Perfect 10 winners 2018: Export finance
This year's winners of the TXF Perfect 10 Export Finance Deals of the Year beat a lot of worthy contenders. Read on to find out why...
From large-scale multisourced financings in the renewables sector in Europe, to a 4G network expansion across India, and an inaugural sustainability-linked deal in the Ivory Coast for a water supply plant, TXF’s Perfect 10 Deals of the Year comprise only landmark financings within the export finance community in 2018.
Half of TXF’s Perfect 10 Deals of the Year 2018 took place in the oil and gas sector, with several viable financing templates emerging for both serial and debut ECA-backed borrowers from around the world.
But the most prevalent theme across last year’s award winning deals was the record-low pricing under the ECA debt portions, with margins ranging from 70bp to 300bp, and even as low as 82bp all-in. This was good news for ECA-backed borrowers as such low pricing has firmly placed ECA finance as an attractive instrument in their financial toolkit. But with ECA premiums often expected to be paid upfront for the maturity of large project loans, ECA tranches were in some cases cut bank by sponsors, especially when the uncovered tranches came in cheaper.
Please download TXF's Perfect 10 2018 report in pdf form here.
Despite an uncertain economic backdrop, sponsors of the DUQM refinery forged the first venture of its kind and successfully closed the largest project financing in the EMEA region in 2018 as well as the largest ever project financing in the Sultanate of Oman. The project marks an important milestone in the diversification of Oman’s economy.
Sponsors: Oman Oil, Kuwait Petroleum International
Debt: $4.61 billion
Tenor: 17 years
Pricing: CESCE tranche 150bp, UKEF tranche 100bp, Commercial bank tranche 225bp
Financial close: 1 November 2018
ECAs: CESCE, KEXIM, UKEF
MLAs: BNP Paribas, Credit Agricole, Credit Suisse, HSBC, Intesa Sanpaolo, KfW IPEX, MUFG, Natixis, Santander, Societe Generale
Financial advisor: Credit Agricole, Greengate
Banks: Ahli Bank Oman, Ahli United Bank, Apicorp, Banca IMI, Bank Dhofar, Bank Muscat, Bank Sohar, Boubyan Bank, Commercial Bank Of Kuwait (CBK), ICBC, Intesa Sanpaolo, Korea Development Bank (KDB), Kuwait Finance House, National Bank of Kuwait, National Bank of Oman, Qatar National Bank ( QNB Group ), Standard Chartered, Sumitomo Mitsui Banking Corporation (SMBC), UBI Banca - Unione di Banche Italiane, Warba Bank
Legal (borrower): Allen & Overy
Legal (lender): Latham & Watkins
Aimed at reducing Egypt’s dependency on refined oil products the project pushed through adversity to achieve a sovereign guarantee from the Egyptian ministry of finance. Its success marks the harmonisation of two nations.
Sponsor: Middle East Oil Refinery Company (MIDOR)
Exporter: Technip Italy
Debt: $1.2 billion
Tenor: 13.6 years
Financial close: 14 October 2018
MLAs: BNP Paribas Fortis, Cassa Depositi e Prestiti, Credit Agricole
Financial advisor: National Bank of Egypt, First Abu Dhabi Bank
Legal (borrower and guarantor): Dechert; Zaki Hashem & Partners
Legal (lender, SACE and SIMEST): Shalakany; Shearman & Sterling
The largest project financing for European infrastructure in 2018 and an important string in the bow of the wider Southern Gas Corridor scheme. The TAP project will offer a new source of competitively priced gas marking a key shift away from Russian oil and gas dependence.
Sponsors: BP, SOCAR, Statoil, Fluxys, Total, E.ON, Axpo
Debt: $4.25 billion
Tenor: 16.6 years
Financial close: 7 December 2018
ECAs: Bpifrance, Euler Hermes, SACE
DFI: EBRD, EIB
Financial advisor: Societe Generale
Banks: Bank of China, BNP Paribas, CaixaBank, Credit Agricole, Helaba, ING Bank, Intesa Sanpaolo, Korea Development Bank (KDB), Mizuho, MUFG, Natixis, Siemens Bank, Societe Generale, Standard Chartered, SMBC, UBI Banca - Unione di Banche Italiane, UniCredit
Legal (borrower): Allen & Overy
Legal (lender): Clifford Chance
The first transaction in which South Korean ECA K-sure provided direct support to a Russian sponsor, the pathfinder deal enabled Lukoil to tap into the Asian financial market as well as opening up future opportunities for Korean exporters.
Sponsor: Lukoil Overseas Uzbekistan
Exporter: Hyundai Engineering
Debt: $660 million
Tenor: 11 years
Financial close: 19 April 2018
Banks: Deutsche Bank, ING, UniCredit
Legal (borrower): Akin Gump Strauss Hauer & Feld
Legal (lender): Allen & Overy
Despite a period of political uncertainty both in Peru and Spain, PetroPeru’s Talara refinery expansion closed the largest ECA financing in Peru’s history. The record-breaking financing was also the largest transaction ever covered by Spain’s CESCE.
Debt: $1.3 billion
Tenor: 13 years
Financial close: 31 January 2018
MLAs: BBVA, BNP Paribas, Citi, Deutsche Bank, HSBC, JP Morgan, Santander
Legal (borrower): Skadden, Arps, Slate, Meagher & Flom
Legal (lender): Allen & Overy
From ironing out internal legal procedures for smoother public sector procurement, to sealing a landmark deal for Senegal’s energy transportation and distribution network expansion, state-owned Societe d'Electricite du Senegal's (Senelec) debut ECA-backed loan in 2018 – a €220 million ($247 million) Bpifrance-backed buyer’s credit facility – has provided a viable financing template for future Senegalese projects.
Debt: €220 million ($247 million)
Tenor: 12 years
Pricing: 204bp fixed rate
Financial close: 31 January 2018
Exporters: Vinci Energies; Cegelec Maroc
MLAs: Banque Internationale pour le Commerce et l'Industrie du Sénégal Société Anonyme (BICIS), BNP Paribas, Bpifrance Financement, and Credit Agricole CIB
Legal advisors: Hogan Lovells; Mame Adama Gueye & Associes (MAGA)
Vietnam witnessed its inaugural ECA-backed corporate deal in 2018 after automotive start-up, VinFast, made a strongly priced debut in the ECA market.
Debt: $950 million ECA-backed buyer’s credit facility
Tenor: 12 years
Pricing: 75bp excluding Hermes premium
Financial close: 25 September 2018
ECA: Euler Hermes
Lead arranger: LBBW
MLAs: HSBC, Credit Suisse
Legal (borrower): Norton Rose Fulbright
Legal (lenders): Allen & Overy
Reliance Jio Infocomm drew on its strong relationship with K-sure to close a tightly priced $1 billion ECA-backed loan in under three months to fund its expansion of a pan-India 4G network.
Borrower: Reliance Jio Infocomm
Exporters: Samsung Electronics; Ace Technologies
Debt: $750 million
Tenor: 12 years
Pricing: 82bp all-in
Financial close: 22 June 2018
Facility agent: HSBC
MLAs: ANZ, BNP Paribas, Commerzbank, Credit Agricole Corporate and Investment Bank, HSBC, ING Bank, JP Morgan, Mitsubishi UFJ Financial Group (MUFG), Mizuho, Nonghyup Bank, Santander, Sumitomo Mitsui Banking Corporation (SMBC)
Legal advisors(s): Bae, Kim & Lee; Baker & McKenzie; Juriscorp; Milbank,Tweed, Hadley & McCloy
Winning TXF’s Best Sustainable ECA-backed deal of the year award, the Ministry of Economy and Finance (MoEF) of the Republic of Ivory Coast sealed a sustainability-linked DFI/ECA-backed facility for a water supply plant in Abidjan, the first such deal in the West African country.
Borrower: Ministry of Economy and Finance of the Republic of Ivory Coast
Contractors: PFO Africa; Veolia Africa
Debt: €253 million ($280 million)
Tenor: 3, 7, and 12 year tranches
Financial close: 18 December 2018
ECA/DFIs: Bpifrance A.E and West African Development Bank
Facility agent: Societe Generale
MLAs: Bpifrance and Societe Generale
Legal advisors (lenders): Herbert Smith Freehills
TXF’s Best ECA-backed Renewables Deal of the Year, Global Infrastructure Partners' (GIP) EKF-backed acquisition loan for a stake in the Hornsea 1 offshore wind project in the UK, has introduced a new asset class to institutional investors – with significant construction risk.
Borrower: Global Infrastructure Partners
Debt: £3.6 billion ($4.6 billion)
Financial close: 26 November 2018
Financial advisor: Citi
Facility agents: RBS/Natwest, IFC, Proparco
MLAs: ABN AMRO, Banca IMI, Barings, BNP Paribas Fortis, Citi, Credit Agricole CIB, ING Bank, KfW IPEX-Bank, Legal & General Investment Management, Lloyds Bank, M&G Investments, Macquarie Capital , Mizuho, MUFG Bank, NatWest, Pension Insurance Corporation, PFA (Pension Forsikrings Aktieselskab), Santander, Scottish Widows, Siemens Bank, Societe Generale, Sumitomo Mitsui Banking Corporation (SMBC), Sun Life Investment Management, TD Asset Management, The Norinchukin Bank, Vantage Infrastructure, Westbourne
Legal advisors: Allen & Overy; Slaughter & May; Watson, Farley & Williams and Clifford Chance
Now time to get up to speed on the markets.
Here's our exclusive TXF Essentials subscriber content
Guinea mining: DFI/ECA-backed loan boosts bauxite mine project
DFI loans and a direct loan from Canada’s EDC have enabled commercial banks to push the tenor on Guinea Alumina Corporation’s greenfield mining project financing.
Expert briefing: I just don’t see it folks! Why blockchain consortia may be wrong on trade
Markus (Maex) Ament is at odds with the private/permissioned route that most blockchain consortia are taking to blockchain in general, and trade and supply chains in particular. He explains how they may be repeating the same mistakes made by the early internet and potentially creating bigger, not smaller, silos.
A tastier dish for investors in trade assets: Will HSBC and AllianzGI make for a better spread?
When the self-styled biggest global provider of trade finance teams up with a large European asset manager to wrap European trade finance assets and lend to institutional investors, it should be a winning combination. But how can HSBC and Allianz Global Investors avoid the pitfalls of the past? TXF spoke to HSBC’s Surath Sengupta and AllianzGI’s David Newman to find out.
Shop talk: East African geothermal picks up steam
Geothermal power projects in East Africa have been gaining traction after a handful of heavily DFI-backed projects reached financial close. TXF spoke with Darrell Boyd, CEO at TM Geothermal, to discuss the region’s growing pipeline of projects, and why ECAs are yet to join the funding mix.
Plus, to top things off...
the news you thought you had but didn't
Senelec to close ECA-backed deal imminently
Senegalese state-owned electricity utility Senelec is expected to reach full financial close this month on an approximately €100 million ($111 million) Bpifrance-backed facility to finance the expansion of the African country’s electricity grid.
Asahan 1 hydro refinancing gains commitments
Bajradaya Sentranusa (BDSN) – a joint venture between Fareast Green Energy, IFC, Pembangkitan Jawa Bali (PJB) and RH International – has received commitments from existing lenders for the refinancing of its 180MW Asahan 1 hydro project in Indonesia.
RFPs to launch for Egypt's $1.9bn Assuit oil refinery
Assuit Oil Refining Company (AORC), a subsidiary of state-owned Egyptian General Petroleum Corporation, is expected to launch request for proposals (RFPs) to prospective lenders this month to finance the $1.9 billion Assuit oil refinery expansion project in Egypt. Bank mandates are targeted for H2 2020.
Formosa 2 out to banks for indicative pricing
Potential lenders to the 376MW Formosa 2 offshore wind project in Taiwan have until mid-June to respond to a request for indicative pricing and commitment sizes from deal coordinator Societe Generale.
Auramet reprises 2018 RCF debut
Metals trader and boutique financing house Auramet Trading and Auramet International have closed a $190 million one-year syndicated revolving credit facility – an upsizing and renewal of the $185 million on-year debut RCF they closed last year.
Ital Gas Storage refinancing out to lenders
The 1.3 billion cubic metre Ital Gas Storage project in Italy – sponsored by Morgan Stanley Infrastructure (93%) and Whysol Investments (7%), and with financial advisory from Arcus – is said to be out to banks for an amend-and-extend on the pricing and tenor of up to €1 billion of its original project debt.
EPH refinances Italian biomass portfolio
Czech integrated energy utility EPH has closed a €130 million ($146 million) debt facility for its Italian biomass portfolio.
New Zealand wind farm to sound out banks
Joint sponsors of a 16MW wind farm to power a hydrogen-production plant in New Zealand – Hiringa Energy and Ballance Argi-Nutrients – are in the process of sounding out banks to fund the scheme.
Jordan to select bidders for 50MW wind tender imminently
Jordan’s Ministry of Energy & Mineral Resources is close to selecting the preferred bidders for a 50MW wind tender under its round three renewables programme.