JB's weekly round up - 30 June 2014
The last few weeks has seen banks flocking to be part of the $2.65 billion revolving credit facility (RCF) signed last week by energy trading company Mercuria Energy.
Welcome to a bumper edition of the weekly round-up from TXF
That was the week that was…
Banks flock to Mercuria loan
The last few weeks has seen banks flocking to be part of the $2.65 billion revolving credit facility (RCF) signed last week by energy trading company Mercuria Energy. The deal was heavily oversubscribed, resulting in some significant scaling back. Read more about the deal here.
The loan comes at an interesting time for Mercuria as the trader gets to grips with amalgamating the assets from the $3.5 billion purchase of JP Morgan’s physical commodity business.
It’s never over till it’s over
Everybody is trying really hard to find a solution to Rusal’s latest debt refinancing. But it is never easy. And this is shown up more than ever in the latest announcements from the discussions –detailed in our news item – between Rusal and creditors (PXF lenders). The deal is almost there, thanks to the sterling efforts of the coordinating group of lenders, but a small number are reluctant to agree to the arrangement, which could mean some additional legal action. Sigh!
Tagmydeals featured transaction
Uralkali joins the unsecured club
Russian potash producer Uralkali has signed its first ever unsecured club loan worth $450 million. The unprecedented facility demonstrates the ability of high-level Russian borrowers to attract international funding despite the geopolitical strife between Russia and Ukraine – as Uralkali’s CFO has been quick to point out.
Full details of the transaction are also available viatagmydeals. You can login to see this deal and hundreds more using your TXF login. It's completely free of charge.
Gazprom and Naftogaz clash over pricing
Of course, it is not business as usual everywhere in the region. Indeed, tensions between Russia and Ukraine escalated further when the state-owned Gazprom moved the Ukrainian oil and gas company onto a prepay arrangement, citing unpaid bills as the reason.
Naftogaz insists that the company has paid all the invoices for gas supplies that do not have disputed pricing, and will make remaining payments only after agreements on price. Both companies have referred each other to the Stockholm Arbitration Institute, as the row threatens to get even messier.
Have a look at the article for details of the dispute and comments from both parties.
Trade and export finance registers top marks in ICC report
In an important development for the industry, the ICC has released its Trade Register Report for 2014. The empirical evidence points to something many in the industry knew for a long time but did not have the data to back up: that trade and export finance is a low risk bank financing technique and is making a strong contribution to economic recovery and growth.
This is the sort of data that bodies like the ICC need when they go into discussions with regulators, not least records that show short-term trade finance customer default rates range from a low of 0.033% to a high of 0.241%, which is a fraction of the 1.38% default rate reported by Moody’s for all corporate products (according to 2012 figures).
The register is a big achievement and step in the right direction for the industry. The further development of the register, and disclosure of other reliable and increasingly regular trade data, will be crucial as the industry looks to present itself in a positive light to regulators and investors alike.
Have a look at the article for more findings from the ICC.
In addition, read the exclusive interview with Kah Chye Tan, chairman of the ICC Banking Commission, on the findings of the ICC Trade Register or watch the video here.
JBIC storms in for Peruvian copper
Japan’s JBIC has signed a $390 million loan for Mitsubishi Corporation to partially purchase an 18.1% interest in the Anglo American Quellaveco copper project in Peru from IFC. Other funds are coming from commercial banks. It is a deal which goes back to 2012, but above all, it demonstrates the strong support that Japanese companies can rely on from their export credit agencies.Read more on the subject here.
Indonesia gets hydro going with JBIC and Mizuho
As Indonesia begins to seriously look at energy producing alternatives, a deal signed last week sees JBIC and Mizuho Bank team in a co-financing arrangement to provide financing for the estimated $150 million Rajamandala Hydro Power Plant Project in West Java. Japan Inc. will roll along nicely with the $66 million direct funding contribution from JBIC, as part of the overall $110 million co-financing. See the full deal details as well as info on the country’s power generation capacity in this article.
UK-China trade boosted as UKEF adopts RMB
After the UK chancellor recently announced £14 billion of trade and investment deals between the UK and Chinese firms, the UK-China relationship grew another notch as UK Export Finance (UKEF) added the offshore renminbi (RMB) to its list of supported currencies.
The export credit agency is currently looking to structure its first RMB supported deal and has signed an agreement with HSBC and a leading Chinese company to further this goal. The move is significant in two ways: it means UKEF is one of the first agencies to adopt the currency and also reflects the more progressive path it is now taking. Full details of the plan are included in the article.
Read the Fin4Ag special report
The latest TXF special report, titled ‘Revisiting Agricultural Finance’, is now available in PDF and online on our website. You can also download the specially designed app for the report via the App store or on Android.
The agri-finance report looks at what is needed to ensure finance is available for producers, agri-suppliers, traders and others involved in the agri-value chain. From the rise of African banks and sophisticated electronic receipt systems to the critical role of traders, you can read all the articles on the dedicated Fin4Ag page here.
The Fin4Ag conference will take place in Nairobi on 14-18 July. Over 500 delegates are expected.
Fundamentals of ECA Finance, Houston, 24th July
We will be partnering with Valerie Colville and Francisco Anzola of CC Solutions, and joining Paula Swain of US Exim, to host a one day training course on the 24th July in Houston, Texas, on ‘the Fundamentals of ECA Finance’.
Click here to book your place and to see what others said about the course last time we ran it.
And finally…
TXF survey reveals strong optimism over ECA finance activity
For the second consecutive year, TXF conducted a survey of participants at our ECA/DFI Finance Conference in Paris. There are some revealing results, from strong optimism in the health of ECA activity looking forwards to the essentiality of capital markets to the sector.
Have a look at the breakdown of results here.
That’s all folks.
Cheers,
JB
