It’s been impossible to keep the number of winners of Best Deals of 2006 awards to a minimum this time around, writes Rupert Sayer. With the market like it is at present, what do you expect
This year we were swamped with nominations for our ‘Best Deals of 2006″ awards – far more than usual. The process of elimination and selection has been the hardest yet. So much so that we have increased the number of winning deals from a steady two-year limit of 20 to 37 this year.
The increased number of deals reflects the state of the trade, commodity and export finance markets in general – times are frenetic, with liquidity at an all-time high and, as the cliché puts it ‘too many players chasing too few deals’.
- Russia makes a comeback this year, having missed out last year in the awards, with eight winners this time around. NeighbouringKazakhstan has provided a couple more winners this year, while a new face from this region of the former Soviet Union includesArmenia.
The former Yugoslav state of Montenegro is another debutante; Société Générale structured the first export credit agency (ECA)-backed deal for the country after it achieved its independence fromSerbia only weeks before.
Other newcomers arePeru,Afghanistan,Yemen,Zambia,South Africa,Ghana,Bangladesh andHaiti. Few lenders, sponsors or exporters would admit to putting many of these countries on their radar screens. The fact that deals have been done in these countries – Haiti, Afghanistan, Yemen and Bangladesh especially – are testament to good structuring, sound and experienced teams, excellent networks, and of course undying faith in the market and the deal.
Whereas last year China missed out directly on any Best Deals, the country was of course pulling the strings of many other deals in different countries, such has its control and influence over global commodity flows been.
For this year’s Best Deals, two transactions are inChina itself – a US$20mn innovative structured deal for Sinochem, and a multi-tranche pre-delivery financing for Shanghai Milan that later converts into a warehousing facility – both arranged by Standard Chartered.
Two other deals that make the winners’s board also involve Chinese sourcing and backing. These are the US$1bn loan for China Oil & Gas Fund inKazakhstan, which is the largest deal to date involving Sinosure insurance, and the US$1.4bn greenfield limited recourse financing (the first ever forAngola) for Sonangol Sinopec International (SSI). The perception ofChina’s deep involvement in Angolan, and elsewhere in the continent, oil is well-documented. This deal firmly cements the reality of this trend.
More Latin flavour
Latin America has made a comeback, with deals fromArgentina,Brazil andPeru. The US$546mn multi-tranche facility forArgentina’s Aluar Aluminio proves that the country has moved on from the 2001 crisis. Problems – and concerns – remain, but so does much hope.
Two deals hail fromBrazil and one fromPeru. The Peruvian winner – a BBVA-arranged loan to support broadcasting equipment exports for local broadcaster IRTP, via the ministry of economy and finance – witnesses the first time that an official soft loan fromFrance has been awarded to a non-French bank.
The US$1.2bn dual-tranche facility forBrazil’s Votorantrade/VCP Overseas was the biggest syndicated loan to date in the country, with the longest tenor – up to eight years.
The other winning deal fromBrazil is a US$22mn structured pre-export facility for trading company Coimex. What sets this deal apart is the fact that the leading arranger of the deal was a trade finance fund, Rosemount.
Telecoms and metals win most
As far as sectors, telecoms has been the clear winner for last year, with commodity-based deals, metals especially, close behind.
BNP Paribas arranged a €22mn six-year facility forArmenia’s Armentel, covered byBelgium’s ONDD, which is a landmark for the country.
Citibank’s arrangement of a total of US$134mn over two separate loans for Caribbean operator Digicel inHaiti is a real eye-opener, considering the country’s reputation and risk.
Algeria, a regular winner in the Best Deals category over the years, has supplied another front runner with the US$327mn mixed currency facility for Orascom Telecom – involving the biggest ever clean risk syndicated in the country.
Afghanistan likewise supplied a telecoms winner in the guise of a multisourced US$65mn deal for Roshan, led by Standard Bank Plc. If you are looking for eye-openers then this is top of the list.
Pakistan returns to the top table this time around with its US$500mn buyer credit facility for Warid Telecom, covered bySweden’s EKN. The deal is EKN’s biggest ever in the Middle East or Asia and is the biggest ECA-backed transaction inPakistan since 1998.
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