Export finance report 2019: A drastic drop in global ECA-backed deal volume
Overall volumes of global export finance fell by almost 30% last year compared to 2018 according to the full-year TXF 2019 Export Finance Report. Max Thompson reviews the ECA league tables alongside the drivers behind the drastic drop in ECA-backed deal volume, with lower numbers across all major sectors other than oil and gas.
The full-year 2019 edition of TXF Data’s Export Finance market overview is our most representative and comprehensive report yet. During the period covered by this report, TXF Data recorded 328 ECA-backed deals – a decrease of 76 on 2018. This drop in deal flow represented a decrease of 26.7% in ECA supported deal volume compared with 2018.
The total deal volume figures – which can be found in the report which has just been released online for TXF Data subscribers – reflect lower numbers across major sectors other than oil and gas. Oil and gas actually increased by $3 billion in volume despite substantial growth across the non-ECA backed global renewables market.
For example, the ECA-backed aircraft, conventional power and cruise ship sectors – usually stellar sectors for ECA support after oil and gas deals – all dropped significantly by deal volume compared to 2018.
The 2019 Export Finance report’s depressed volumes mirror what was a pretty dire year for ECA business. SACE was the most active ECA according to the 2019 report, with 36 transactions accounting for a total deal volume of $9.82 billion, followed by K-Sure ($8.6 billion/18 deals) and Euler Hermes ($8.49 billion/49 deals).
The top three ECAs in 2019 were between $2 billion to $3 billion shy of the top three ECAs in the previous year in terms of exposure: JBIC topped the 2018 ECA charts with a total volume of $13.74 billion (35 deals), SACE was a close second ($12.83 billion/29 deals) and Bpifrance came in at third on the list ($11.17 billion/20 deals), having dropped to eighth on the 2019 ECA league table with a total volume of $3.85 billion – a significant decrease in exposure of around $7 billion.
JBIC was usurped by SACE for the top spot in 2019, as the Japanese ECA slipped to fourth position last year with a total deal volume of $7.07 billion (29 deals). Chexim was fifth on the ECA league table list in 2019 with a total ECA-backed exposure of $6 billion, while Sinosure didn’t even make it into the top 10. However, it is important to note, TXF Data only captures internationally banked deals covered by Sinosure and Chexim, as Chinese banks (and ECAs) do not submit deals. Therefore, the Chinese ECAs league positons are more reflective of a lack of transparency than a drop off in deal flow.
EKF were sixth on the list, with a total volume of $4.53 billion, driven mostly the Danish ECA’s exposure to the offshore wind sector globally – two large-scale multi-sourced deals in Taiwan come to mind, Yunlin and Formosa 2.
Many ECAs have said while there were fewer deals year-on-year, 2018 was in fact a record year which warps last year’s figures somewhat. Other ECAs point to more opportunities to diversify their exposures in 2019, which has meant a growth in small ticket coverage. Either way, it is fair to say if the €11.4 billion heavily ECA-backed loan to finance Gazprom’s Amur Gas Processing Plant in Russia hadn’t reached financial close at the end of 2019 – overall ECA volumes last year would have made for very bleak reading.
The overall Export Finance report 2019 contains numerous charts and diagrams going into interesting depth as well as looking at the trends evinced by the market with more forensic detail and analysis. We even analyse pricing and tenors – please take a proper look.
The full-year Export Finance report is available for TXF Data subscribers only. If you do not subscribe to us yet and you want to find out more please contact the team by emailing: [email protected].
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