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ECA Covered Financing in Indonesia with LBBW GLOBAL Hydro / Axerna – Hydropower Seminar 4Th May 2017 Landesbank Baden-Württemberg | Page 2 Landesbank Baden- Württemberg The orchid. Beautiful and at home anywhere in the world. Botanists have named 30,000 species so far. ECA Covered Financing in Indonesia with LBBW GLOBAL Hydro / axerna – Hydropower Seminar 4th May 2017 Landesbank Baden-Württemberg | Page 2 Who we are . One of the Top 5 German Banks and largest Some of our key business partners Landesbank . Universal bank with over 200 offices in Germany . LBBW successfully assists more than 25,000 customers in the commercial and corporate customer business alone. Coverage of large and medium-sized enterprises in Germany, Austria and Switzerland . Approx. 11,000 employees worldwide . Tier 1 capital ratio 21.4%. Landesbank Baden-Württemberg | Page 3 LBBW international locations: Present throughout the world for our customers Moscow London Vienna Zurich New York Beijing Istanbul Tashkent Seoul Europe Dubai Delhi, Gurgaon Shanghai Hanoi Mexico City Mumbai Singapore Corporate customers ar. 25,000 São Paulo Group employees Jakarta ar. 11,000 Correspondent banks ar. 2,600 in 157 countries 5 Branches LBBW locations in Germany ar. 200 12 representative offices LBBW locations worldwide 17 in 15 countries 5 German Centres Central bank for the savings banks in Baden- Württemberg, Rhineland-Palatinate and Saxony Landesbank Baden-Württemberg | Page 4 LBBW Singapore Branch . Established in 1995, located in the German Centre . Goal of providing expertise and services connected to facilitating trade in the ASEAN region . Supporting German/Austrian/Swiss related companies with our local expertise and strong network Main Business areas: Singapore Trade- and Export Focus Area Finance Treasury/ Financing Capital Markets LBBW Competence Centre Landesbank Baden-Württemberg | Page 5 Export Financing with LBBW Export Finance: Long-term buyer’s credit to local importers under ECA cover Landesbank Baden-Württemberg | Page 6 Export Financing with LBBW LBBW supports Asian importers by providing tailor-made long-term financing solutions. Loan for long term financing of capital goods and services based on Export Credit Agency (ECA) cover . Direct disbursement to Exporter or Reimbursement to Importer who pays under an LC . Minimum amounts: EUR/USD 2.5m Benefits of LBBW’s ECA-covered financing Low floating or fixed Independent from ECA cover as collateral Long term financing interest rates domestic bank lines Independent from local Used as a Sales-Tool Cash transaction to the Cost-efficient security economic environment to make projects viable Exporter for the Exporter Landesbank Baden-Württemberg | Page 7 Closed Transactions (Extract) . PT Superkrane Particle Board Consumer Goods PT Bias Petrasia PT Pelayaran Isna Food & Beverage PT Superkrane Mitra Utama Manufacturer Manufacturer Persada Agung Persada Supplier Mitra Utama EUR 5.02m EUR 12.00m EUR 4.32m EUR 2.13m EUR 2.45m EUR 16.08m EUR 1.04m Indonesia Malaysia Indonesia Indonesia Indonesia Bangladesh Indonesia Crawler Particle Board Food Processing Hydro Power Cargo Food Processing Telescopic Crane Line Equipment Plant Cranes Equipment Mobile Crane Euler Hermes Euler Hermes OeKB OeKB Euler Hermes SERV Euler Hermes 10/2015 12/2015 12/2015 08/2016 11/2016 12/2016 01/2017 Landesbank Baden-Württemberg | Page 8 Export Credit Agencies (ECA) To support their exporters, many countries have mandated privately managed Export Credit Agencies to provide sovereign risk coverage to finance worldwide supplies to importers such as: . Coverage is available in major currencies for fixed or floating rate loans. The ECA premium for cover is determined by the buyer’s rating, the country risk and the tenor of the loan. Landesbank Baden-Württemberg | Page 9 Key figures of ECA financing €/$ 2.5m 15% 85% 50% 95% Minimum contract Down- or interim Of supply contract Usual requirement Political and value payment is required amount can be for delivery content commercial risk financed (plus ECA from the originating insurance cover related costs) country issued by the ECA of Exporter’s country on the loan amount, in favor of the bank. (100% for some ECAs). Landesbank Baden-Württemberg | Page 10 Structure of a Buyer’s Credit: Direct disbursement 1.Commercial contract Importer Exporter (Borrower) 3.Loan disbursement completion risk 2.Loan agreement 2.Loan 4.Repayment of loan 4.Repayment Optional: Insurance on the on the Insurance Optional: Export 2.Insurance on the credit risk Credit Agency Landesbank Baden-Württemberg | Page 11 Structure of a Buyer’s Credit: Reimbursement 1.Sales contract Importer Exporter 2.Payment (Borrower) * ofloan agreement completion risk .Loan .Loan 3 .Repayment .Repayment 5 4.Loan reimbursement 4.Loan Optional: Insurance on the the on Insurance Optional: Export 3.Insurance on the credit risk Credit Agency * reimbursement to Importer for payments already made to Exporter Landesbank Baden-Württemberg | Page 12 Export Financing with LBBW Starting Point LOI Loan Agreement Structuring Negotiatin Documentatio Execution g n • Supply • Export of scope • Supply • ECA goods • Tenor contract application • Upfront • Project • Financing • Signing of fee total structure supply • Final ECA amount • LBBW: contract cover LOI • Loan Agreement Disbursement Repayment Period Financin Financing Financing Conclusion of s g proposal / mandate Loan request LOI Agreement Commitment period Landesbank Baden-Württemberg | Page 13 Export Financing with LBBW Loan Volumes from EUR 10 Mio. Loan Volumes of EUR 3-10 Mio. A delivery/ Repayment period of up A delivery/ Repayment period of up construction/ to five years possible construction/ to ten years (in some disbursement phase of disbursement phase of cases up to 18 years). up to one year up to two years The maximum tenor of the buyer credit is determined by the ECA based on the nature of goods supplied and the amount of the commercial contract. Most ECAs require that the entire repayment tenor shall not exceed 10 years from the starting point. Longer tenors are available e.g. for renewable energy projects. Landesbank Baden-Württemberg | Page 14 Example Calculation for an ECA-covered buyer’s Credit from LBBW • Supply contract value: EUR 3,000,000 Less 15% down-payment: (EUR 450,000) • 85% Financing amount: EUR 2,550,000 • ECA Fee: EUR 125,000 (approx.) • Total Loan Amount: EUR 2,675,000 • Interest rate: 2.00% + 6m-EURIBOR = 2.00% p.a.* • Management fee: 1.25% flat* • Commitment fee: 1.00% p.a.* on undisbursed amount • All-in cost (approx.): 4-5% p.a.* • Tenor: 5 years • Repayment + interest: 10 semi-annual instalments from Starting Point • Disbursement: Directly to Exporter or reimbursement to Importer • Collateral: None * Above mentioned conditions are for discussion purpose only and non-binding Landesbank Baden-Württemberg | Page 15 Requirements for a first indication Information requirements . Last 3 (audited) financial statements . Financial projections . Organizational Chart showing ownership structure of the group Size requirements . Total Assets: larger than EUR 10m . Revenues: larger than EUR 10m Landesbank Baden-Württemberg | Page 16 Our Contact Details Leonard Anilaputra Eggert, CFA Mark Elser Relationship Manager Head of Corporate and Institutional Banking LBBW Singapore Branch LBBW Singapore Branch 25 International Business Park 25 International Business Park #01-72 German Centre #01-72 German Centre Singapore 098412 Singapore 098412 Tel: (+65) 6562-9297 Tel: (+65) 6562-9298 Email: [email protected] Email: [email protected] Landesbank Baden-Württemberg | Page 17 Disclaimer Supervisory authorities of LBBW: European Central Bank (ECB), Postfach 16 03 19, 60066 Frankfurt am Main and the German Federal Financial Supervisory Authority (BaFin), Postfach 1253, 53002 Bonn / Postfach 50 01 54, 60391 Frankfurt. This publication is based on generally available sources which we are not able to verify but which we believe to be reliable. Nevertheless, we assume no liability for the accuracy and completeness of this publication. This publication gives our non-binding view of the market and products at the time when it was completed, irrespective of potential own holdings in these products. This report dos not replace personal advice. It is only meant for information purposes and not as an invitation to buy or sell. For any further and more up-to-date inflation about specific investment opportunities and for the purposes of individual advice, please see your financial adviser. This publication is not distributed by LBBW to persons in the US, nor does LBBW plan to approach persons in the US. This presentation is copyright. It may not be disclosed to any third parties except with LBBW's prior written approval. We reserve the right to change our opinions expressed here at any time and without prior notice. Furthermore, we reserve the right to stop updating this information or to discontinue it completely without prior notice. Please find current data according to § 5 section 4, no 3 FinAnV under http://www.LBBW.de/finanzanalyseverordnung. Proprietary Rights Notice © 2014, Moody's Analytics, Inc., its licensors and affiliates ("Moody's"). All rights reserved. Moody’s ratings and other information ("Moody's Information") are proprietary to Moody's and/or its licensors and are protected by copyright and other intellectual property laws. Moody’s® Information is licensed to Distributor by Moody’s®. MOODY'S INFORMATION MAY NOT BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. Moody's® is a registered trademark. .
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