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Perspective
28 July 2014

JB's weekly round up - 28 July 2014

Region:
Middle East & Africa, Americas, Asia-Pacific, Europe
Editor-in-chief
Sanctions will continue to be the talk of the industry in the weeks ahead, as both EU and US look to increase pressure on Russia in light of the crisis in Eastern Ukraine.

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

That was the week that was
 
 EU and US increase sanctions on Russia
Sanctions will continue to be the talk of the industry in the weeks ahead, as both EU and US look to increase pressure on Russia in light of the crisis in Eastern Ukraine.
 
State-owned and development banks have been a particular target of the latest measures, with several institutions shut out from the US economy and access to the European capital markets. The energy and defence sectors have also seen new measures.
 
Read the latest announcements from the EU and US here.
 
 Webinar on the latest developments
For more information on the latest developments and their wider impacts, international law firm Morgan Lewis will be hosting a free webinar from their Moscow office to discuss the latest EU and US sanctions against Russian persons and companies. The discussions will be led by Morgan Lewis partners Grigory Marinichev and Bruce Johnston.
 
The webinar will be on Friday 1 August - at 9am EDT, 2pm BST, 3pm CEST, 5pm MSK. To register, please click here.
 
 Big changes at HSBC export finance 
Last week saw a number of changes at HSBC export finance, marking the biggest reorganisation of the team in six years. The new regional head of export finance for Asia is Arnaud Cachard. The new regional head of export finance for MENA is Manav Futnani. Former MENA head Jeff Bailey has moved back to London – welcome back – where he takes on a senior role as head of project and export finance distribution.
 
The new regional head of export finance for Africa is Simon Lee. HSBC’s global head of export finance, Peter Luketa, tells TXF that some of the moves bring forward a number of younger, but highly experienced bankers, reinvigorating various parts of the business line – particularly in Europe. For full details of all the moves you will need to go and read the full news item.
 
 ANZ beefs up export finance team
Elsewhere, ANZ finally got around to formally announcing that it had beefed up its export finance team. Craig Jones joins the team in London as director, project & export finance, Europe & America, international and institutional banking. This follows other appointments earlier in the year. See full details here.
 
 Trafi jumps back in the market
On the commodity finance front, last week we saw Trafigura jump back into the loan market with the launch of a $1.3 billion equivalent two-currency revolving credit facility and term loan package. Full details of the banks involved and tranche breakdown can be found in the news report.
 
The arrangement is an Asia-focused transaction and this is mirrored in the initial banks involved. Last year, Trafi launched its Asia facility at $1.2 billion, with the deal eventually closing well oversubscribed at $1.76 billion. That deal attracted several new Taiwanese lenders, and this year we can expect to see continued interest from new Asian lenders.
 
 Ethiopian oil imports get help from IFC and commercial banks
In a highly important deal for the sub-Saharan Africa commodity finance market, Natixis, IFC and Standard Bank have arranged financing to cover crucial imports of petroleum products to Ethiopia. The $500 million commodity finance facility was led by Natixis.
 
The funds finance Kuwait-headquartered Independent Petroleum Group’s sales of petroleum products to Ethiopia over a one year period. IFC’s role is crucial in securing the deal, and assists Ethiopia in securing funds for crucial imports. Further detail can be found here.
 
 Featured deal: ANZ and China Exim team for LNG ships  
On the export finance front, the big deal of last week was the $787 million financing jointly arranged by ANZ and China Exim to fund the procurement of four 174,400m3 LNG vessels to be built by Hudong-Zhonghua in China.  
 
The financing comprises 50% of direct ECA loans provided by China Exim and 50% of commercial loans. The facilities are provided to four special purpose companies each holding one vessel and have a door-to-door tenor of up to 17 years. The vessels will be chartered to BG Group. Further information can be found in the news item.
 
And via our free deals database tagmydeals:



 EBRD comes up with A/B loan structure for Turkey’s Ford Otosan
Development banks appear in full swing at the present time – and the EBRD is no exception. In a major deal for the Turkish auto sector, the development bank has come up with a €140 million ($188 million) loan to leading Turkish commercial vehicle maker Ford Otomotiv Sanayi (Ford Otosan). The loan will be used to finance an investment programme to develop high-tech truck engine parts and expand production capacity. The B-portion has been syndicated to Crédit Agricole CIB, HSBC, Société Générale CIB and the Bank of Tokyo-Mitsubishi UFJ. Additional detail can be seen in the news item.

In other EBRD-related news, the bank has signed its largest loan yet to Tajikistan. The deal sees a $50 million loan being provided to fund the first phase of the modernisation of the Qairokkum hydropower plant in the country. See the news item.
 
 Sri Lanka and Uzbek benefit from ADB funds
In Asia, the Asian Development Bank (ADB) is providing new loans to both Sri Lanka and Uzbekistan as the agency continues to fund projects in the energy sector. Under the arrangements, both countries will receive $300 million each from the ADB, along with funding from other agencies. A full breakdown of the projects can be seen here.

 MIGA reports record business levels
The Multilateral Investment Guarantee Agency (MIGA) has just released strong results for its financial year ending 30 June, 2014, reporting $3.2 billion in new business. This new business saw an uptick of 13% over the previous year.
 
The figures reveal a record high of $3.2 billion in new insurance, which underpins foreign direct investment that is expected to catalyse a further $2.6 billion in investment. These are promising results for an agency that continues to come up with innovative arrangements as it works in many markets to provide commercial banks with a useful helping hand. See the news report for full figures.

 Brunswick Rail bucks the trend
While many deals with Russia have been put on hold, some business is continuing to be funded. Brunswick Rail, the specialist Russian railcar leasing company, has signed a credit facility agreement for over RUB 8 billion ($226 million) with a group of international banks. Check out the banks involved here.

This financing has an availability period of 12 months and complements a recent equity placement with the EBRD that raised $150 million. The new credit facility, combined with the EBRD placement, will enable Brunswick Rail to continue to execute its growth strategy, as well as to refinance indebtedness owed to VTB Group and to increase its financial flexibility.

 SWIFT brings more to the KYC party
SWIFT continues its sterling work in bringing banks on board to secure critical mass in one of its registry programmes. Last week, six more global banks signed up to jointly develop SWIFT’s Know Your Customer (KYC) Registry, a centralised repository that maintains a standardised set of information about banks required for due diligence processes.
 
The new institutions are: Barclays, Deutsche Bank, Erste Group Bank, HSBC, ING and Raiffeisen Bank International – bringing the total number of participating banks to 12. The new banks join Bank of America Merrill Lynch, Citi, Commerzbank, JP Morgan, Société Générale and Standard Chartered, whose participation in the KYC initiative was announced in March 2014. More detail on the scheme can be seen in the news report.

 And finally...
Les grande vacances? Certainly not for me, and most likely not for you either. It’s all relative! Just to explain for those in other parts of the globe, les grandes vacances – the summer period when much of France and other parts of continental Europe goes on a long holiday – always used to be a thing of real envy for us Brits. What, a four, five, six week holiday? Strewth! But did this ever really happen? In some cases yes – and in some cases it still does.
 
But a few years ago, this all seemed to change and you would find many people at their desks in Paris in August. Sacre bleu, I hear you say in New York – or was that holy cow? But if you look at our industry of trade – particularly for those on the frontline, if there is something to be done, folk are invariably there. But spare a thought for our Chinese friends who rarely get proper holidays. And the US is pretty mean on this too.
 
However, the best holidays of all have to be reserved for those special heads of departments or business lines who change jobs. What about the European banker who had to twiddle his thumbs for two years before he left with a handsome payoff for pastures new? And the big lawyer who had a year of gardening leave? C’est incredible, non? Anyway, as I say it’s all relative. And if you are going away – bon vacances, mes amis! 
 
That’s all folks.
 
Mine’s a pint of pale ale. Cheers!
 
JB

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