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Structured and Project Finance at Ex-Im Bank

Export Import Bank ?. Official Export Credit Agency (ECA) of U.S. GovernmentEstablished in 1934Headquarters in Washington DC , 8 Regions Mission ? To create and sustain jobs in the U.S. by substantially increasing the number of companies we serve and expanding their access to global markets.

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Structured and Project Finance at Ex-Im Bank

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    1. Structured and Project Finance at Ex-Im Bank Medical Fair India 2011 Healthcare & Financing

    2. Export Import Bank ? Official Export Credit Agency (ECA) of U.S. Government Established in 1934 Headquarters in Washington DC , 8 Regions Mission – To create and sustain jobs in the U.S. by substantially increasing the number of companies we serve and expanding their access to global markets. 2010 Results - $24.5 Billion

    3. Medium-Term Financing Used to finance foreign buyers purchasing U.S. capital equipment: 85% financed, 15% cash down payment Repayment up to 5 years, exceptionally 7 years Amounts of $10 million or less Financing can be accomplished through the following Ex-Im products: Lender loan guarantees (Medical Equipment) Export Credit Insurance (Medical Equipment) Direct Loans (few)

    4. Medical Initiative Approach The Medical Initiative offers solutions for the export of medical technologies to foreign borrowers that would not go forward without Exim support. For those transactions too weak to consider under standard terms we seek to strengthen in other financially acceptable methods.

    5. Medical Initiative Approach Primary Ways to Enhance Transactions Liens and/or Side Collateral Guarantors Vendor Agreement Exporter Participation Other “Innovative” Approaches Automatic Local Cost Cover Local Cost consists of costs incurred in buyer’s country or Up to 30% of Contract price (No Cash Payment Requirement)

    6. Medical Initiative Approach Will Look at “Start-up” Hospital/Clinic Feasibility Study Guarantors Collateral Pro-forma Financials and Cash Flows 25-30% Equity Participation by Founders See MEI Guidelines – (Website)

    7. What You Will Learn Here What cases does the Structured Finance Division handle? What is the difference between “project” and “structured” finance? What are the basic principles of a limited recourse structure? How long will my PF or SF transaction take to process? Who at Ex-Im gets involved?

    8. The Structured Finance Division The SFD handles transactions that are: Very large corporate credits (no bank or sovereign guarantee) “Structured” Limited recourse project financings We issue guarantees and direct loans.

    9. 3 Ways We Look at a Transaction Big Balance Sheets Existing company is the borrower/guarantor Our credit comfort comes from client history Structured Finance Debt resides on balance sheet We derive additional credit comfort from securitized cash flows from new production Limited Recourse Project Finance SPV borrower with sound sponsors Project cash flows are our source of repayment

    11. Structured & Project Finance: What is the Difference? Structured (Typical) Existing company borrower financing an expansion Full recourse to borrower ( borrower must be CLS compliant) Analyze historical & projected cash flows Limited “perfection of security” Can finance 85% of project costs (subject to U.S. content rules). Project Finance SPV borrower financing a greenfield project or expansion Limited recourse to parent companies (Offtaker must be CLS compliant) Analyze project’s future cash flows Complex documentation to perfect security More than 15% equity required, so total debt provided less than 85%

    12. Terms (OECD guided) Structured Finance Pay interest during construction (IDC) Maximum repayment term usually 10 years Flexible amortization in some cases limited by WAL of 5 to 6.25 years Finance for: local costs connected to export contract, ancillary fees Project Finance Capitalize IDC Maximum repayment term usually 14 years Flexible amortization limited by WAL of 7.25 years Finance for any local costs up to 30% of U.S. contract value and ancillary fees

    13. Fees Structured Commitment fees: 1/8% for guarantees ½% for direct loans Exposure fees per OECD guidelines Limited Advisory Fees Project Finance Commitment fees: ½% for all any pre + post-completion coverage 1/8% w/o pre-completion coverage & for additional options Exposure fees per OECD guidelines Extensive Advisory Fees

    14. Top Questions to Ask Yourself What is being exported from the U.S.? Is the transaction CLS compliant? (based on the borrower for structured transactions and the offtaker for limited recourse deals) What structure are you proposing? If yours is a limited recourse transaction: Who are the sponsors? How much equity is provided? Is the offtaker creditworthy? Who is your financial advisor?

    15. PROJECT FINANCE PROCESS: Phase I

    16. PROJECT FINANCE PROCESS: Phase II

    17. The Ex-Im Bank Team International and Domestic Business Development Structured Finance Division Other parts of the Bank General Counsel Engineering and Environment Country Risk Analysis Board of Directors Credit Review and Compliance Asset Monitoring

    18. For More Information To Continue This Conversation Call: Bill Rowland (202) 565-3471 Email: william.rowland@exim.gov WEBSITE: www.exim.gov Thank You For Your Participation

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