Chairman’s opening remarks
Lunch
Sponsored by Sullivan & Worcester
Navigating the storm: Keeping the commodities business on track in times of political upheaval
Cocktail
PXF vs. clean lending vs. the bond market – we examine all three, look at the trends in each, and our panel gives expectation for the year ahead. We will look at pricing, availability and demand for each area, as well as examining corporate attitudes
The Rosneft jumbo syndication was the latest example of the large amounts of liquidity available to the ‘right’ borrowers. Liquidity rich producers are using their position to acquire smaller companies with less access to finance.
But is a consolidated list of borrowers good for commodity finance?The numbers might be higher, but larger borrowers are also able to look at clean lending or the bond market. Will commodity finance solutions be in such high demand?
Is the bond market the most prescient threat to medium-term commodity finance?Big players are increasingly able to get large financing and very low prices. However, at the same time, banks are becoming increasingly conservative in their attitude to risk and non-core borrowers.
Is this polarization something new, or a natural part of the cycle? How long will funding be as big a challenge for smaller players, and what options are open to them?
How low can pricing become on the larger deals? Is there a point when it is no longer worth lending? Is there a point where pricing is no longer reflective of risk and when will we reach this point?
Assembling and using RCFs - are such facilities good for all parties involved Diversifying finance into non-traditional sources
How has the array of solutions open to traders changed over the years, and will such diversity always be the case?
What are the changes since the crisis? Where are the new territories and expansions that have developed? What will be the most important trends going forward and how will this impact what is financed, and crucially, by who?
Uneven global recovery: West vs The Rest?
Impact of tapering across financial markets
Emerging markets turbulence: a blip or perfect storm? How to stay on top?
From aluminum to zinc - what are commodities prices doing? How can we identify regional spreads? What does this mean for the industry?
Hot spots, terrorism, global risk, growth economies and where borrowers and financiers sit within all this.
When will economic growth lead commodity producers into a higher level of investment again? When will this manifest itself in terms of demand for finance?
How do banks sell commodity finance solutions, and what makes borrowers want to use them?
Is it still a market share play for some institutions? Should it be about profit, or how commodity finance can be a gateway into other products?
Is commodity finance just an extension of corporate finance?
Is the tail now wagging the dog and can certain borrowers continue to drive the deal? Is the cross-sell power of commodity finance as strong as ever?
The attitude of different banks to risks in commodity finance can fluctuate on a deal by deal basis. What might work one day does not then get through the next. Credit committees can be the bane of the commodity banker’s life.
We look to the other side of the equation. This session will examine how risks in commodity finance can have a far-reaching impact across the rest of the bank. What are the risks that credit officers see and how can the commodity finance industry work with credit officers to ensure the right deals get done, and warning signals are adhered to and dealt with early in the process
Is price reflective of risk? Are the true risks of unsecured lending been fully taken into account by all parties? How should this be assessed?
Are some traders becoming too strong in terms of the rates and package they are able to negotiate?
Is there a danger of a herd mentality amongst some banks on certain larger transactions? What lessons can be learned from the recent past?
Do we need a new set of guidelines on the appropriate ways to use and manage an RCF?
Is there too much unsecured lending directed towards traders and are all parties pricing risk in the right way?
The list of regulatory challenges facing commodity bankers continues to grow:
Sanctions, anti-money laundering, terrorist financing, KYC, KYCC…
This practical session will examine recent and proposed regulations to trade and advise on what banks can do practically and in terms of structuring their deals to assuage the concerns that the regulators have in this market
Following increased scrutiny from regulators, what impact will various initiatives have on pricing and the trade product in general. How will Return on RWA, Return on Assets and the Supplemental Leverage ration impact provision? What will be the response of the business?
This talk will focus less on the detail, but more on the practical implications
The constraints that aspects of Basel III will place on the trade finance sector have been communicated strongly by financiers for some time. But what are the thoughts and response of the wider industry? Are traders and producers genuinely concerned by the impact Basel III will have on bank capacity to lend? Are they comfortable with the idea of an increase in a cost of finance?
Insurance has taken an inflated role in commodity finance post-crisis. With political flashpoints new and old coming to the fore in 2014, the need for cover is likely to persist.
Where are the areas most susceptible to political risk? What is the capacity of the insurance sector? What allows high levels of risk appetite to persist? And what are the pricing trends for such policies? Has insurance cover become an alternative to syndication and distribution?
A pre-drinks Idea lab: Tall tales, yarns and problems solved from the commodity finance back catalog. Whenever TXF speak to ’seasoned’ commodity finance professionals, we are always surprised and never fail to be entertained and engaged by the stories we are told. Many describe challenging situations, warzones, crooked counterparties, significant historical points in time and successes against the odds.
We will highlight groundbreaking successes and look at what can be done when it all goes wrong.
An intimate session telling some of these stories of deals gone by will be fun, engaging and genuinely educational
Coffee break
Everybody
Lunch
Everybody
CLOSE OF CONFERENCE
All participants receive delegate list and Special Report
From traditional syndication to new structures and new liquidity. Tactics from borrowers and traders on how to manage their networks and what impact this has on pricing.
Are there new players entering the sector? Is there the same need to syndicate in 2014 as there has been for the past few years? Why has distribution become more challenging for some, but has led to rock bottom pricing for others? How have the strategies of book runners changed and how does this continue to develop?
How has the increase in desire for banks to get trade debt off their books altered the approach of book runners, banks and borrowers?We examine some of the key commodity finance jumbo-syndications of the past decade and look at the borrowing trends that can be seen. Are deals like Sonangol and Cocobod a thing of the past, or will the things that worked for borrowers and banks on those deals manifest themselves in some other way going forward? Has the game changed? How have activities in the wider bonds and loans market had an impact?
Are capital markets solutions the real deal? Are investors interested in long-term assets and higher yield, really interested in embracing the trade asset class (and all the work that entails)?
Are trade assets liquid enough? Is pooling the answer to this and if so, what does it mean for risk distribution? Who is interested in the paper?
With banks focusing on larger deals, are funds and boutiques more important than ever? Will they ever do more than fill the gap on smaller deals or is there a wider market? What is holding this market back?
What difference will the less complex regulatory environment funds face compared to banks make in the longer term?
What are some of the trends in terms of the financing tools boutiques and funds are able to offer?
How have smaller boutiques managed to take advantage of a more favourable regulatory environment?
What are the biggest environmental challenges facing producers and traders at this time? How can companies combat environmental problems in a financially plausible manner? How can companies invest in long-term infrastructure? How do they produce a sustainable supply chain?
Identifying what sustainability means in this context
Achieving longevity and diversity of financing and refinancing supply
How finance elements can be wrapped up together to provide clients with more sustainable and diversified financing package
Which clients are demanding it?
What can borrowers do to work towards achieving a move sustainable financing arrangement?
Examining the natural resource strategies of China, South Korea, Japan and others in the energy arena
Comparing the approach taken by others for different sectors.
Identifying and operating with strategic minerals
Working across the entire supply chain
Assessing the logistical viability of deals
Investing in infrastructure over the long term
How to integrate new projects and resources into world trade
Having the right off taker for the right long-term job
Examining the work and progress of the IFC Critical commodities fund
How has it opened new doors for the private sector, and how does working this area differ? Are critical commodities still as susceptible to the same volatility in pricing?
Delivering essential commodities to the countries that need it most
Partnering with development banks to operate in local currency
Working with trading companies and producers to access new areas
Moving from small deals to more significant transactions – what is the process?
What are the trends and is this leading to a more sustainable supply chain for traders? How important is security of supply, and how achievable?
Managing efficiently across the supply chain
Case study: Purchasing by traders of non-efficient refineries in Europe
Could a similar trend exist elsewhere?
How traders are using a wider array of financing tools, particularly in terms of financing their infrastructure and trade logistics needs.
What role can exist for ECAs and have they needed to show more flexibility in order to work with traders?
How have project finance structures been utlised?
What types of projects have required finance of this type?
Using tried and tested structures to develop new industries in emerging Islamic countries from Central Asia to Sub-Saharan Africa – including case studies on how development banks and regional players have enhanced liquidity and developed new niches
Case studies will focus on multiple regions, sectors (base, softs, energy) and structures
A handful of banks are active in softs, whilst many others would like to be were it not for internal barriers. The big deals are attracting plenty of interest, but is internal scaremongering preventing more banks from taking part in potentially lucrative transactions?
How is risk managed on a softs transaction? Are bank risk appetites likely to increase, and what happens if they don’t? What is the best way for banks to handle a softs deal internally?
Who is looking to import natural resources from Africa and how are they looking to do it? What impact will changing trends in African trade flows have on commodity finance needs, global commodities pricing and the access to finance of African borrowers?
What is the present financing landscape for Ukrainian producers and how can a flight from the country be prevented?
As commodity finance in Europe transitions, traditional products in Asia have seemingly gone from strength to strength. Is growth still taking place in this area, and what explains this? Has Asia now officially become the most significant region for commodity finance in the world? How do operations differ to elsewhere?
How has traditional commodity finance been merged with project finance structures to develop new ways to finance natural resources, in emerging markets and developed economies?
What needs to be in place and how large are the requirements? Examining the challenges facing this type of finance
Influence is shifting in global energy markets, led in large part by the global impact of shale gas
What impact will lower North American gas prices have on Europe?
What happens when America starts exporting? What could it mean for Russian and Middle Eastern borrowers?
What does the global shale gas phenomenon mean in terms of financing requirements?
What does all this mean in terms of a knock on for other energy commodities?
Like every TXF event, Natural Resources and Commodities Finance 2014 stood out from others in this market.
It focussed on:
Dynamic ‘idea labs’ with capped-attendance
Instructive training sessions
Smaller private meetings, all facilitated by experienced moderators.
Guests heard honest, incisive opinions and analysis as part of a high quality discussion amongst speakers and participants.
Producers, traders, bankers, economists and academics from a range of sectors and regions attended including representatives from the following companies:
In the Golden Age Amsterdam was the first place in the world to create a fixed location for the trade in stocks and shares (1611). The shares of the very first limited liability company in the world to be traded were those of the Dutch East India Company (Verenigde Oost-Indische Compagnie, abbreviated to VOC).
Three hundred years later Berlage built the third Amsterdam Stock Exchange (1903); a building that generated a lot of controversy and, today, is considered the beginning of modern Dutch architecture.
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Phone: +31(0)20 531 33 55
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