JB's weekly round up - 18 August 2014
Last week’s blog from CC Solutions focused on US Ex-Im with the title ‘The fate of US Ex-Im Bank’.
Welcome to the weekly round-up of the TXF news service
That was the week that was
Support the reauthorisation of US Ex-Im
Last week’s blog from CC Solutions focused on US Ex-Im with the title ‘The fate of US Ex-Im Bank’. The blog was a very timely reminder that the agency is in the midst of an extremely heavy reauthorisation battle with US Congress. Sure, there always seems to be a tussle when the reauthorisation comes up, but this year it is different - it is a real battle. There is a big push to get the bank shut down, which is being pushed along by a stream of different bodies and individuals twisting the truth with totally misguided rhetoric, and who have turned this debate into an unnecessary political attack on US Ex-Im as they distort the facts.
As CC Solutions points out, voices of reason need to be heard. US Ex-Im does an incredibly good job for corporate America, and without it a huge amount of export revenue and US jobs would be lost. Trade bodies need to step up to support US Ex-Im, as do corporates and individuals that work with the agency.
Support can be registered through either of these petitions: Ex-Im Thought Bank and Second to None
Corporate Africa on the rise
Hats off to Tanzanian conglomerate Mohammed Enterprises Tanzania Limited (MeTL Group),which last week secured a $200 million loan arranged by Rand Merchant Bank (RMB). Several other banks came into the deal – check those out in the news item. MeTL Group is owned by businessman Mohammed ‘Mo’ Dewji – and the group is expanding fast, contributing to approximately 3.5% of Tanzania’s total annual GDP.
The loan for MeTL came hard on the heels of a $60 million loan for Star Oils Tanzania – a MeTL subsidiary – arranged by Tanzania’s National Bank of Commerce (NBC), Barclays Bank of Mauritius and ABSA.
Quiz question: Somewhat oddly, on the home page of a UK Premier League football club website there is a ‘Visit Tanzania’ button – which takes you through to the Tanzanian Tourist Board. Which club?
Success for Ocean Partners with expanded credit
Base metals trader Ocean Partners UK has expanded and extended its existing revolving credit facility (RCF). The extension increases the existing credit facility by an additional $90 million, and extends it by a further 12 months. With the increase, the borrowing base RCF is now $250 million. The deal was led by ING Bank and ABN AMRO and involves a few others,which you can check out here.
The success of the deal provides the company with good working capital funding for its operations. The facility is used to finance the purchase, storage, blending, sale and related margin financing of metal concentrates that fully covers the blending and trading activities of the company in Taiwan. Congratulations to my good friend of many years Siva Pillay, CFO at Ocean Partners, and the rest of the team there.
TMD FEATURED DEAL: Evraz deal is proof that relationships really matter
Russian steel manufacturer Evraz last week signed a $425 million pre-export finance (PXF) facility with a syndicate of international banks – see tagmydeals for full details.
| Borrower | EVRAZ |
| Deal volume | $425m |
| Deal type | Commodity Trade Finance |
| Sector | Pre-Export Finance |
| Industry | Ores & Alloys |
| Tenor | 5 years |
| Financial close | 11/08/2014 |
| Country | Russian Federation |
| Book runner | Deutsche Bank, ING Bank, Nordea |
| Co-ordinating MLA | Deutsche Bank, ING Bank |
| MLA | Nordea, Raiffensen Bank International (RBI), |
| Rosbank, Societe Generale, ZAO Raiffeisenbank |
TRANCHE 1 |
|||
| Lendor | Role | Ticket size | |
| Deutsche Bank | Co-ordinating MLA | $60.71m | |
| ING Bank | Co-ordinating MLA | $60.71m | |
| Nordea | MLA | $60.71m | |
| Raiffensen Bank International (RBI) | MLA | $60.71m | |
| Rosbank | MLA | $60.71m | |
| Societe Generale | MLA | $60.71m |
| ZAO Raiffeisenbank | MLA | $60.71m |
Although many deals in the Russian market have been shelved as many international banks run for cover, this deal shows how strong some relationships are. Read the full news item here.
The loan is a five-year PXF, and it carries an interest rate of Libor plus 350 basis points. Evraz says the loan will amortise in equal quarterly installments after a grace period of 24 months.
The named borrowers are Evraz Consolidated West Siberian Metallurgical Plant and Evraz Nizhny Tagil Metallurgical Plant. The facility is secured by the borrowers’ export revenues and is guaranteed by the parent company Evraz PLC and Evraz’s trading company East Metals AG.
Junior oil firm Bengal Energy signs loan with Westpac
It’s good to see junior oil firms getting support from some banks. At the end of last week, junior oil exploration company, Bengal Energy, which is focused on India and Australia, agreed final terms for its $25 million secured credit facility with Westpac Institutional Bank. Read more in the news report.
The facility is to be secured by the company's production assets in the Cuisinier field in Australia's Cooper basin, which straddles Queensland and South Australia. The loan is over a three-year term at an unspecified commercial margin over US dollar Libor. The company anticipates final closing of the facility agreement will take place within the next three weeks subject to the satisfaction of the usual closing conditions. So obviously there is more to come at a later date.
JBIC pushes the boat out for UK offshore wind
In something of a landmark deal, Japanese export credit agency, JBIC, signed a UK sterling loan in the first ever offshore wind development project finance by the Japanese agency. Together with commercial banks JBIC signed project finance debt amounting to £369.5 million ($616.5 million) for an offshore wind generation project in the UK.
The loans have been made with the UK project development company Westermost Rough JV Investco Limited (WMR), where Japan’s Marubeni Corporation has an equity stake. JBIC is providing a direct loan of £172.5 million, and the commercial banks involved in co-financing the remaining £197 million. Full deal and commercial details can be found here.
EBRD and banks arrange loan for Ukraine’s Nibulon
As we have seen, relationships matter – hence the A/B structured deal for Ukrainian grain trader Nibulon involving the European Bank for Reconstruction and Development (EBRD). The overall loan is for $130 million, with $30 million coming from EBRD’s own account, and the rest syndicated. So which banks have come on board so far? Find out here. The first two commercial banks in the deal are certainly no strangers to the region and as we have seen above, they definitely value relationships.
Gazprombank repays without any new facility
Last week, Gazprombank repaid its existing syndicated $1.2 billion term loan from its own funds and without moving to any new facility. It is understood that the bank had been trying to refinance the loan in the international bank market before sanctions were announced by the EU and the US in late July.
The Russian bank repaid the loan, which was a three-year facility originally signed with a syndicate of international banks back in August 2011. That loan was taken out with a 14-bank syndicate, and the margin on the transaction was Libor plus 150 basis points. At the time the transaction represented the largest syndicated term loan facility that Gazprombank had ever closed. See more in the news item.
HSBC appoints new GTRF head in Asia
On the personnel front, HSBC has appointed Sriram Muthukrishnan as managing director and regional head of business development for global trade and receivables finance (GTRF), Asia-Pacific.
Based in Hong Kong, he will be responsible for HSBC's global trade and receivables finance business development and client management activities across the global banking and commercial banking corporate segments. Read more on his move here.
ABN AMRO expands commodities team in Asia
In a significant development for ABN AMRO in Asia-Pacific, the bank has appointed three new sector heads to its commodities department in Singapore. The appointees are: Eunice Chin – head of energy Asia; Angeline Tang – head of agri-commodities Asia; and, Priscilla Lee – head of metals commodities Asia. Read more on these moves here. All three will report to Jacqueline Chang, the regional head of commodities Asia
And finally...
Hello France! Are you still on holiday? By the number of unanswered emails that I have sent to French banks etc, I can only assume most of you are still on les grandes vacances. And as one good French friend responded to my remark about the long holidays in the weekly news of 4 August, such long holidays are needed as there is so much good wine and cheese to enjoy! Ha ha, touché! I only wish I was there to enjoy these fine things in life. And while away, there is of course an entertaining old film to watch too on those odd rainy days – actually entitled Les Grandes Vacances – from 1967 and starring Louis de Funès – which is actually quite a good comedy romp. But then again, it is only 85 mins long!
That’s all folks.
Cheers,
JB
