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Presentation for xxxxxxxxx Date STRUCTURED FINANCE – EXPORT FINANCE.

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Presentation on theme: "Presentation for xxxxxxxxx Date STRUCTURED FINANCE – EXPORT FINANCE."— Presentation transcript:

1 Presentation for xxxxxxxxx Date STRUCTURED FINANCE – EXPORT FINANCE

2 STRUCTURED FINANCE - EXPORT FINANCE Page 2 Agenda 1.Facts & Figures about BayernLB3 2.Export Finance at BayernLB 6 3.Export Finance Transactions 14 4.Typical Types of Financing21 5. References and Awards29 Page

3 STRUCTURED FINANCE - EXPORT FINANCE Page 3 Facts & Figures about BayernLB

4 STRUCTURED FINANCE - EXPORT FINANCE Page 4 Group Corporate Structure of BayernLB Association of Bavarian Savings Banks Bayerische Landesbank Legal corporation incorporated under public law Free State of Bavaria AAA/Aaa¹ BayernLB Holding AG 5.97%94.03% 100% 89.9%100% 100% state guarantee ¹ ¹ Standard & Poors, Moodys 100%

5 STRUCTURED FINANCE - EXPORT FINANCE Page 5 Highlights 2010 – key messages Investors benefit from good operating earnings Deleveraging: Substantial reduction of risks, costs and total assets Well capitalized – even under the new Basel III regime Well balanced funding potential and moderate needs 2 All earnings before taxes came from core activities 1 Solid earnings before taxes of EUR 885m in 2010 BayernLB is one of the leading corporate financiers with good loan quality BayernLB is on track with its customer oriented business model

6 STRUCTURED FINANCE - EXPORT FINANCE Page 6 Export Finance at BayernLB

7 STRUCTURED FINANCE - EXPORT FINANCE Page 7 Part of Structured Finance Board: Jan-Christian Dreesen Structured Finance Alexander von Dobschütz Infrastructure Michel Rousseau Energy Andy Brown Dr. Paul Kunkel Beate Mayer CIS / CEE / SEE / Baltics Elke Wurth-Weis New York Branch James King Project Finance Export Finance Leasing, Factoring, Rolling Stock EMEA, Americas, Asia Ralf Engelberg

8 STRUCTURED FINANCE - EXPORT FINANCE Page 8 Export Finance Department Beate Mayer (Head of Department) Tel.:+49 (89) Volker Kuntz (Senior Specialist) Tel.:+49 (89)

9 STRUCTURED FINANCE - EXPORT FINANCE Page 9 The Team Herta Albert Tel.:+49 (89) Hans Grutza Tel.:+49 (89) Doris Wimmer Tel.:+49 (89) Andreas Lettow Tel.: +49 (89) Evan Sirowinski Tel.:+49 (89) Elke Wurth-Weis Tel.:+49 (89) The Team Section CIS / CEE / SEE / Baltics Richard Lawrynowicz Tel.: Harm Clasen Tel.: Export Finance

10 STRUCTURED FINANCE - EXPORT FINANCE Page 10 What are our Strengths? People Export & Trade Finance experience for more than 30 years Supporting growth of our customers in their markets in the long run Structuring capabilities Large underwriting capabilities Placing / syndication power Tailor-made solutions and services Know how in specific regions (Europe, CIS, Asia, N&M East, Americas) Expertise in specific sectors (Utilities, Metals, Oil/Gas, Telecom, M&E, Aviation) Dedicated staff in key markets Competence Long-term relationship

11 STRUCTURED FINANCE - EXPORT FINANCE Page 11 What are our Products? Trade Finance Multi-source financing of up to 100% of project value long tenors (often > 10 years) Lending on basis of corporate risk Credit enhancement by ECA and/or PRI and/or off-take structures Structured Export Finance Documentary business Short term trade finance (e.g. advances, post-shipment finance) Forfaiting Hedging instruments for FX, interest and commodities Emission Certificates (Joint Implementation Certificates, Clean Development Mechanism) Emission trading Consulting and advisory services Cross-selling products

12 STRUCTURED FINANCE - EXPORT FINANCE Page 12 Who are our Partners? Trade Finance Exporters Importers Export Credit Agencies (ECAs) Private Risk Insurance Companies Commercial Banks Multinational Finance Institutions (MFIs) Exporters Trading Companies Commercial Banks Off-takers Private Insurance Companies Structured Export Finance

13 STRUCTURED FINANCE - EXPORT FINANCE Page 13 Our Main Partner Banks in Russia Advantages: Efficient Work Flow Close Cooperation International Documentation Standards Track Record Existing Basic Agreements for ECA covered Buyers Credits

14 STRUCTURED FINANCE - EXPORT FINANCE Page 14 Export Finance Transactions

15 STRUCTURED FINANCE - EXPORT FINANCE Page 15 Risks and Time Flow Acquisition Purchase / Production Purchase / Production Delivery/ies Term of Payment t0 tn t1t2 Suppliers Credit Buyers Credit Disbursement Period Repayment Period Forfaiting Assembly / Acceptance Warranty Conclusion of Contract Average Delivery Date Readiness for Operation Political Risk: war / riot / confiscation ban on imports / embargo risk of conversion and transfer of currency interdiction of payment / moratorium Commercial Risk: insolvency non-payment (protracted default)

16 STRUCTURED FINANCE - EXPORT FINANCE Page 16 Good operating business – BayernLB back on track Payment Conditions in Export Contracts currency (EUR / USD / CHF) handling of payments / payment instrument (e.g. L/C) payment conditions according to OECD consensus place of payment type of payment collateral (e.g. guarantees) allocation of costs for handling of payments allocation of costs for payment collateral allocation of costs for financing payment of the ECA premium

17 STRUCTURED FINANCE - EXPORT FINANCE Page 17 Governmental Support for Exports: OECD Consensus Gentlemens Agreement of the OECD countries about rules of governmental support of exports Target: avoid distortion of competition Valid for all state-aided export finance transactions with a credit period of more than 2 years (National) Export Credit Insurance (ECA) Direct credits or refinancing schemes Subsidies for interest payments Insurance against unlawful claim of guarantee Instruments

18 STRUCTURED FINANCE - EXPORT FINANCE Page 18 OECD Consensus (contd) min. 15 % of the contract value Down / Interim payments 85% of the contract value covered by ECA 10 years maximum tenor (for category II countries) Repayment in equal, semi-annual instalments, the first to be due 6 months after Starting Point e.g. last essential delivery, mean weighted delivery, readiness for operation

19 STRUCTURED FINANCE - EXPORT FINANCE Page 19 Euler Hermes Kreditversicherungs AG, Hamburg German Export Credit Agency (ECA) manages the official export credit guarantee scheme on behalf and for account of the Federal Government, such scheme granting coverage of political and commercial risks resulting from receivables and loans agreed in foreign contracts. Vital preconditions for granting cover: Eligibility of goods (deliveries / services must substantially be of German origin (foreign content max %)) Fungibility of risks / no public budget constraints Application for cover needs to be filed before conclusion of contract OECD conform payment conditions

20 STRUCTURED FINANCE - EXPORT FINANCE Page 20 Multi Source / ECA Desk Multi Source / ECA Desk Bayern LB is Partner for Public Export Credit Agencies (ECAs)

21 STRUCTURED FINANCE - EXPORT FINANCE Page 21 Typical Types of Financing

22 STRUCTURED FINANCE - EXPORT FINANCE Page 22 ECA-covered Buyers Credit Definition:the principal bank of a foreign contractual partner of the exporter (buyer) or the buyer is granted a loan whereas the borrowed funds are disbursed directly to the exporter for payment of the purchase price Loan Amount:85% of the contract value plus 100% of the ECA premium plus part of local costs if eligible for ECA cover Additional uncovered financing possibilies: possible financing of the down/interim payments qualified financing of remaining local costs

23 STRUCTURED FINANCE - EXPORT FINANCE Page 23 ECA-covered Buyers Credit (contd) Additional Collateral required by the ECA: Exporters undertaking Financial statements according to IRFS in case the buyer is acting as borrower Guarantees (as the case may be) Pledge of assets (as the case may be)

24 STRUCTURED FINANCE - EXPORT FINANCE Page 24 Exporter Importer (Buyer) ECA (Export Credit Agency) ECA (Export Credit Agency) Domestic Bank (Borrower) Domestic Bank (Borrower) Buyers Credit Export Contract ECA Cover ** 15% Cash Down and / or Interim Payment * Repayment Disbursement of 85% through L/C pro rata deliveries / services * potential uncovered financing of down payment / interim payments ** potential ECA premium financing L/C advising Opening of L/C Bayern LB Loan Agreement Scheme: Buyers Credit (bank)

25 STRUCTURED FINANCE - EXPORT FINANCE Page 25 Exporter Importer (Buyer) Borrower Importer (Buyer) Borrower ECA (Export Credit Agency) ECA (Export Credit Agency) Domestic Bank Loan Agreement / Buyer's Credit (tied export credit) Export Contract ECA Cover ** Guarantee support (optional) 15% Cash Down and / or Interim Payment * Repayment Disbursement of 85% through L/C pro rata deliveries / services * potential uncovered financing of down payment / interim payments ** potential ECA premium financing L/C advising Opening of L/C Bayern LB Scheme: Buyers Credit (corporate)

26 STRUCTURED FINANCE - EXPORT FINANCE Page 26 Suppliers Credit Forfaiting Suppliers Credit: The supplier is granting a loan to the foreign buyer by by way of concession of a grace period for payment. This period may be refinanced via forfaiting. Forfaiting: Purchase without recourse of abstractly documented receivables, e.g. receivables from bills of exchange deferred payment letters of credit book claims The bank takes over the commercial and political payment risk

27 STRUCTURED FINANCE - EXPORT FINANCE Page 27 Forfaiting (contd) Requirements for Forfaitability: Additional collateral as might be required by the ECA or the bank Export contract has to allow assignment of claims Export contract has to foresee yearly presentation of financial statements according to IFRS Purchased claims have to be free of objections and/or counterclaims under the export contract

28 STRUCTURED FINANCE - EXPORT FINANCE Page 28 Forfaiting Agreement 1a. Export Contract 2. Term of Payment 1b. ECA cover Remittance of Interest and Repayment Amounts 5. Interest and Repayment À-forfait Purchase and Disbursement German Exporter Buyer / Payment Obligor ECA (Export Credit Agency) ECA (Export Credit Agency) BayernLB 3a. Assignment of Claims from - the Export Contract - the Exporters ECA cover - L/C or Payment Guarantee b. Scheme: Forfaiting

29 STRUCTURED FINANCE - EXPORT FINANCE Page 29 References and Awards

30 STRUCTURED FINANCE - EXPORT FINANCE Page 30 Deal Highlights EUR 115,500,000 Export Finance Facility OAO Kabbalkgips Mandated Lead Arranger (Russia) 2010 Mandated Lead Arranger (Turkey) EUR 149,351,984 Euler Hermes covered Export Finance Facility 2010 Lead Arranger EUR 26,205,806 Wind Energy Converters Turkey Export Credit Facility Euler-Hermes Cover 2010 EUR 1,878,700,000 6 submarines Type 214 Hermes covered Export Finance Facility Undersecretariat of Treasury Mandated Lead Arranger 2010 Mandated Lead Arranger (Russia) EUR 1,500,000,000 Syndicated Pre Export Finance 2010 Mandated Lead Arranger (Russia) EUR 325,000,000 for SIF Revolving Collateralised Loan Facility 2010 Participating Lender (Hungary) USD 475,000,000 Issuance of Import LOCs ,900,000,000 Gas Pipeline Baltic Sea Region Mandated Lead Arranger 2010

31 STRUCTURED FINANCE - EXPORT FINANCE Page 31 Deal Highlights (contd) EUR 255,000,000 EBRD A/B-Loan Facility First project under new Sustainable Energy Action Plan Mandated Lead Arranger (Kazakhstan) 2008 USD 80,500,000 Road Infrastructure Export Finance Facility Co-Arranger (Azerbaijan) Azeryolservis OJSC 2008 Indramayu Power Project USD 592,224,258 Export Credit Facility Sinosure Cover Senior Lead Arranger (Indonesia) 2008 Jamshedpur Expansion Project EUR 264,000,000 Export Credit Facility Euler-Hermes Cover Mandated Lead Arranger (India) 2009 EUR 69,892,500 Wind turbine generators EulerHermes covered Export Finance Facility Lead Arranger (Turkey) 2009 EUR 262,350, 000 Fantanele Windfarm MW Euler Hermes covered Export Finance Facility Tomis Team / M.W. Team Invest Agent & MLA 2009 Vyksa Steel Works EUR 346,920,200 Euler Hermes covered Export Finance Facility Mandated Lead Arranger (Russia) 2009 EUR 524,000,000 Multi-Source Master Export Finance Facility Mandated Lead Arranger (Russia) 2009

32 STRUCTURED FINANCE - EXPORT FINANCE Page 32 Deal Highlights (contd) Participating Lender (Russia) USD 50,000,000 Refinancing of the Leasing Portfolio 2007 USD 47,500,000 Euler Hermes Covered Export Finance Facility Sole Lender (Kazakhstan) LLP KaR-Tel 2008 Mandated Lead Arranger (Russia) USD 300,000,000 EBRD A/B-Loan Facility Environmental Loan 2007 EUR 218,000,000 Export Credit Facility Finnvera-covered Mandated Lead Arranger (Russia) 2007 CHF 45,000,000 Refinancing of the Leasing Portfolio Participating Lender (Russia) 2008 EUR 60,000,000 Euler Hermes Covered Export Finance Facilities Sole Lender (Russia) 2008 Mandated Lead Arranger (Russia) EUR 278,800,000 Euler Hermes covered Export Finance Facility 2008 Arranger (Russia) EUR 600,000,000 EBRD A/B-Loan Facility Energy Efficiency Loan 2008

33 STRUCTURED FINANCE - EXPORT FINANCE Page 33 Deal Highlights (contd) EUR 300,000,000 Power Project Export Finance Facility AzerEnerji JSC Mandated Lead Arranger (Azerbaijan) 2005 USD 307,237,810 Commercial Loan + USD 174,606,198 Export Finance Euler-Hermes Cover Participant (Turkey) 2007 EUR 613,000,000 Ermenek Dam and HEPP OeKB covered Export Finance Facility plus Commercial Loans Lead Arranger Undersecretariat of Treasury 2002 EUR 185,000,000 HERMES-covered EUR 74,500,000 SACE-covered USD 238,000,000 Finnvera-covered Mandated Lead Arranger (Russia) 2005

34 STRUCTURED FINANCE - EXPORT FINANCE Page 34 International Awards (since 2009) Trade Finance Deal of the Year Awards 2009 Russia - NLMK - ECA-backed financing Russia - Vyksa - ECA-backed financing Trade & Forfaiting Review - Deal of the Year Awards 2009 Russia - NLMK – ECA-backed financing

35 STRUCTURED FINANCE - EXPORT FINANCE Page 35 Awards Project Finance since 2009 Category:Deal of the Year R1 – Europe Infrastructure Deal of the Year M25 – Europe PPP Deal of the Year Dolphin – Middle East Oil & Gas Deal of the Year Shuweihat – Gulf Power Deal of the Year Nord Stream – Gas Deal of the Year Centrica/TCW Windfarm Portfolio – Portfolio Deal of the Year GSM-Rail – Europe Telecoms Deal of the Year Castor – Europe Oil & Gas Deal of the Year Barka III & Sohar II – Middle East Power Deal of the Year GTR Best Deals of 2009


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