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JB's weekly round-up - 13 January 2014

As we are all firmly back in the groove for 2014, at TXF we would like to send everybody our best wishes for a healthy and successful year ahead. Of course, we still have Chinese New Year to come at the end of January.
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Welcome to the weekly round-up of the TXF news service

That was the week that was………

Saddle up for the year of the horse

As we are all firmly back in the groove for 2014, at TXF we would like to send everybody our best wishes for a healthy and successful year ahead. Of course, we still have Chinese New Year to come at the end of January  - but as we all canter on into the year of the horse, we look forward to an upbeat year, and there are many signs that provide positive encouragement for good business prospects and opportunities ahead. 
  

Reminder…….Deals of the Year…….

TXF is still open for its Deals of the Year 2013, which we have entitled ‘The Perfect 10’. If you haven’t already submitted any deals please do so by 20 January, telling us why you think the deal is worthy of an award.
 

Please email me the details directly ([email protected]

Dates for the diary

We now have firmed up dates for two of our 2014 events. We are very much looking forward to hosting the commodities industry in Amsterdam on the 6th and 7thMay for our Natural Resources and Commodity Finance conference. It will take place at the Beurs van Berlage (the old commodities exchange), which should make for a great setting.
 
Our ECA Finance conference will return to Paris, but this time in June. It will take place at the Pavillon Cambon (formerly the HQ of Crédit Foncier de France) on the 3rdand 4th.
 
For further information on either conference, or to give your two cents on what we should be including, please email [email protected]. We would love to hear from you.

Russian projects on the move

Since the last Weekly News I sent out on 23 December 2013, there has been a flurry of activity on the export and agency front in Russia. This is hardly unsurprising given that many such deals often get signed off at year end – what is interesting is that the Russian market continues to have a marvellous diversity of activity and projects in the export finance field.

Of particular significance was the final investment decision made by Novatek and Total for the estimated $26.9 billion Yamal LNG project (TXF News 23 December 2013). Chinese banks already have initial agreements in place for some of the financing, but there is still much to be finalised on the overall project. 

Around the same time, US Ex-Im and JP Morgan arranged financing for VTB Leasing and the export of US mining equipment to Russia (TXF News 23 December 2013). P&H Mining Equipment Corp stands to benefit from significant sales through VTB Leasing.
 
In the shipping sector, Russia’s Sovcomflot signed a $316 million line of credit with ING, KfW IPEX-Bank and SMBC for the supply of two new ice-class LNG carriers (TXF News 8 January 2014). Nikolai Kolesnikov, CFO at Sovcomflot points out that ING and SMBC have been two of the most influential banks for the company for many years. Sovcomflot was particularly active in 2013, and we profile some of the detail of that activity in the news article.
 
Elsewhere within ECA-backed financing, Korea’s Kexim and K-sure have combined with Norway’s GIEK to provide $307 million financing for a North Sea floating production and storage vessel (FPSO) (TXF News 7 January 2014). Our report also highlights further cooperation between Kexim and GIEK.
 
And in the transportation sector, ING recently closed a debut agency-backed $78 million financing for MIAT Mongolian Airlines (TXF News 9 January 2014). The deal is also US Ex-Im’s first aircraft transaction in Mongolia. Funding is through PEFCO.

A spur for Asian supply chain finance
The further development of Asia-Pacific supply chain finance has received something of a boost with the recent cooperation agreement between the Asian Development Bank (ADB) and Standard Chartered (TXF News 10 January 2014). The agreement is expected to generate more than $800 million in supply chain transactions, most of which will be directed towards SMEs supplying large companies with materials for intermediate and final production.
 
The cooperation agreement is the first of its kind under the ADB’s recently launched supply chain finance programme. With the support of ADB in such an operation it allows SMEs to secure vital finance often unobtainable to them through many of the commercial banks in traditional structures. 

Big numbers, big country
Russian banks continue to wow the natural resource sector with big value deals. The latest example comes with the VTB Capital $4.5 billion financing arranged for Russian fertiliser producer Uralchem (TXF News 6 January 2014).
 
This mega-loan will see Uralchem use much of the funds for the purchase of a 20% stake in the Russian potash producer Uralkali. The mega-loan has a tenor of seven-years – an exceptional tenor for this type of loan. Uralkali itself arranged a $2 billion credit line through Russia’s Sberbank in mid-December.

And finally...
TXF is currently putting together a Natural Resource and Commodity Finance Special Report for publication in February. If you have an interest in speaking with us about your activities or about market trends within this sector, we would be pleased to hear from you. Just drop me a line.

Jonathan Bell
Editor in Chief

 

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