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Soci&eaute;té Générale Corporate & Investment Banking is mandated lead arranger and agent for the €
87mn Euler Hermes-covered buyer credit for Incheon International Airport, South Korea.

As part of its expansion to become the North-Asian air transportation hub, Incheon International Airport Corp (IIAC) once more signed a contract with Siemens for the supply of a state-of-the-art baggage handling system from Germany.

A buyer credit was the only financing alternative offering a door-to-door tenor beyond 10 years (including 8.5 years repayment) and a drawing profile that mirrored the complex payment terms under the commercial contract.

In addition, Euler Hermes, the German export credit agency, on the basis of IIAC’s strong business plan and IIAC’s special status in Korea, decided to grant the minimum premium allowed for this type of financing.

Soci&eaute;té Générale was supported by Siemens Financial Services (SFS) at the bidding stage and later received a formal mandate from IIAC for having provided the most competitive financing terms. Apart from that, both Soci&eaute;té Générale and SFS assisted IIAC in obtaining the most favourable terms of support from Euler Hermes.

Soci&eaute;té Générale also proposed innovative hedging solutions for IIAC to cover its euro exposure, such hedging still being under discussion.
This transaction is the first ECA financing for IIAC. It is also the first ECA-supported financing for a Korean public entity since 1998, clearly demonstrating that a tailor-made and properly structured export financing can bring added value even to prime borrowers in developed countries.