are the two bookrunning mandated lead arrangers on the facility.
Gunvor acquired the Antwerp-based refinery, previously the Independent Belgian Refinery (IBR), in May this year. The acquisition was a part of the firm’s strategy to diversify from being a pure trading operation, Gunvor says in a statement.
The refinery has a processing capability of more than 100,000 barrels of oil a day, and storage capacity of more than 1.2 million cubic metres.
Gunvor was last in the market with a US$635mn oversubscribed syndicated revolving credit facility with 28 international and local banks in June this year.
The group also signed an oversubscribed US$635mn syndicated revolving credit facility in April this year, which drew new support from local banks in the Asia Pacific region.
StanChart closes ECA-backed Airbus deal
Standard Chartered has provided a multi-million dollar loan, backed by export credit agencies, to Air Arabia for the purchase of two Airbus aircraft.
Panama wins key infrastructure investment
Panama has secured a US$250mn Miga-backed loan from three international banks to construct a metro system as a solution to the city’s urban transportation issues.
BPL opens Singapore branch
Political risk insurance broker Berry Palmer & Lyle (BPL Global) has opened a subsidiary in Singapore, which will be headed by the firm’s co-founder, Anthony Palmer.
SUEK secures ECA-backed loan
Russia’s largest coal producer Siberian Coal Energy Company has secured a six-year ECA-backed US$200mn loan from Citibank and Sumitomo.
Indian solar projects get US boost
US Exim is providing two Indian energy companies with US$57.3mn in loans to finance exports of American solar panels and services to India.
StanChart appoints transaction banking head
Standard Chartered has hired Richard Jaggard as head of transaction banking for Europe.
UK gives boost to export finance
The UK government has launched a £5bn export refinancing facility to provide long-term loans to buyers of British products.
The country’s export credit agency, UK Export Finance (UKEF), says it will work closely with banks and exporters over the coming months to agree the detailed mechanics of the facility, which is expected to be operational by the end of 2012.
VTB names infrastructure and transport global head
VTB Capital has appointed Peter Stonor as global head of infrastructure and transport.
Cheniere upsizes Sabine LNG project loan
Houston-based energy company Cheniere Energy has upsized its credit facility for the Sabine Pass LNG project to US$3.4bn, after withdrawing its previous syndication of US$1.25bn.
Canada's trade deficit continues to climb
Canada's trade deficit has increased for the second consecutive month to C$793mn from C$623mn in April – its worst deficit in 11 months, EDC reports.
Indonesia power deal reaches close
Wampu Electric Power has received US$130mn loan backed by Korea Eximbank for the construction of a hydroelectric power plant in Indonesia.
Ghana power plant gets project financing
Takoradi International Company has secured US$330mn in project financing for the 110MW expansion of its gas-fired power plant in Ghana.
The Netherlands Development Finance Company acted as mandated lead arranger on a 15-year, US$212mn syndicated loan split between FMO itself, Proparco, ICF Debt Pool, DEG, the Emerging Africa Infrastructure Fund and the African Development Bank.
ADB offers Rmb and Re trade financing
The Asian Development Bank (ADB) has decided to include the renmibi and the Indian rupee in its trade finance progamme to fill a liquidity gap.
UK Export Finance resumes cover for Burma
UK Export Finance is resuming its short-term cover for British exports to Burma for the first time in over 20 years.
The UK’s export credit agency (ECA) is re-opening its short-term insurance cover for Burma due to the country’s historic changes over the last few months, which resulted in the partial suspension of EU sanctions.
The ECA, which went off cover for Burma in the late 1980s, says that each application will be considered on a case-by-case basis.
This announcement comes as Lord Marland, chairman of UKTI’s business ambassadors' group is in Burma.
UK Export Finance chief executive Patrick Crawford says: “Trade is going to play an important role in Burma’s transition to democracy and I am delighted that British companies are already looking at the opportunities at this exciting time. Our short-term insurance cover should help British exporters who are worried about the risks of non-payment.”
UK Export Finance is taking the lead as the first European ECA to resume cover for Burma. A spokesperson for Italy’s ECA Sace tells GTR that it has not yet reviewed its terms of cover but that it is “closely monitoring the evolution of the country”.
Germany’s Euler Hermes is also holding back, telling GTR that it has no current plans to resume trade finance insurance for transactions in Burma. However, a spokesperson for Euler Hermes explains that the development in Myanmar is carefully being monitored.
IFC grants second Vietnam SME loan
The International Finance Corporation (IFC) has granted a US$10mn loan to Vietnam’s Orient Commercial Joint Stock Bank to increase US dollar financing for small exporters.
Banks turn to credit insurance in Asia
European banks are increasingly using structured credit insurance to finance Asian deals as a way of deleveraging their trade finance portfolios.
Number of TF deals plummets
The number of completed long-term trade finance deals in the first half of the year was just 18, compared with 102 in the same period last year.
Turkish wind farm gets German backing
Turkish group Alto Holding has signed a US$164.5mn project financing with LLBW and KfW Ipex-Bank for the construction of a wind farm near Izmir, Turkey.
Intralinks and Misys launch syndicated loan product
Business solutions provider Intralinks and software provider Misys have partnered to offer syndicated loan solutions to the trade finance market.
Grimaldi strikes Sace-backed deal
Italian logistics company Grimaldi Group has agreed a €30mn Sace-guaranteed loan with European Investment Bank to purchase a cargo ship.
Clyde & Co ventures into Libya
Law firm Clyde & Co is set to open an office in Tripoli in August.
Mecca-Medina railway secures Spanish financing
A project to build a high-speed railway linking the Muslim religious sites of Mecca and Medina has secured SAR3.4bn-worth (US$800mn) of financing from a Spanish-led syndicate of banks.
The financing was secured as Spanish borrowing costs hit new heights and the country’s credit profile continues to deteriorate.
Emirates NBD Bank appoints TF manager
Emirates NBD Bank has appointed Jonathan Hollick as trade finance marketing manager in its wholesale banking division in London.
China banks win Singapore licences
Singapore's Ministry of Trade and Industry is set to grant full banking licenses to two Chinese banks.
Exclusive: Pricey Cocobod launched to syndication
Ghana Cocobod’s 20th annual pre-export facility has been launched to general syndication. The deal is fully underwritten at US$1.5bn.
XL adds to German underwriting team
XL Insurance has strengthened its middle market underwriting team in Germany with the appointment of two senior underwriters.
East African LNG potential continues to appeal
Investor interest in East Africa’s gas reserves is increasing as the region further secures itself as a potential new supplier of liquefied natural gas.
Rosneft is back in the syndication market
Russia's largest oil producer Rosneft is once again tapping the syndicated loan market for a US$1bn loan, according to bankers close to the deal.
Gabonese palm oil project gets off the ground
Ecobank is arranging US$300mn of financing for Olam Palm Gabon to create a 50,000 hectare palm oil plantation and refinery in Gabon. Once at full capacity, the project will make Gabon one of the largest palm oil producers in Middle Africa.
The project will be officially inaugurated at a ceremony in Libreville on July 12.
Lockton Asia hires regional director
Samuel Fong has joined insurance broker Lockton Asia as regional director for credit and surety.
Equinox names non exec director
Specialist trade credit insurer Equinox Global has appointed Adrian Lewers as a non-executive director.
Peru's Central Bank cuts deposit requirements
Peru’s Central Bank has cut its US dollar deposit requirement for trade finance to 20% from 65%, in an attempt to boost the country’s exports.
The Central Bank’s announcement comes as Peru’s Ministry of Foreign Trade and Tourism (MINCETUR) reported a 16% drop in May’s export figures compared to the same month last year. May’s export figures totalled US$3.369mn.
May’s traditional exports contracted by 23%, as a result of the falling international prices of Peru’s major export commodities, MINCETUR says, which except in the case of gold and fishmeal, have recorded contractions between 11% and 29% compared to May 2011.
The Central Bank’s new rule, which was announced at the beginning of July, hopes to help increase the volume of Peru’s trade and will give exporters and importers better access to US dollar trade finance funding at a more competitive rate.
Antonio Alves, IFC’s principal and head of finance for the Americas, tells GTR that having more flexible and less stringent restrictions on borrowing funds from corresponding banks will enable local banks to offer trade finance loans to Peruvian export and import companies at more appealing terms.
“Two of the issuing banks in the IFC global trade finance programme have already contacted us stating that the demand for our support in Peru will increase considerably in the short term.”
In order to grow its exports, it is expected that local Peruvian banks will look for other competitive sources of US dollar funding.
Alves adds: “The local banks in Peru that are part of our global trade finance programme are trying to diversify their network of correspondent banks with new lenders, more specifically the Asian banks.”
Trade between Peru and China is expected to reach US$15.9bn by the end of this year, Juan Carlos Rios, head of the representative office of Interbank in Shanghai says.
Exiar signs MOU for aircraft exports
Aerospace manufacturer IRKUT Corporation and Russia’s ECA Exiar have signed a memorandum of cooperation to launch a credit insurance programme for aircraft exports.
Cote d'Ivoire toll bridge gets international support
Project company Socoprim has received a syndicated loan partly backed by the Multilateral Investment Guarantee Agency for the constructon of a toll bridge in Côte d’Ivoire.
DBS names head of FI sales
Gina Lim has been appointed as head of sales for financial institutions, global transaction services (GTS), at DBS Bank.
TNK-BP taps syndicated loan market
Russian oil company TNK-BP is tapping the syndicated loan market for a US$500mn loan to finance general corporate purposes, a source close to the deal confirms.
Sace reshuffles global heads
Sace has made a number of appointments to its Italy, Asia Pacific and Sub-Saharan Africa offices.
ING steps up to support critical commodities
ING and the International Finance Corporation have launched a US$500mn commodity finance facility to reduce the risk of food and energy shortages in the emerging markets.
Deutsche appoints Thailand head
Deutsche Bank has named Vikas Arora as head of its global transaction banking and head of trade finance and cash management for corporates in Thailand.
Zimbabwe controversy compromises trade finance access
The failure by Zimbabwean bank Interfin to disburse funds that were meant to be used under the Zimbabwe Economic Trade Revival Facility (ZETREF) could compromise the country’s relationship with international development banks.
Zimbabwe’s ministry of finance announced this week that Interfin’s illiquidity has undermined the performance of ZETREF, a US$70mn facility jointly funded by the government of Zimbabwe and the African Export Import Bank (Afreximbank).
Brazil reveals 'disappointing' export figures
Brazil posted its worst trade surplus in 10 years, while the country’s monthly exports have also suffered, the Brazil trade ministry reported on Monday.
Econet Wireless closes syndicated deal
Mauritius company Econet Wireless has closed a US$362mn syndicated loan to expand its operations in Zimbabwe and Burundi.
Euler Hermes launches XoL cover
Euler Hermes will make Excess of Loss cover available from mid-September 2012, with a new specialist underwriting team based in London.
China and Brazil ink bilateral pact
China and Brazil have signed a Rmb190bn (US$29.9bn) currency swap agreement to achieve a stronger bilateral trade cooperation between the two countries.
Atradius Ireland hires head of risk
Atradius has hired Tony Gordon as its new head of risk in Ireland. He will lead the team responsible for managing the trade credit risks of Irish businesses.
NBAD opens Malaysia subsidiary
The National Bank of Abu Dhabi has opened its new subsidiary, National Bank of Abu Dhabi Malaysia Berhad in Kuala Lumpur.
Campaigners question CDB standards
The China Development Bank’s (CDB) environmental and social standards are being questioned in a report that points to several harmful projects in the bank’s portfolio.
UPS agrees export facility with US manufacturer
A subsidiary of courier service UPS is financing a US$750,000 export working capital line of credit to US-based manufacturer Master WorkHolding.
WestLB says farewell
German lender WestLB has finally been broken up after years of continued government bail-outs.
Italy supports SME exports
Sace and Italy’s Banca Popolare dell’ Emilia Romagna (BPER) have signed a €100mn short-term financing agreement to meet the working capital needs of small Italian exporters.
Heritage Oil secures Niger Delta acquisition
Independent oil and gas exploration firm Heritage Oil is buying a 45% stake of an onshore oil producing block within the Niger Delta for US$850mn.
Heritage has joined forces with a Nigerian partner Shoreline Power to complete the deal. The acquisition includes eight producing fields, infrastructure and a section of the Trans Forcados pipeline.
Australian team moves to Clyde & Co
A team of insurance specialists from Australian law firm Allens are set to join Clyde & Co’s new offices in Sydney and Perth.
OECD signs greener export credit rules
Members of the Organisation for Economic Co-operation and Development have approved a set of rules aiming to improve the environmental framework surrounding export credit.
Two agreements have been signed, including an updated version of the OECD’s 2007 recommendation on environmental and social provisions for the export of capital goods and services qualifying for official export credits; and “financially prudent” incentives for the financing of large projects that help mitigate climate change.
Participating countries may now support export projects credits with up to a 15 or 18-year repayment term, and use flexible repayment structures for long-lived projects. Several advanced technologies have been added to the list of projects with 18-year repayments, including carbon capture and storage, fuel substitution (waste to energy projects, hybrid power plants) and projects that promote energy efficiency.
In the past three years, only renewable energy projects were eligible for long-term financing.
“The terms and conditions for each project will have to meet several environmental standards and be financially justifiable. This agreement will be reviewed regularly to ensure that future technologies will be included within the scope of the Sector Understanding on Export Credits,” says the OECD.
The new recommendation results from negotiations and consultations with relevant stakeholders, such as non governmental organisations, business and banking groups, labour unions, and other international organizations, with UN secretary general’s special representative on business and human rights John Ruggie also providing input.
Equinox Global expands London team
Specialist trade credit insurer Equinox Global has appointed Melissa Mouldey as an underwriter and Kendall Edwards in an operations role.
Fifth Third Bank offers new SME loans
Fifth Third Bank is offering four additional loan products under the US Small Business Administration programme to help its customers extend their credit and financing options.
ICICI gets Japanese export loan
India’s ICICI Bank has received a US$50mn export loan from the Japan Bank for International Co-operation (JBIC) and other Japanese financial institutions.
StanChart and UniCredit close Philippines steel deal
Standard Chartered and UniCredit have signed a US$50mn loan backed by ECAs for Asian steel company New Carcar Manufacturing.
IFC to boost liquidity for Mexican SMEs
Mexican technology provider e Factor Network (EFN) has joined the IFC’s global trade supplier finance programme to support its customers' cash flow needs.
Miga backs Pakistan hydropower plant
The Multilateral Investment Guarantee Agency (Miga) is insuring a US$148.5mn equity investment made by Korean company Star Hydro Power for the construction of a hydro-electric plant in Pakistan.
ITFC signs loan agreement with Egypt
Egypt is set to receive a US$1bn loan from the International Islamic Trade Finance Corporation to finance the country’s petroleum and food imports.
