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Deal: Aktif Bank – Islamic Trade Finance
Aktif Bank gets support from ITFC
Borrower: Aktif Bank
Amount: $45 million
Tenor: 12 months
Lawyers: IDB In-House
The International Islamic Trade Finance Corperation (ITFC) has signed a $45 million Murabaha Agreement with Aktif Bank aimed at supporting Turkish exporters. It is part of the ITFC's promotion of trade among Organization of Islamic Conference (OIC) member countries.
A Murabaha facility is a type of Sharia-compliant financing that involves a sale where the seller declares the original cost of what is for sale and the mark-up. The requirements for Islamic transaction are fulfilled by presentation of export declaration forms containing required information and assuring delivery of goods financed.
This deal is unique as an export finance line for a commercial investment bank. The lender financed Aktif Bank’s export transaction. The introduction of this scheme will open up doors for Islamic banks to engage more and more in export financing.
Before this line, the borrower did not have an export financing programme. With this financing, the borrower developed a new business line for its existing clients, hence providing an additional product. This deal is unique as an export finance line for a commercial investment bank.
Since its inception in 2008, the ITFC has already extended $1.6 billion in trade finance to Turkey.
In 2013, Turkey accounted for 11% of the global trade finance market. Global trade finance volumes totalled $124.1 billion in 2013, of which $14.1 billion – or 11% – came from Turkey, according to Dealogic’s Trade Finance Review. It was the first year that Turkey has made up the largest slice since 2001.
The growth comes amid broad economic reforms that aim to boost the nation's gross domestic product to $2 trillion and increase foreign trade volumes to $1 trillion by 2023.
Deal: CMA CGM – trade and supply chain
Asian banks mandate CMA CGM deal
MLAs: Industrial and Commercial Bank of China (Asia) Limited, Bank of China Limited
Borrowers: CMA CGM
Amount: $920 million
Tenor: 12 years
Public Finance Institution: Sinosure
Lawyers: Mayer Brown JSM, Hogan Lovells
Exporter: CIMC Leasing (Hong Kong) Limited
The deal has not only solved the exporter’s regular financing pressure, but is also based on the adjusted financing structure to optimise the exporter’s financial statements. The most important difference from regular operating lease structure is that the lender arranged an investment fund to hold all of the ships to optimise the exporter’s statement. This improved the regular operating lease structure, improving finance conditions for both importer and exporter.
Founded in Marseille in 1978 by Jacques Saadé, the CMA CGM Group is the third-largest container shipping company worldwide and number one in France. From its base in Marseille, the CMA CGM Group is present in more than 150 countries through a network of over 650 agencies, with more than 20,000 employees worldwide. Some 4,500 are in France.
With a diversified fleet of 445 vessels, the CMA CGM Group serves 400 of the world's 521 commercial ports. Its 170 shipping lines allow the company to operate across the world’s waters. The CMA CGM Group transports a volume of 12.1 million TEUs (Twenty Foot Equivalent Unit) each year.
Deal: Bouygues Telecom – ECA-backed financing
Boygues Telecom secures first ECA-backed transaction
MLA: Banco Santander
Lender: Swedish Export Credit Corporation (SEK)
Borrower: Bouygues Telecom
Amount: Eur295 million
Tenor: 10.5 years
Lawyers: Orrick Rambaud Martel
Exporter: Ericsson AB y Ericsson France
This first-ever ECA-backed transaction performed by Bouygues Telecom helps the company and the group diversify its funding sources. Swedish ECA Exportkreditnämnden (EKN) backed the loan. A further lender is Swedish Export Credit Corporation (SEK). Orrick Rambaud Martel provided legal counsel.
The structure mixed Santander's structuring expertise with SEK's funding capacities, to achieve a facility that provided fixed rate funding (both CIRR and non-CIRR) at attractive rates for Bouygues Telecom. The deal, the first ECA transaction to be closed with a French telecom company in a number of years, was signed in the middle of a particularly fraught period in the sector.
The deal incorporates a number of qualities not usually seen in one deal: refinancing of existing purchases as well as financial backbone for future purchases of new 4G equipment, full fixed rate for the overall facility (including both CIRR and market based), as well as non-reliance on parent guarantees or a pledge of financed equipment.
The transaction, due to its volume and tenor, is one of the most significant telecom deals signed in an OECD Category 0 country. It broadens the scope of financial alternatives for Bouygues Telecom amid the challenging environment of the French telecom sector.
Deal: Buitengaats (Gemini) – ECA-backed financing
Banks and ECAs back wind farm financing
MLA: European Investment Bank (EIB)
Participants: Euler Hermes, ABN Amro, Bank of Tokyo Mitsubishi UFJ, BNP Paribas Fortis, Bank of Montreal, CIBC World Markets, Deutsche Bank, Export Development Canada, Natixis, Banco Santander, Caixabank, Bank Nederlandse Gemeenten
Amount: Eur 2.09 billion
Tenor: 18 years
ECA: Eksport Kredit Fonden, ONDD, Euler Hermes
Lawyers: Allen & Overy LLP
The financing for the Gemini offshore wind farm--one of largest and most productive wind farms in the world—involved a large number of lenders plus several ECAs. At over EUR 2 billion in debt, it combined subordinated debt, commercial debt and multi-ECA tranches (EH, EKF, ONDD), with funding from commercial banks and EIB. It is this cooperation between EIB, commercial banks and multiple ECAs in different tranches that made the deal a reality and a template for future giant energy project finance transactions. Gemini will have a capacity of 600 MW and produce approximately 2.6 TWh of renewable electricity a year, making it one of the most productive wind farms in the world. Plans are for Gemini to supply 785,000 households with renewable electricity and reduce Dutch emissions of CO2 by 1.25 million tonnes a year, contributing to national energy independence as well as both domestic and European sustainability targets. Gemini Chief Executive Officer Matthias Haag has noted that the wind resources in the North Sea, where Gemini is to be located, are among the best in the world. Gemini is to support the Netherlands’ and European Union’s renewable energy targets with power harnessed from the sea. Expectations are also high for new jobs and investment in the Dutch economy.
The deal transpired in a difficult economic climate for renewable energy. According to renewables experts REN21, global new investment in renewable power and fuels totalled approximately $214.4 billion in 2013, down 14% from the previous year, and 23% lower than the record level in 2011. A main factor behind this decline was uncertainty over incentive policies in Europe. Europe’s renewable energy investment dropped 44% from 2012—making the successful completion of the Gemini deal that much more noteworthy.
Deal: Det Norkse – Commodity financing
Host of banks join Norwegian oil deal
MLABs: BNP Paribas, DNB Bank, Nordea Bank Norge, SEB AB
MLAs: SG CIB, ABN Amro, Bank of Tokyo Mitsubishi, Barclays, Ciitibank, CommBank Europe, Deutsche Bank, HSBC Bank, ING, Scotia, Sperbank, Swedbank, JP Morgan Europe
Borrower: Det Norske Oljeselskap ASA
Amount: $3 billion
Tenor: 7 years
Lawyers: Herbert Smith Freehills, Arntzen de Beshe Advokatfirma
The main purpose of the facility was to refinance a $2.1 billion acquisition bridge loan which was put in place by BNPP, DnB NOR,
Nordea and SEB to back Det Norske’s acquisition of Marathon Oil Norway. The facility also refinances Det Norsk’s existing $1 billion revolving credit facility ($490 million drawn) and allows for further drawings to fund future development capital expenditure and general corporate purposes.
The acquisition of Marathon Oil Norway was transformational for Det Norske as Det Norkse evolved from an exploration & production (E&P) company with small production base to become the largest listed European E&P company in terms of production. Meanwhile, it is one of the largest syndicated reserve based lending transactions.
Det Norske completed acquisition of Marathon Oil Norway in October.
SG CIB acted as mandated lead arranger in a $3 billion senior revolving credit facility with an accordion option of $1 billion for Det Norske Oljeselskap ASA.
Det Norske has exploration, development and production activities on the Norwegian Continental Shelf.
Det Norske is the operator of the producing Alvheim field and for the Ivar Aasen field development. In addition, the company is partner in the Johan Sverdrup field.
In Q4, Export Credit Norway, the Norwegian ECA, disbursed new export-related loans totalling NOK 4.3 billion ($560.7 million). The company received more than twice as many applications from ship equipment suppliers as in Q3.
Also in the fourth quarter, Export Credit Norway received 66 loan applications representing a total application volume of NOK 22.6 billion. Fifty-nine percent of applications were related to projects in the oil, gas and maritime sectors, while 41% concerned financing for projects in the renewable energy and other sectors
Deal: Evraz – Commodity financing
Lenders back Evraz deal
Coordinating MLA: Deutsche Bank, ING
Senior MLA: SG CIB, Rosbank, Nordea
Borrower: Evraz Consolidated West Siberian Metallurgical Plant; Evraz Nizhny Tagil Metallurgical Plant
Amount: $500 million
Tenor: 5 years
Lawyers: Linklaters CIS
Pricing: 350 basis points over Libor
Evraz was the first USD-denominated transaction signed for a Russian corporate following the release end July 2014 of the new EU and US sanctions targeting Russian companies and state-owned banks. Thanks to its pool of committed banks and strong credit profile, Evraz could raise syndicated loan facilities under pre-export finance (PXF) format. The deal was welcomed as a sign that, despite sanctions, a number of international lenders were still bringing their support to leading Russian corporates.
The facility is structured as a five year pre-export term loan, with a 24-month grace period, and a subsequent quarterly amortisation. It is secured by the borrowers' export revenues and is guaranteed by parent company EV plc and Evraz's trading company East Metals AG.
The proceeds of this new five year PXF were used to refinance Evraz’ financial indebtedness. Evraz’s previous syndicated facility dates back to November 2010 when they raised a $950 million, five-year PXF.
The company ultimately selected ING and DB to coordinate the deal, with ING further appointed as documentation agent and DB as facility & security agent.
Evraz first approached banks for the deal in April, initially looking for $900 million. The loan was then scaled back to $500 million in May to attract lenders amidst the political upheaval caused by Russia’s annexation of Crimea. The deal was subsequently put on hold after the US' latest round of sanctions on Russia, with the intensified political pressure coming from both the US and the EU dissuading lenders from deals in the country – even for un-sanctioned companies such as Evraz.
As such, this deal will come as welcome relief to all borrowers in the Russian market, serving as a sign that some international lenders have not been scared away from the country by the sanctions.
Deal: Kazan Soda – ECA-backed financing
Record Chinese ECA deal in Turkey
MLAs: Industrial and Commercial Bank of China Limited (“ICBC”), the Export-Import Bank of China (“CEXIM Bank”), and Deutsche Bank
Other lenders: ICBC
Borrower: Kazan Soda Elektrik Uretim A.S. (“Kazan Soda”) of the Republic of Turkey
Amount: $1.018 billion
Tenor: 13 years
Lawyers: Clifford Chance, Regnum Solicitors (English law legal counsel for the borrower) Yegin Ciftci Attorney Partnership (Turkish law legal counsel for MLAs/Lenders) DDEM Law Office (Turkish law legal counsel for the borrower)
This is the largest ever Chinese ECA-Sinosure covered long term financing in Turkey with over $1billion of financing. The Kazan Soda credit facility, insured by Chinese Export Credit Agency China Export and Credit Insurance Corporation (Sinosure), is to finance 85% of the EPC contract signed with Chinese exporter Tianchen Engineering Corporation (TCC) and an 85% Sinosure premium amount for the strategic project for Ciner Group's new investment in a greenfield 2.7 million tonnes/year soda plant and a gas fired 800MW cogeneration power plant.
Ciner Group is already leader in natural soda ash production in Europe through Eti Soda, currently operating at 1.1 million tonnes/year capacity being expanded to 1.7 million tonnes by year-end 2016. Eti Soda deploys a unique and environment friendly solution mining technology which will be duplicated at Kazan Soda. Compared to synthetic soda ash production, natural soda ash production and the solution mining technology are much more environmentally friendly, as they do not create any harmful by-products and consume only a fraction of the energy used in synthetic soda ash production.
Once the Kazan Soda project is complete, Ciner Group has stated aims to reinforce leadership in the natural soda ash market in Europe and become among the top natural soda ash producers in the world.
The loan enables Ciner Group to undertake an unprecedented investment in one of its strategic business units and positions it to become the global champion in its segment. The deal reflected successful collaboration by Chinese banks and an international bank in a giant Sinosure deal. The deal combined financing, risk management, trade and cash solutions, expertise in capital markets and knowledge of environmentally friendly technology presenting alternatives to synthetic products.
Deal: Metalloinvest PXF – Commodity financing
Metalloinvest signs syndicated facility amid crisis
Senior MLAs: BNP Paribas, Credit Agricole CIB, ZAO Unicredit Bank, Credit Suisse
MLAs: The Bank of Tokyo Mitsubishi UFJ
Coordinators: SG CIB, ING, Deutsche Bank
Borrower: JSC Lebedinskiy GOK and JSC OEMK
Tenor: 5 years
Lawyers: Linklaters CIS
Russian iron ore and steel producer Metalloinvest signed a $1.15 billion pre-export finance (PXF) dual-tranche facility with a club of banks.
Deutsche Bank, ING, Société Générale, BNP Paribas, Crédit Agricole CIB, UniCredit Bank, BTMU and Credit Suisse were the lenders on the loan.
To be repaid between 2016 and 2019, the facility will be used to refinance its predecessor PXF due in 2015-2016.
The facility is split into two tranches:
– A new five-year PXF to fully refinance the outstanding PXF signed in 2011 in order not to increase leverage; and
– A new two-year PXF bullet designed to bridge drawings under two ECA deals ($182 million OeKB-covered facility with SG, ING, CACIB and Unicredit and $98 million ECGD-covered facility with SG, SMBC and BTMU).
The transaction attracted eight banks despite the political context and closed at $1.15 billion ($850 million for the five-year PXF tranche and $300 million for the two-year PXF bullet tranche).
The group’s main producing companies LGOK, Russia’s largest iron ore producer, and OEMK, Russia’s seventh largest steel manufacturer, act as borrowers, while JSC “HC Metalloinvest”, the group parent holding company, acts as the guarantor.
Metalloinvest is a top-five iron ore producer globally, focussing on high value-added products such as pellets and hot briquetted iron (HBI). The company operates the second-largest iron ore reserve base in the world. Metalloinvest is already the leading commercial HBI supplier with a global market share of more than one-third.
The size of the facility during difficult market conditions and the diversity of the pool of committed banks bear testimony to Metalloinvest’s relationship with its banks.
Deal: PKN Orlen – Commodity financing
PKN Orlen closes record deal
Co-ordinating bank and Bookrunner: RBS
Lenders: HSBC, Pekao, BZWBK, BTMU
Borrower: PolskiKoncernNaftowy Orlen
Amount: $740 million
Tenor: 19 months
Lawyers: Norton Rose Fulbright
The transaction is the largest ever syndicated strategic crude oil reserve transaction and the largest ever transaction of the type undertaken by the company.
Polish company PolskiKoncernNaftowy Orlen S.A. (PKN Orlen) is one of Central Europe’s largest refiners of crude oil, with strong petrochemical and retail businesses and a growing upstream segment. PKN Orlen plays a strategic role in Poland’s energy and resources sector.
PKN Orlen needed to finance part of its strategic crude oil reserves and required a partner that could design a bespoke ownership transaction, allowing it to maintain cash flow and, critically, not disrupt its normal operations, explained lender RBS.
For the first time in a PKN Orlen monetisation, the transaction was structured to include an element of ongoing amortisation of the loan, linked to the backwardation in the crude oil price at closing, according to RBS. This posed a challenge as the amortising element effectively represented an unsecured position for the banks. RBS was able to articulate why this structural change was necessary and how the overall security position for the banks remained acceptable. This allowed the client to maximise the benefit of the transaction, by achieving higher proceeds from the sale of the oil.
The crude oil market was in considerable backwardation (i.e. forward prices were lower than spot prices) at the time the transaction closed--almost 6% of the spot price at closing. RBS refined the structure to balance the benefit to the client, delivering higher Day One proceeds from the crude oil sale, with an acceptable overall security position to the banking group throughout the lifetime of the transaction. Alongside the need for flexibility within the arrangement, the transaction needed to be concluded in an unusually short timeframe; it was mandated in May 2014, to be implemented by the end of the following month.
Deal: Speyside Renewable Energy – Project finance bond
Speyside completes project finance bond
Arrangers: Barclays Bank
Borrower: Speyside Renewable Energy
Amount: GBP 48.2 million
Tenor: 13.8 years
Public Finance Institutions: Infrastructure UK (HM Treasury)
Lawyers: Linklaters, Ashurst
The proceeds of this transaction are used to finance, construct, and operate a Combined Heat and Power biomass power plant (CHP) on the Rothes Forest Estate in Scotland, which will supply up to 15 MWe of electricity to power more than 20,000 homes and provide green energy for one of Scotland’s most iconic whisky distilleries, Macallan.
Speyside Renewable Energy successfully completed the first unrated publicly listed project finance bond under the IUK Guarantee
Scheme of GBP 48.2 million. Speyside Renewable Energy is a project company established by Estover Energy and sponsored by John Laing and Green Investment Bank.
The site will cover about 12 acres, in a 100-acre commercial forestry plantation three-quarters mile (1.2 km) northwest of Craigellachie and around half a mile (800 metres) from the Macallan distillery.
The plant will use clean, low-grade wood harvested within an average radius of 50 miles (80km). In addition to electricity, the plant will provide steam to the distillery to provide heat for the whisky making process.
The project represents an inward investment of GBP 60 million to the local area and will boost the local economy by creating:
• Up to 40 new local jobs, including 20 permanent jobs at the plant and a further 20 jobs in the supply chain.
• Up to 100 jobs during the construction period.
• A better market for low-grade wood, which will help local forestry growers by supporting the production of higher-grade wood making local forestry and woodland management more economic.
• A more cost-effective, reliable and sustainable source of energy for the Macallan distillery.
Deal: Star Rafineri – ECA-backed finance
Turkey closes biggest project finance deal
MLAs: BNP Paribas, Credit Agricole, Deutsche Bank, ING, KDB, KfW Ipex, Mitsubishi UFJ Financial Group, Natixis, Societe Generale, Unicredit, BBVA, Intesa Sanpaolo, Banco Popular Espanol, Caixabank, Santande
Borrower: Star Rafineri
Amount: $3.29 billion
Tenor: 18 years
ECAs: Sace, Export Development Canada, JBIC, NEXI, US Ex-Im, CESCE and K-Sure.
Lawyers: Allen & Overy
The huge $5.6 billion Star Rafinery project was the biggest project finance ever closed in Turkey. The signing was made up several tranches of funding by export credit agencies (ECAs), which provided the largest portion, and commercial banks with $3.3 billion in long-term financing was provided by a combination of commercial banks and ECAs.
The seven ECAs were:
• Export Development Canada
• US Ex-Im
In addition, 16 commercial banks were involved in the financing. Sace's guarantee is to 50 Italian companies including oil and gas turnkey contractor Saipem for the export of Italian machinery and tools.
The project plays a key role in the long-term strategy of Socar, as it will allow it to establish itself as the only company fully integrated in the Turkish Market. The project will also help reduce Turkey’s dependence on imported petrochemical products.
The 10 million tonne per annum crude oil refinery is in development. Star is jointly owned by the State Oil Company of Azerbaijan (Socar), which holds 60%, and the Ministry of Economy and Industry of the Republic of Azerbaijan (40%).
Of the several tranches of funding by ECAs and commercial banks, the largest tranche is a $665 million, 18-year loan, with legal advice provided by Allen & Overy and Paksoy & Co.
The project will be the first refinery to start operations in Turkey since 1972.
Deal: Tonner – Commodity financing
BP, Rosneft sign landmark CIS transaction
MLABs: Deutsche Bank, BTMU, Bank of China, HSBC
Borrower: Rosneft, BP
Amount: $2.4 billion
Tenor: 5 years
Pricing: 200 basis points over Libor
The facility is an up-to-$2.4 billion, five-year syndicated crude oil and oil products prepayment facility to Rosneft, secured by the assignment of export contracts for oil products. It was essential financing for both BP and Rosneft as it was relationship defining due to BP’s shareholding in Rosneft. This transaction enhanced the strong relationship between two biggest international oil majors. The deal was the largest of the oil backed transaction in the CIS market during 2014.
Equipped with a five-year tenor and a two-year grace period, the facility also has an availability period of 90 days from the signing date. It will pay a margin of 200 basis points (bp) over one-month Libor.
Funds will finance BP's purchase of crude oil, fuel oil, naphtha, gasoil, diesel, kerosene, gasoline or other petroleum products from Rosneft. The offtake contract will be for a total of up to 12 million tonnes of petroleum products - that is, for up to 2.4 million metric tonnes a year for the five-year duration of the contract. The offtaker's payments for each cargo will be made via irrevocable letters of credit.
Final documentation will offer provisions allowing the lenders to replace BP as the offtaker in the event the company's financial condition deteriorates to the extent that it is unable to meet its payment obligations or in the event sanctions prohibit it from performing its obligations under the offtake contract.
According to the agreement, Rosneft will be required to ensure that no more than 85% of the commodity exports are, at any time, subject to any security.
The Rosneft-BP prepay was originally meant to have signed by the end of 2013.
Deal: Trafigura – Commodity financing
Trafigura taps 13 banks
Participants: Deutsche Bank
Lenders: Undisclosed list of 13 banks
Amount: $1.72 billion
Tenor: 1 year
The facility is structured as an uncommitted one year, up-to-$1.72 billion refined metals borrowing base facility secured through base metals and ferrous metals inventory and receivables.
The borrowing base structure allows the value of the inventory and receivables to be monitored on a weekly basis and outstandings to be adapted in relation to the fluctuations in the commodity prices. The structure benefits from an English law floating charge over assets covering both receivables and inventory of the borrowers. Additionally, TPTE inventory and receivables are secured by way of a Singapore law pledge and assignment in favour of the security agent.
Furthermore, inventory held by TAG based in the USA is secured through the general security agreement governed by New York law which is first ranking and accompanied by a relevant UCC-1 filing and negative pledge provisions in the facility agreement. Inventories owned by TBBV are secured through the first ranking Dutch pledge of stocks. The English law trade finance agreement provides the lenders with an assignment over all the sales contracts as well as insurances of all borrowers related to metals which are financed by the facility.
Receivables are paid into the borrowers’ pledged collection accounts held with DB Amsterdam/DB Trust Company Americas, with the relevant notice of assignment included on each commercial invoice, providing lenders with access to top-line revenues.
Global commodities trader Trafigura is the second largest metals trader and third largest oil trader globally. Trafigura posted rising gross profit in its annual results. Earnings before interest, taxes depreciation and amortisation (EBITDA) rose 13% on year to $1.309 billion.
Deal: Transoil Group – Commodity financing
Transoil secures first ever syndicated facility
MLAB: SG CIB
Lenders: SG CIB, International Finance Corporation, Erste Group Bank AG, Banque de Commerce et de Placements, Banque Cantonale Vaudoise, FIMBank p.l.c, EFA Dynamic Trade Finance Fund Ltd
Borrower: Transoil-International, Switzerland
Amount: $155 million
Tenor: 1 year
Exporter: Transoil-International, Switzerland
Lawyers: Hogan Lovells, Turcan Cazac, Poncet Turrettini Amaudruz Neyroud & Associés, George Y. Yiangou LLC, Sayenko Kharenko
This is the first ever syndicated facility for Transoil Group and the first ever large-scale syndicated trade finance facility in Moldova in the agri-sector.
Transoil Group is funded through a $155 million facility arranged by SG CIB as MLA bookrunner, facility agent, security agent and Mobiasbanca as local agent involving a syndicate composed of commercial banks and IFC.
The facility is used to finance working capital needs associated with trading operations (origination, primary processing, storage and transportation of commodities and their subsequent sale for export), which are currently financed by numerous uncommitted credit lines provided by international banks to the group on various and different terms.
Additionally, the facility is designed to cater for the seasonality of the group’s working capital needs.
The deal is structured as a self-liquidating borrowing base, with a wide set of securities in particular under English, Swiss and Moldovan law and a complex operational follow-up due to large number of stocks to be monitored and the number of export sales.
Success in syndication was achieved through the joint efforts of Transoil Group and SG CIB despite the challenging political environment in the Black Sea region.
The facility is structured as a short-term committed financing including a specific calendar period for drawings matching with the agricultural seasons including a final clean-up as of June 30 2015.
The major feature of the facility is that any drawdown can only be made against available commodities and available export sales, which provide strong comfort to the lenders. Lenders do not take any harvest or production risk. Additionally, the facility entails elements of a borrowing base facility since it is fully covered by assets charged for the benefit of the lenders.
Deal: Turk Eximbank – Export finance
Turk Eximbank signs landmark agreement
Lenders: ITFC, KSA, Islamic Development Bank, National Commercial Bank, First Gulf Bank, UAE, Al Baraka Islamic Bank, Bahrain, ICIEC
Borrower: Turk Eximbank
Amount: $200 million
Tenor: Six months
ECAs: Turk Eximbank, ICIEC
Lawyers: IDB In-House
This deal is the first syndicated Islamic export finance line for an ECA. Syndicate lenders financed Turk Eximbank’s export transaction. The requirements for Islamic transaction are fulfilled by presentation of export declaration forms which contain all required information plus assurances of delivery of goods financed as a requirement for Islamic trade finance transaction.
The deal is unique in that it uses a traditional trade document which will serve as underlying paper for an Islamic trade finance product. This line allowed the borrower to show their openness to both Islamic and conventional tools in pursuit of expanding capabilities of exporters, hence, to support the user of both products without prejudice.
In addition, it allowed the borrower, Turk Eximbank, to expand its export support via inclusion of Islamic finance not previously available. This supported the ECA’s strategy to reach all segments of exporters.
Murabaha export declaration forms include details on the seller and final buyer, unit price, quality and quantity of goods and proof of delivery. Usually, a Murabaha sale is proved via presentation of a commercial invoice and shipment proof such as a bill of lading. In this structure, the export declaration form represented a new departure.
• Exporters apply to Turk Eximbank for financing.
• Turk Eximbank sends copy of export declaration forms and an MT799 message for requesting payment along with a list of exporters. Export declaration forms are proof of exports as processed by customs and an excise department.
• ITFC pays Turk Eximbank in a lump sum payment.
• Turk Eximbank pays exporters.
• Turk Eximbank carries out its own lending process with exporters.
• On maturity, Turk Eximbank repays the ITFC
Deal: United Company Rusal – Commodity financing
Rusal signs PXF
Coordinators: ING, SocGen
Other coordinators: Undisclosed list of seven lenders
Participants: Undisclosed list of more than 20 banks
Amount: $3.56 billion
United Company Rusal PLC is the world’s largest producer of primary aluminium, alloys and value added products and one of the industry leaders in alumina production. The Group holds a stake of about 28% in Norilsk Nickel, the world’s largest producer of nickel and palladium. Driven by a challenging market outlook back in 2013, Rusal appointed ING and SocGen as active coordinators in a group of seven coordinating bookrunners that jointly managed more than twenty banks. As active coordinator, ING was responsible for structuring the refinancing of two existing pre-export facilities (PXF), as well as leading discussions with the Russian banks.
Transaction highlights include:
• A longstanding relationship between the SMEF team in Amsterdam and Rusal, allowing ING to successfully lead an important transaction for Rusal under challenging circumstances on the aluminum market;
• The company’s debt profile was improved substantially by amending and restating its $ 4.75 billion PXF and up-to-$400 million PXF with an extended facility lifetime and new grace period. Rusal enlisted the help of key relationship banks to successfully refinance its $10 billion debt package. The Company’s improved debt maturity profile allows the company to maintain a sustainable cash position until the aluminium market has fully rebounded.