JB's weekly round up - 09 June 2014
Discussions in the plenary and side sessions at the TXF ECA/DFI Conference in Paris last week were thoughtful and direct.
Welcome to the weekly round-up of the TXF news service
That was the week that was………
Direct and to the point in Paris
Discussions in the plenary and side sessions at the TXF ECA/DFI Conference in Paris last week were thoughtful and direct. None more so than the recurring theme of direct lending programmes from the export credit agencies (ECAs). The opening panel of the day saw a good interchange between commercial bankers and ECAs with US Ex-Im Bank being pressed on why the agency is pushing so much direct lending when the commercial banks are, in many cases, ready, willing and able to come up with the needed financing.
The case of the Roy Hill financing was brought up – where the commercial bank side was more than two times oversubscribed. However, commercial banks’ allotments were severely scaled back due to the amount of direct lending coming in from the ECAs – in particular US Ex-Im, which was one of the largest agency contributors. For its part, US Ex-Im insists that it is only following its country’s exporters. The hum from other guests (or the banks at least) in this session and others would tend to support the view that with not enough business to go around at the present time, it is time for ECAs to take a long hard look at their direct lending programmes and scale them back wherever possible.
Thanks again to all those that took part in the conference. We were chuffed to have 400 there, but were equally pleased with the open, honest and intimate discussions we saw taking place throughout the two days.
You can view photos from the event here.
T is for Texas
Following the success of our Fundamentals of ECA Financetraining course in Washington, we are once again teaming up with our friends at CC Solutions to offer a jam-packed edition in Houston, Texas, this July. Check out the agenda now or get in touch if you're interested in attending.
Euler Hermes tops ECA ‘wish list’
From a selection of ten countries, the audience in Paris selected Germany as the country whose ECA best serves their exporters, with South Korea second.
Other questions we asked the audience centred on pricing, hot markets, Basel III, capital markets, Russia, bonuses, and liquidity.
We have crunched the numbers, and compared responses across different industry groups – with some eye-catching results. You can see the full report here
Glencore attracts a smaller crowd
The big, big money of last week was on the Glencore refinancing with the company eventually taking an overall $15.3 billion in the dual tranche revolving credit facilities (RCF) – after some scaling back. Of course, everyone is going to pile in if we are talking about a company such as Glencore, but it was not without some grumbling at the price. Read about the details in our news report. Ultimately, some 69 banks came into the deal, which is somewhat short of the 80 banks that came on board for the annual mega-pile this time last year. No worries for Glencore though.
Gunvor has solid Asian success
Elsewhere in the commodity trading world, energy trading company Gunvor had some sweet success with its Asian-centred RCF seeing a healthy oversubscription. The company ended up taking $536 million, having launched initially back at the end of April looking for $350 million. Check the news item for the banks involved. The deal ran pretty smoothly according to the bookrunners, despite some ridiculous sabre rattling by US authorities over the company’s Russian ties. Move on guys!
Gamesa strikes a ‘first’ in Chinese export credit sector
Spanish wind turbine manufacturer Gamesa scored a good result last week by becoming the first original equipment manufacturer to get sole support from a Chinese bank along with Chinese export credit agency backing for exports out of China. In this case the bank concerned was China Minsheng Banking Corporation. The turbines, being manufactured in China, are destined for a wind farm in Uruguay in a project being developed by Spain’s Abengoa. Read the full story here.
Ships TO Asia this time
The shipping sector has been awash with deals for the financing of vessels, specialised vessels and rigs being produced in Asian shipyards for the rest of the world over the past year or more now. But last week we saw a reverse flow example - KfW IPEX-Bank, Credit Agricole and DNB Bank arranged the €600 million financing for the construction of a cruise ship for Asian company Star Cruises. The vessel is being built at Meyer Werft Shipyard in Germany. With the Asian cruise market now becoming more of a driving force, expect to see increasing business. See the full news item here.
And finally…….
The vastly disturbing news that the US authorities are considering fining French bank BNP Paribas anywhere up to $10 billion foralleged breaches of sanctions against Iran and Sudan has sent shivers down the entire trade finance banking sector. The US is looking to play the marshal of the world, and we should all be concerned – not at its desire to see true international rules obeyed, but at its unilateral stance to impose punishments, which are in the extreme. The trade finance sector has taken massive hits over the past few years, and the last thing it now needs is for a key player to be potentially hit with such a tidal wave of a punishment. Read our news item here.
That's all for now.
JB
