Thomas Rybicki – Peter Licht Commerzbank AG Structured Export & Trade Finance
Absicherungs- und Finanzierungsm öglichkeiten für Projekte der Erneuerbaren Energien in Indien
Commerzbank AGStructured Export & Trade Finance
Thomas Rybicki – Peter Licht Commerzbank AG Structured Export & Trade Finance
1Thomas Rybicki – Peter Licht Commerzbank AG Structured Export & Trade Finance 1
Commerzbank at a glance
Commerzbank is Germany's second-largest bank and pl ays a leading role in German corporate and private bankin g.
Formation: 1870 as "Commerz- und Discontobank" in Hamburg
Total assets: € 533 bn (Q4 2015)
Core Tier 1 ratio: 13.8% (Q4 2015)
Rating: Baa1/P-2 (Moody's)BBB+/A-2 (S&P)
Employees: 52,000 employees worldwide
Customers: 11 million customers worldwide
Branch network: - 1,200 domestic branches
- 23 branches, 35 representative officesas well as other subsidiaries and affiliatedcompanies in around 50 countries
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SETF presence in all major European centres
Representative Offices Operative foreign branchesGroup companies and major foreign holding
New York
Caracas
São Paulo
Buenos Aires
Panama City
Johannesbourg
Addis AbabaLagos
TripoliCairo
Beirut
Dubai
AshgabatBaku
Mumbai
TashkentAlmaty
Novosibirsk
BeijingTianjin
Seoul
Shanghai
Taipei
Tokyo
Hong Kong
Ho Chi Minh CityBangkok
SingaporeJakarta
Santiago de Chile
Kuala Lumpur
Melbourne
Milan
ViennaZurichGeneva
Paris
Barcelona
LuxemburgBrussels
LondonAmsterdam
Istanbul
BucharestBelgrade
BudapestZagreb
BratislavaKošiceBrno
OstravaPlzen
PragHradec Králové
WarsawMinsk
Kiev
MoscowRiga
Madrid
Dublin
Luanda
Tblisi
Dhaka
International Network:
EuropeFrankfurt 45 SpecialistsAmsterdamBrusselsLondonParisMoscowPrague
USANew York
AsiaSingaporeTokyo
Frankfurt
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SETF presence in all major financial centres
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European Network
1 Frankfurt 45 specialists2 Amsterdam3 Brussels4 London5 Paris6 Moscow7 Prague
US PresenceNew York
AsiaSingaporeTokyo
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Export FinanceTrade Finance
Pre-export Finance
Commodity TradeFinance
Borrowing Base
ECA-covered Project Finance
Receivables-backed long-term Export Finance
Privately insured Export / Trade Loans
Cooperation with multilateral Institutions
ECA-covered/uncovered Export Finance
Single-sourced Export Finance
Multi-sourced Export Finance
A unique combination of products allows flexible sol utions to the needs of our client base
Structured Export & Trade Finance
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Structured Export & Trade Finance covers the whole cycle of a transaction
Target:Achieve "bankable" solutions to meet financing requirements in co-operation with all parties involved
Syndication Origination
Financing Arranging
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Structured Export Finance - Products & Markets
Structured Export & Trade Finance Solutions - Structuring – Arranging - Financing
StructuredExport Finance
Single sourcedExport credits
Multi sourcedExport credits
ECA-covered/uncovered
Export Finance
ECA-coveredProject Finance
CommodityPre-Financing
EXPORTER IMPORTER
Borrowing Base
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Structured Export Finance - Products & Markets
Main features of ECA-covered buyer credits
OECD-Arrangement on Officially Supported Export Credits represents binding Framework for medium and long term credits (>2 years)
Tied to the supply of durable capital goods produced in the country of the ECA
Min. of 15% down- and interim payment required
Max. 85% financing to the importer directly or through its bank under ECA-cover
Commerzbank risk-participation depending on the ECA-policy (e.g.HERMES : in general5% of the loan amount for political and economic risk)
Financing of multi-sourced supplies
Financing of foreign content by way of reinsurance with ECA-cover
Standardized handling by means of Basic Loan Agreements with international Borrowers
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Structured Export Finance - Products & Markets
Benefits
Lifetime of ECA-covered loans much longer than that of commercial facilities with positive effects on the structure of the borrower´s balance sheet
Larger credit volumes are achievable
Mitigation of political and economic risk components
– contributing to a competitive pricing with interest based on the international money / capital market rates for EUR / USD
– reliability during long construction periods and thus adding stability to the projectimplementation
Availability of CIRR (Commercial Interest Reference Rate; differs from one exporting country to the other), which is the minimum fixed interest rate, which shall be applied for official financing support for export credits as regulated by the Arrangement on Guidelines for Officially Supported Credits under OECD. Normally with a margin t.b.d. in each case.
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Structured Export Finance - Products & Markets
Phases of a buyer credit
FinancingRequest
Financing Proposal
StartingPoint
RepaymentDisbursement
FinancingMandate
Conclusion ofLoan Agreement
Negotiating- Export
Contract - Financing
proposal
Documentation- ECA-application- Signing of Export
Contract- Negotiating and
Signing of LoanAgreement
Structuring- Parties- Tenor- Pricing- Collateral
FulfilmentofConditionsPrecedent
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Structured Export Finance - Products & Markets
ECA-covered buyer credit (basic structure)
Deliveries and related servicesExporter
Commerzbank
Disbursement of loanamounts pro ratadeliveries made /services rendered
Buyer
ECA
Loan Agreement
Repayment / Interest Payments
Export Contract
Export cover
Export creditcover
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Structured Export Finance - Products & Markets
Exporter Importer
BankLoan Agreement
ECA
Export CreditCover
Export Cover
Repayment / Interest Payments
Repayment / InterestPayments
Deliveries and related services
Export Contract
Disbursement of loanLocal Loan Agreement
Major advantages of an ECA-covered Buyer Credit:
the longer tenor for an ECA-covered financing compared to commercial facilities
diversification and thus expansion of the possible funding sources
Commerzbank’s experience in the ECA business which guarantees a professional approach to the financing and allows a short implementation period until reaching financial close
Commerzbank
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Structured Export Finance - Products & Markets
Co-operation with Export Credit Agencies (ECAs)
AT
FR
DE
US
CH
CZ
DK
BE
NL
FI
SE
GB
LU
KR
NONO
JP
IT
Commerzbank acts as arranger and / or lender of export financings for a large number of Export Credit Agencies
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Experience: more than 25 years of experience and track record in the RE market.
Integrated approach: we service RE corporates as well as projects and has therefore a substantial market overview concerning technologies, companies, RE market structures and latest developments.
Team of specialists: more than 50 employees
Technologies: Focused on proven technologies
Due diligence: Structuring and financing process accompanied professionally; combination of internal expertise and integration of external partners
Risk management: Established internal rating process based on Commerzbank’s long-standing engagement and experience with RE projects; audited and certified by the German regulator
Documentation: Terms and conditions are negotiated on an individual basis.
The division Energy
Countries: Germany, Northern and Western Europe, Poland, U.S. and Canada
Preferred minimum deal size (debt): Germany: EUR 10m Other countries: from EUR 20m., for debt volumes
> EUR 50m: arranging of club deals
Technologies: wind (onshore and offshore), solar (PV and CSP)
Markets / Deal Sizes Renewable Energies
Center of Competence Energies - Renewable Energies F inance
Commerzbank Center of Competence Energy
Corporate Clients RE
Project Finance RE Origination
Project Finance RE Structuring
Business & Transaction Management
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Two-Step-Structure:
- Commerzbank
- State Bank of India, Hong Kong Branch
- Promoter
RE – Potential Cooperation with Indian Banks
Core products:- Recourse/Non-recourse project financings in core
regions ECA*- covered export financings on a global basis.Clients: all corporates of the RE industry such as- Manufacturers - Project developers- Strategic financial investors
Project Finance Renewable Energies
* Export Credit Agency
RE-Project Finance Portfolio 12/2014 – by Region(in bn. EUR – total: 3.99 bn. EUR)
RE-Project Finance Portfolio 12/2014 – by Technology(in percent – 100% = 3.99 bn. EUR)
Other Europe (21%)
0.820.16
North America
(4%)
RoW(6%)
0.25Germany
(69%)
2.76
Solar 22%
Bio 3%
Wind offshore 5% Wind onshore 70%
Center of Competence Energies - Renewable Energies F inance ctd.
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Structured Export Finance - Buyer Credit
Basic requirements for direct lending to corporates
Audited consolidated annual reports in accordance with international accounting standards(IFRS, Indian or US-GAAP) for at least two previous financial years
Any additional information upon request (e.g. list of all shareholders – up to beneficialshareholders / individuals)
Acceptable risk-level as per risk assessment of the lending bank and the ECA
Adequate level of total shareholders‘ equity of the Borrower compared with the loanamount
Additional collaterals
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Structured Export Finance - Buyer Credit
Overview (I)
Borrower: Indian bank off-shore branch on-lending to Indian corporate or, alternatively, Indian corporate
Arranger: Commerzbank AG
Lender: Commerzbank AG, possibly with a consortium of banks
Loan Agreement: between Commerzbank AG and Borrower
Collateral: - ECA-cover- Exporter applies for an export cover
Loan amount: up to 85 % of the export contract value + up to 100% of ECA-related costs+ up to 100% of interest accruing during construction period
Disbursement: for up to 85% of the export contract value directly to the account of theExporter with Commerzbank against presentation of documents under a letter of credit
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Structured Export Finance - Buyer Credit
Overview (II)
> Repayment: depending on underlying supply contract in in up to 20 (re industrialprojects) or up to 36 (re renewable energy projects) equal, consecutive at least semi-annual instalments by the Borrower
Due date for firstRepayment: 6 months after the Starting Point being e.g.
– the mean weighted delivery date,
– the date of the last essential delivery or
– the date of readiness for operation
(dependent on the structure of the export transaction) at the latest on a specific Latest Date to be agreed upon with the ECA .
Interest: Euribor / Libor + margin payable semi-annually in arrears
fixed rate under German CIRR-Scheme, especially for longer tenors
Management Fee: to be payable within 30 days after conclusion of the Loan Agreement,
Commitment Fee: to be payable quarterly in arrears on the loan amount not yetdisbursed
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Structured Trade Finance
Standard structure: A self-liquiditing structure binds the credit to trade flows and controls related exportsproceeds
The Producer fulfils its “repayment obligations” under the Loan Agreement via the delivery of the commodity in line with the terms of the Export Contract
The Buyer’s payment proceeds for the commodity are directly used to repay the loan
➨ The repayment obligation of the Producer is substituted with a performance obligation in combination with a payment obligation of the Buyer
➨ Any inherent transfer and/or conversion risks are mitigated/reduced
Buyer
Bank
Producer5. Payment for the goods
under Export Contract
EMERGING MARKET
2. Loan Agreement
3. Disbursement of Loan
1. Export Contract
4. Delivery of goods
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Synergies from combining Structured Export and Stru ctured Trade Finance
Increasing demand for structured solutions
Combination of Structured Export and Structured Trade Finance in one department creates synergies with regard to
– industry know-how
– structuring know-how
– efficiency (one stop solution)
Creation of attractive collateral structures for banks and ECAs
Opening of opportunities in commodity-/raw material rich markets, e.g. CIS
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Selected transactions 2015
KRAKATAU STEELUSD 250 mECA-covered LoanHERMES
Mandated Lead ArrangerMay 2015
VTB BankEUR 131.5 mECA-covered LoanEKN
Arranger/LenderApril 2015
VTB BankEUR 97.5 mECA-covered LoanFinnvera
Arranger/LenderApril 2015
Banca Poupança e Crédito, AngolaEUR 61 mECA-covered LoanHERMES
LenderMay 2015
Republic of CameroonUSD 56 mECA-covered LoanCOFACE
Mandated Lead ArrangerLenderApril 2015
Republic of the CongoEUR 80 mECA-covered LoanDelcredere - Ducroire
Mandated Lead ArrangerLenderMarch 2015
TatfondbankEUR 10.8 mECA-covered LoanKUKE
Sole LenderMay 2015
Sberbank of RussiaEUR 70 mECA-covered LoanFinnvera
Arranger / LenderDecember 2015
Fitesa Naotecidos S.A.EUR 31 mECA-covered LoanHERMES
LenderAugust 2015
Seabras 1 Bermuda Ltd.USD 245 mTerm LoanHERMES
Mandated Lead Arranger
September 2015
Shubhalakshmi Polyester Ltd., MumbaiEUR 9.75 mECA-covered LoandHERMES
Risk Participant
September 2015
Shubhalakshmi Polyester Ltd., MumbaiEUR 8.64 mECA-covered LoandHERMES
Arranger/Risk Participant
October 2015
Corinth Pipeworks S.A.GreeceEUR 3.97 mECA-covered LoanHERMES
LenderFebruary 2015
Gazprombank JSCEUR 158 mECA-covered LoanHERMES
Mandated Lead ArrangerLenderJune 2015
Banco de Negócios Int. S.A. AngolaEUR 35.46 mECA-covered LoanHERMES
LenderAugust 2015
Reliance Industries Ltd.EUR 950 mECA-covered Club LoanHERMES
Mandated Lead ArrangerDecember 2015
Royal CaribbeanCruises Ltd.EUR 762.881 mECA-covered LoanHERMES
Mandated Lead ArrangerDecember 2015
Royal CaribbeanCruises Ltd.EUR 777.510 mECA-covered LoanHERMES
Mandated Lead ArrangerDecember 2015
Ayen Enerji A.S.EUR 17.560 mECA-covered LoanEKF
Sole LenderJuly 2015
Lender / ParticipantJune 2015
TUI Cruises GmbHMein Schiff 7EUR 476 mECA-covered LoanFinnvera
TUI Cruises GmbHMein Schiff 8EUR 476 mECA-covered LoanFinnvera
Lender / ParticipantJune 2015
Thomas Rybicki – Peter Licht Commerzbank AG Structured Export & Trade Finance
Thomas RybickiCorporate Banking – Structured Export & Trade Financ eSenior Vice President
Tel. +49 69 136 22577Mail [email protected]
Peter LichtCorporate Banking – Structured Export & Trade Financ eSenior Vice President
Tel. +49 69 136 24365Mail [email protected]