JB's weekly round up - 21 July 2014

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

 ECA finance industry benchmarking report due in September
In September, we will be launching our inaugural industry report on the ECA finance sector, using information from tagmydeals – our deals database. Using deal data, we will analyse trends in the market, and benchmark the performance of key players.
 
We already have significant buy-in from across the industry for the study, and for tagmydeals, which will be reflected in the accuracy and findings of the report.
 
Only deal information live on tagmydeals before the end of Augustwill be used in the report. Therefore, to ensure your deals are listed, and to guarantee your copy of the report when published, pleasecontact Max Carter.
 
Also check out our tagmydeals featured deal for the week later in this bulletin.
 
 Highly successful Fin4Ag conference closes
After five full days of engaging content and fruitful networking, theFin4Ag 2014 conference in Nairobi has drawn to a close. Overall, some 890 delegates attended the conference from 81 countries, all geared towards finding solutions for financing agriculture in Africa, the Caribbean and the Pacific.
 
The event provided inspiration at the highest level, with Felix Koskei, the Kenyan cabinet secretary, ministry of agriculture, livestock and fisheries, summing up: “There is an immense gap in financing agriculture in Africa, and a lot of the ideas have come from this conference in terms of bridging that gap.”
 
You can read more highlights from the closing ceremony here. Some of the sessions from the conference are revisited below, but you can also view all the news items on TXF’s Fin4Ag microsite. TXF will also be producing a special post-conference report that will be available for download from our website – we will keep you posted.
 
 Fin4Ag: Africa can learn from Brazil on engaging capital markets
In the early nineties, Brazil’s agricultural sector was lacking in financing, so it turned to the capital markets. It did this through the use of Rural Credit Notes (CPRs), bonds issued by farmers and cooperatives where they pledge a certain amount of crops or cattle in return for financing. The CPRs are collateralised either by future crop produce or farmers’ livestock.
 
The move ushered in a new wave of financing into the sector and has proven very successful. Now, as African agriculture struggles to find enough financing, can a similar model be replicated there?Read the TXF article to see the challenges involved in this and learn more about Brazil’s success with CPRs.
 
 Fin4Ag: A new dawn for warehouse receipt finance
A new study into warehouse receipts and collateral management was unveiled at the Fin4Ag conference. The 200-page reportdissects the experiences of nine countries, examining lessons learned and highlighting potential ways forward in one of the most exciting fields of agricultural finance.
 
Madagascar’s community warehouse system – where farmers store produce under their own name in funder- or communally owned storage facilities - is one of the success stories highlighted in the report. The report also points to challenges in the field and points to next steps for progress.  Check out the TXF news item for more info on the study and quotes from the author.
 
 Fin4Ag: Investment funds about more than money
The number of Agricultural Investment Funds (AIFs) is also increasing, buoyed by a growing world population and increasing food demand. In Africa, where the majority of newly established AIFs are focusing, they are looking to do more than just fill in financing gaps.
 
The focus is now also on providing training and technical assistance, with workshops and one-to-one sessions on everything from understanding legal documentation to cash flow projections.Have a look at the news item for examples of this sort of AIF and what success they are hoping to have.
 
 BRICS build their own development bank
In what was perhaps the most significant development last week, the BRICS countries of Brazil, Russia, India, China and South Africa have signed a treaty to set up a new development bank and inject an initial $50 billion into it. This figure will rise to $100 billion eventually, with the primary focus of lending on infrastructure projects.
 
The bank is called the New Development Bank (NDB) – and marks a move away from the World Bank/IMF, which it says is losing credibility, legitimacy and effectiveness as a result of its failure to reform. The NDB will target projects in emerging markets and aim to make its lending processes faster, simpler and cheaper. The news item contains key quotes released by the BRICS leaders.
 
In addition to the development bank, a memorandum of understanding (MoU) was signed amongst the countries’ export credit agencies (ECAs), that will allow greater information sharing and co-operation on deals between ABGF of Brazil, EXIAR of Russia, ECGC of India, China’s Sinosure and South Africa’s ECIC.
 
 Russian companies facing further sanctions
Sanctions have returned firmly to the fore in recent days, as the Office for Foreign Assets Control (OFAC) in the US and the EU have added more Russian companies to the sanctions list. Energy companies Rosneft and Novatek, along with Gazprombank and the state development Vnesheconombank (VEB) are the latest to be sanctioned. VEB is also the 100% shareholder of EXIAR, the Russian ECA. Our news item has more details and links to the statements made by the US and EU.

You can also read Delta Economics’ Rebecca Harding’s guest article “BRIC through a window” on the significance of Gazprom’s move to price Chinese oil deals in Roubles and Yuan
 
 KfW IPEX secures big order for German shipbuilder
KfW-IPEX have closed another large deal, structuring financing amounting to approximately €1.6 billion ($2.16 billion) for the construction of two new cruise ships for Miami-based Norwegian Cruise Line (NCL).
 
The cruise ships are to be built at the Meyer Werft shipyard in Papenburg, Germany. KfW IPEX-Bank took on the structuring for the overall financing and its commitment of the overall loan amount has ensured the order for Meyer Werft. The loan is to be syndicated to an international consortium of banks. See the full details here.
 
 Featured deal - Ma'aden
Our tagmydeals featured deal for this week is the whopping $5 billion ECA-backed project financing in Saudi Arabia for Ma’aden Wa’ad Al-Shamal – the petrochemicals company.  We covered the deal on TXF a few weeks ago and you can find information on all four tranches of the project here.

 On the move
The Export-Import Bank of the United States (US Ex-Im) has appointed Scott Schloegel as senior vice president and chief of staff to chairman and president Fred Hochberg. Schloegel has served as the senior vice president of congressional affairs at US Ex-Im since 2011, where he successfully led US Ex-Im to a multi-year reauthorisation through Congress – far from a straightforward task.

Finacity, the receivables finance company headed by Adrian Katz, has hired former Citi and Santander structured finance specialistJayme Bulcao to bolster operations within Latin America.
 
Elsewhere, Mary MacLeod has been appointed ANZ’s chief financial officer (CFO), international and institutional banking (IIB). The former deputy CEO of ICBC International will have responsibility for managing the financial performance and regulatory reporting for IIB across ANZ’s 33 markets.
 
In the Middle East, the National Bank of Abu Dhabi (NBAD) has appointed Jonathan Macdonald as managing director and head of syndicated finance. Macdonald has an impressive track record, bringing with him over 30 years’ international syndicated loans experience. He has worked in London, Hong Kong, New York and Paris and is a former vice-chairman of the Loan Market Association.
 
 And finally…
Tomorrow CC Solutions and TXF will be hosting our 'Fundamentals of ECA Finance' training course in Houston, Texas. I hope all those that have registered find it to be an informative and engaging experience.
 
We really see the value of training and have tried to make it a big part of what we do at TXF. If there are any issues in the market that you think should be addressed via a detailed educational programme, please let us know and we will look to structure something that is genuinely beneficial to the industry.
 
Have a great week,

JB