JB's weekly round-up - 27 January 2014

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

That was the week that was…

Trade volume reporting nonsense
Earlier this month, Dealogic sent out press releases broadcasting their results for the overall trade volumes for 2013, declaring that volumes had fallen by over 30% compared to 2012! Such a declaration, of course, gives a very misleading perspective of the trade finance sector.

Dealogic declared in a press release: “Global trade finance volume decreased for the second consecutive year in 2013, falling 31% to $125.1bn from $181.5bn in 2012. This was the largest year-on-year percentage decrease on record with volume dropping to the lowest annual total since 2007.” Dealogic also went on to say: “ECA financing volume dropped 42% to $71.8bn in 2013 from $124.1bn in 2012.”

Well, I will not repeat any more of what most of us know to be absolute nonsense. Such sensationalist statements do the trade finance industry no favours at all. While Dealogic does a good job in providing deal detail and league tables, the dissemination of such sweeping statements as those above should be refrained from.

What will be much more relevant for the industry is the trade finance figures for 2013 released by bodies such as the World Bank and the Berne Union later in the year. We all know that these will reveal a completely different profile and one much more representative of where trade finance volumes really are.
 

Big money in Asian agri
On the commodity front, the big deal of last week was the moving ahead with the $1.75 billion financing for Singapore-headquartered agri-group Wilmar (TXF News 20 January 2014). The company mandated BNP Paribas, Malayan Banking, Mizuho, Oversea-Chinese Banking Corp, Rabobank International, SMBC and Westpac as the MLAs.

Wartsila and Finnvera show Indonesian potential 
The potential of Indonesia as a market for ECA-backed capital equipment exports was further demonstrated last week with thefinancing of Wartsila gas-fired generators in a deal backed by Finnish export credit agency Finnvera (TXF News 22 January 2014). Standard Chartered arranged the $215 million financing with Torsten Richter in London leading the team. Finnvera and Finnish Export Credit combined to support the deal.

In another Indonesian example, Japan’s JBIC and Nexi backed a $68 million financing for the Indonesian government to purchase Isuzu trucks from an Isuzu Motors affiliate (TXF News 20 January 2014). BTMU and ANZ were co-financiers.

Ahoy there with Milaha!
In the corporate loan market last week, Qatar Shipping Company, a wholly-owned subsidiary of Milaha, secured a $425 million refinancing facility (TXF News 23 January 2014). MLAs on the transaction were: BTMU, SMBC, Shinsei, DBJ and Standard Chartered.

On the move
At HSBC, the bank made three key appointments within its global trade and receivables team - GTRF (TXF News 23 January 2014). Gerd Pitcher has become the GTRF regional head of Latin America. Wei Wei Ng becomes head of international, GTRF Asia-Pacific, and Lorna Strong is moving from Vancouver to London to act as deputy general counsel for GTRF.

And, if anyone out there is looking for a job as head of trade finance with an expanding bank do drop me an email as an interesting vacancy has arisen. The European-based job would involve looking after a front office team covering trade and commodity financing.

BAFT in London
Last week BAFT-IFSA held its annual Europe meeting and conference in London, and it was a great opportunity to catch up with a good number of key trade finance individuals, and particularly many based in New York. BAFT did a sterling job in bringing a diverse group together. The audience is primarily bankers.

One of the highlights for me personally was the panel on ‘Quo Vadis Trade Finance: Recent Developments and Their Impact on the Future’. The panellists were John Ahearn of Citi, Gautier Dirckx of BNP Paribas, Kah Chye Tan of JP Morgan and Bonnie Galat of the IFC. The moderator was Axel Miller from Oliver Wyman. I can tell you it was a very open and fun debate. I am unable to go into detail as it was under Chatham House rules, and I have yet to get clearance on quotes etc, but hope to report on some of the issues raised soon on our website.

It was an excellent move to have Bonnie Galat on the panel, who acted as a marvellous leveller within the discussions. If you do not know already, the lovely Bonnie is retiring from the IFC at the end of this month, and we will miss her immensely. Her contributions to international trade have been supreme and we thank her for that. Good luck Bonnie, and we hope we see you if you decide to do something else within trade.

Day two of the BAFT event had the commodity panel where we had been given the unfortunate title of ‘Commodities Financing: Boom or Bust?’ Perhaps it was put there provocatively – and naturally, I as panel moderator rose to the bait. Panellists were: Jean-Francois Lambert of HSBC, Geoffrey Wynne of Sullivan & Worcester, Juultje van der Wijk of ING and Doug Ziurys of FImetrix. Interestingly, when I asked the audience how many were involved in the financing of commodities of one form or another, only about 20% raised their hands.

IFC in Lisbon
Don’t forget that the IFC is holding its Global Trade Partners Meeting 2014 in Lisbon, Portugal from 18-20 February at the Epic Sana Hotel. Further details can be found here. The organisers inform us that the event is nearly at capacity, so if you want to go and haven’t booked already, it is probably wise to jump in asap. See you there.

And finally…
As much of Asia packs up for the celebrations at the end of this week, we at TXF would like to wish everybody a very happy Chinese New Year, and a healthy and prosperous Year of the Horse.

All the best,
JB

Editor in Chief