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10 February 2014

JB's weekly round-up - 12 February 2014

Hoorah, the winter Olympics are underway, and thank you Mr Deripaska et al and other mega-rich Russians for involvement in the infrastructure development there.

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

That was the week that was…

Huck it with trade in 2014

Hoorah, the winter Olympics are underway, and thank you Mr Deripaska et al and other mega-rich Russians for involvement in the infrastructure development there.

So why huck it in 2014? One British slope-style snowboarder finalist – the highly talented Billy Morgan – was interviewed by the BBC after his event where he said: “I just thought huck it”. The good old BBC, thinking he had said something else immediately cut him off and apologised to viewers for the non-existent expletive. 'Huck it' is in fact a slang term used by snowboarders to describe 'going for it'.

So at TXF, we will huck it in 2014. We hope you can saddle up and do the same in the year of the horse.

Pastures new

~Investec^ has had a real coup on the personnel front with the hiring of John Neblo as its new head of structured cross border finance for the Americas (TXF News 5 February 14). Neblo was previously at ~PEFCO^ and ~ABN AMRO^. Investec also looks set to hire Mark Paton from ~ANZ^.

In other moves, Manoj Menon has joined First Gulf Bank in Abu Dhabi as the bank’s new global head of transaction banking (TXF News 7 February 14). He was previously with RBS.

Pushing the boundaries

Last week saw the first commodity trader refinancing of the year make some headway with the $4 billion revolving credit facility for Trafigura moving ahead in the market (TXF News 3 February 2014). Of course any deal involving Trafi is always sensitive so little is said – and bankers are keen to point out that the company is the most shy of all the traders. That aside, most traders are trying to push the boundaries over pricing, and it appears in this case that Trafi has had a good deal of success.

Reports from the grapevine reveal that Trafi has secured a substantial reduction on this year’s two tranche (one year and three-year) deal. Check out the detail on our news website – it is free to register for those in the industry. Around 200 bankers attended the initial bank meeting, and commitments are now coming in strong and fast – all indicating that banks are hungry for deals with good borrowers. This year we can expect to see some banks try to make up for some of the lost ground from 2013 – but just how far they are prepared to go with borrowers continuing to push the boundaries on margins and structure remains to be seen. At some stage, a line does have to be drawn in the sand.

In other commodity-related news, Russia’s Gazprom Neft reported that it had been reviewing the company’s debt structure (TXF News 6 February 2014). With a total debt portfolio of $9 billion, ~Gazprom Neft^ reveals that through 2013 it improved its average repayment terms - with this now standing at 5.13 years. Of course, the most recent loan entered into by the company was the $2.5 billion club facility with international banks in December 2013 (TXF News 3 December 2013). The margin on that facility is Libor plus 150 basis points.

Good if you can get it

The ~Japan Bank for International Cooperation^ (JBIC) and ~Nippon Export^ and ~Investment Insurance^ (Nexi) continue to provide rampant support for their country’s exporters and overseas subsidiaries. Of particular note last week was the overall $430 million financing for India’s National Thermal Power Company (NTPC), where the borrower achieved a door-to-door tenor of 15 years (TXF News 4 February 2014).

The financing, which was done through a co-financing with ~SMBC^, is made up of two deals – one for $350 million and the other for $80 million. The funds support the supply of gas turbines and control systems from ~Mitsubishi^ Heavy Industries. The transaction is the first time that JBIC has ever supplied a direct loan to NTPC, India’s largest power provider.

The shipping sector turned out to be all the rage for KfW IPEX-Bank last week, with a flurry of activity financing vessels from German shipyards. In the first instance, the bank is financing Quantum III for ~Royal Caribbean Cruise^ Lines (TXF News 6 February 14). The vessel will be one of the largest cruise ships ever built. It accommodates 4,200 people – strewth! Personally, I can’t think of a worse holiday!

In another deal arranged by ~KfW IPEX-Bank^, the bank financed the latest river cruise vessels for Viking River Cruises in a $393 million deal (TXF News 7 February 2014). ~Credit insurance^ was provided by ~Euler Hermes^ in both of the KfW transactions.

Breaking the ice….

Continuing with the shipping theme, VTB has provided bank guarantees  amounting t $167 million to facilitate the supply of an ice-breaking vessel to the Finnish Transport Agency (TXF News 3 February 2014). The guarantees are with Arctech Helsinki Shipyard in which Russia’s ~United Shipbuilding Corporation^ (USC) has a major shareholding.

Yet even more maritime deals hit the water last week, with Mizuho and Itau BBA arranging the $150 million financing for Brazil’s GranEnergia to take delivery of the highly-tuned multi-service vessel Olympia (TXF News 3 February 2014). GranEnergia will be leasing the vessel to Petrobras for work on the Campos Basin oil field.

And finally…

This month sees the publication of Financing Trade and International Supply Chains by Gower Publishing (TXF News 7 February 2014). The book is written by Alexander Malaket. This is a book long overdue for the trade industry, and Malaket has nailed it for users and practitioners alike. It is a gem, so go out and buy it!

All the best,

Jonathan Bell

Editor in Chief

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