JB's weekly round-up - 6 February 2014

There was much talk and media attention towards the end of last year around the Citi and Santander Trade MAPS securitisation programme. And the subject of securitisation is firmly embedded in most bankers’ minds as they consider the options to move assets off-balance sheet.
3 min

Welcome to the weekly round-up of the TXF news service

That was the week that was…

The buzz around securitisation

There was much talk and media attention towards the end of last year around the Citi Please wait... and Santander Please wait... Trade MAPS securitisation programme. And the subject of securitisation is firmly embedded in most bankers’ minds as they consider the options to move assets off-balance sheet.

Much earlier last year, Commerzbank arranged a trade asset securitisation under its CoTrax Finance II-1 programme. Hans Krohn, from the bank, writes exclusively for TXF about how the issue of securitisation has become central to unlocking liquidity for trade banks, and how more can be done to get institutional investors comfortable with trade assets (TXF News 28 January 2014).

Sustainable commodity finance gains momentum 

In a development which will hopefully push the debate of sustainable commodity finance further along, the Banking Environment Initiative (BEI) has released a report entitled ‘Sustainable Shipment Letters of Credit’ (TXF News 27 January 2014). The report focuses on ways in which globally recognised sustainability standards can be incorporated into LCs that support international commodity trading, using the palm oil supply chain as a case study.  

Miners on the front line

The commodity sector saw two big deals taking place last week – albeit on different continents.

With perhaps a sigh of relief, the $1.5 billion pre-export financing for Russian coal miner Suek finally signed (TXF News 29 January 2014). The transaction, which was healthily oversubscribed, had to trundle through the Christmas and New Year period and the Russian New Year before finally closing on 28 January. Congratulations to coordinating bank ING Please wait... for seeing the deal safely through.

In another good indication of the solidity of the commodity banking sector, First Quantum Minerals formally mandated BNP Paribas and Standard Chartered to arrange a new $2.5 billion five-year term loan and revolving credit facility (TXF News 28 January 2014). The transaction will now move ahead with these two banks leading the show. It is highly significant that following the term loan extension earlier in 2013, the banks and First Quantum are cooperating to ensure the financing is secured now that the mining company has a much more detailed plan regarding capital expenditure at its copper development Cobre Panama.

The $2.5 billion financing being arranged for First Quantum Please wait... is part of an overall capital structure optimisation plan which takes into account the company’s other interests. Full details can be found in the extended article.

Asia-Pacific trade insurance market buoyant

Further evidence of the buoyant trade insurance market in the Asia-Pacific region came last week with news from BPL Global that the company is expanding its operational scope in the region (TXF News 27 January 2014).

Anthony Palmer at BPL Please wait... in Singapore says that revenues related to the firm’s Asian operations for the past year are up by more than 50%. Because of the increase in business, BPL has hired Margaret Ho as a broker within their Hong Kong office.

The trade credit insurance market in the region has seen a rapid expansion over the last few years, with many private insurance companies setting up or further building their operations – particularly in Singapore. The trend looks set to continue.    

US Ex-Im takes it to the Senate

It is really quite astounding that US Ex-Im continues to have to explain every little move it makes to the US Senate and House of Representatives. The evidence is there for all to see – the bank does the most outstanding job for US exporters and the economy, and ought to be applauded from the rooftops. Unfortunately, there seem to be many within the two houses that simply do not understand what US Ex-Im does and what great benefit it brings in promoting US exports globally.

So US Ex-Im president and chairman Fred Hochberg testified to the US Senate last week in a most brilliant address (TXF News 27 January 2014). We salute you Fred for your patience and diligence in continually having to deal with the Senate on the budget issue and the role of the bank in general.

Under the leadership of Hochberg, US Ex-Im has modernised tremendously and introduced numerous new measures to assist US manufacturers and exporters with the introduction of new products and initiatives – particularly capital market tools. These measures come at a time when there is incredible competition from other agencies globally. Keep up the good work US Ex-Im.

And finally……..

TXF is currently working on its Special Report on Natural Resource and Commodity Financing. If you have an interest in being within the report in some capacity do drop me a line. The report will be made available online and will also be distributed in print format at the TXF Natural Resource and Commodity Financing Conference taking place in Amsterdam on 6-7 May 2014.

All the best,

Jonathan Bell

Editor in Chief


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