JB's weekly round-up - 28 November 2013
Apologies for the late mailing of the Weekly News – TXF was somewhat tied up with its Short-Term Trade & Supply Trade Conference in Munich for the first part of this week, which I will relay detail to you in next week’s news.
Welcome to the weekly round-up of the TXF news service
Better late than never
Apologies for the late mailing of the Weekly News – TXF was somewhat tied up with its Short-Term Trade & Supply Trade Conference in Munich for the first part of this week, which I will relay detail to you in next week’s news. And now, having finally slept on several heavy doses of schweinebraten and a few litres of Bavarian dunkel ale I feel just about in a sober enough state, albeit very much heavier though, to report on what has been going on. Well maybe!
Brass in pocket
With heavy regulatory pressure putting the squeeze on banks, getting new additional funds at the right price is very much the order of the day for trade finance banks – who are very much disadvantaged by Basel III. So, last week’s partnering of Citi and Santander to issue Trade MAPS 1 – an asset backed securitisation debt issuance backed by trade finance assets, can be seen as a real landmark route being taken to partly alleviate the pressure (TXF News 21 November).
Roadshows for investors are taking place this week – in fact in London today. John Ahearn, global head of trade at Citi, tells TXF that: “By doing this as a multibank, it stays off our balance sheet.” This is to do with US financial regulation. Pricing of Trade MAPS 1 is still to be determined, but is likely to be revealed by 2 December. Further initiatives of this nature can be expected, and will most likely take place with Citi linking up with other partner trade finance banks.
On the corporate securitisation front, last week Finacity successfully structured a merger of two existing trade receivables securitisations for Mexican glass producer Vitro (TXF News 20 November). The Mexican company exports to more than 70 countries globally.
What was that name again?
Just like many law firms, the names of some of the institutional investors are on the tip of everyone’s tongues. Perhaps not. In the Netherlands – I know it’s obvious, but just for the unworldly I thought I better make it absolutely clear – last week Pensioenfonds Openbaar Vervoer, Spoorweg Pensioenfonds and Zwitserleven all chipped in to development bank FMO’s fund to assist SMEs in developing countries (TXF News 20 November).
The fund – actually known as SNS FMO SME Finance Fund (rolls off the tongue, doesn’t it?) - has now received €100 million ($135.4 million). But joking aside, the interesting thing about this development is the trend we see with the increasing involvement of certain groups of institutional investors - pension funds and insurance companies - in the realm of trade and agency finance. All these groups are looking for good investment results, and trade finance as an asset class has all the attributes. We just need to sell it properly.
There’s gold in them there hills!
Carving a niche in the market is something that every financier would like to do. And it is something that Russia’s Nomos-Bank has certainly done in its development of financing Russian gold producers. The most recent syndicated loan arranged for Nomos-Bank – amounting to $240 million – will be used in its entirety to on-lend to Russian gold miners (TXF News 18 November). Nomos-Bank has almost one-third of all Russian gold mining companies as its customers now. For the international lenders in this facility, the routing through Nomos-Bank provides access to Russian companies otherwise off-limits through direct lending.
Elsewhere on the commodity-related financing front, Rio Tinto banged into the market with the signing of its $7.5 billion revolving credit facilities (TXF News 22 November). The deal is split into two tranches, with some 28 relationship banks taking part. The company has come in early on this refinancing, as it takes advantage of the current favourable loan market conditions and some banks desperate to get assets booked. Others are not so pleased with the level of pricing however.
In another mega-deal, Norsk Hydro came to the market and secured $1.7 billion in a syndicated multi-currency credit facility with 13 international banks (TXF News 18 November).
Pastures new
As ever, there is always somebody on the move to pastures new. Last week I learned of Gilles Sayer’s new destination, having heard some weeks earlier that he had left Credit Agricole (CA-CIB). Gilles, who used to be managing director, global head of structured commodity finance at CA-CIB in London, is now managing director, Peak Trading Overseas at Essar Capital UK. Parent Essar is, of course, the Indian steel producing company.
Simon Tyler, who used to be head of corporate banking at China Construction Bank, based in London has also moved on, and is starting his own consultancy business. More on both of these moves next week.
Meanwhile in the Middle East, the National Bank of Abu Dhabi (NBAD) has established a structured finance unit and appointed Aleem Khan as the head of the new department (TXF News 20 November).
On the legal front, Hogan Lovells is expanding its reach into sub-Saharan Africa through a merger with the South African law firm Routledge Modise (TXF News 20 November).
And finally...
Congratulations to the All Blacks (New Zealand) rugby team for going the whole year without being beaten – although Ireland were very unlucky on Sunday not to have taken that mighty scalp!
And…finally, finally, if you hadn’t already noticed…..each week, somewhere within the Weekly News there is always the title of a song. I know, how silly of me, but it keeps me amused, so please indulge me or forgive me - whatever. The first person to name the song and the band each week (email me directly please) from now on, will win a nice crisp $100 trillion Zimbabwean dollar note. Don’t spend it all at once though!
Have a great rest of your week.
Jonathan Bell
Editor-in-Chief
