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CONTENTSThe Guide to GlobalTrade Finance Markets2011SPONSOR FEATURESNR Denton 6REGIONAL REPORTSSub-Saharan Africa 12Deals of the YearTop regional borrowers and lendersThe Americas 28Deals of the YearTop regional borrowers and lendersEurope and the CIS 55Deals of the YearTop regional borrowers and lendersMiddle East and North Africa 81Citi in the Middle East and North AfricaDeals of the YearTop regional borrowers and lendersAsia Pacific 97Deals of the YearTop regional borrowers and lendersDirectory 133Glossary 171TRADE FINANCE The Guide to Global Trade Finance Markets 2011 1

The global information sourcefor trade, supply chain, commodityand export finance marketsThrough close contact with those activein the sector, Trade Finance is able tobring you critical news not found elsewhere.Turn our news, knowledge and insightto your advantage with essentialinformation and detail on the globaltrade, export and commodity financemarkets – intelligence vital to exporters/importers, financiers, insurers and otherservice providers.Why not take a free trial to Trade Financeand see how it can help you:➨ Strengthen your strategies orcooperative initiatives with our reviewsand analyses of current deals.➨ Sharpen your understanding of emergingECA activity through our export financenews pages.➨ Pinpoint the banks, law firms, advisersand insurers supporting exporters.➨ Join a global community of senior tradefinance professionals who already enjoyprivileged access to Trade Finance’sinsider market intelligence.With a free online trial you will also be ableto keep informed of all the latest news as ithappens with our customisable email alertsand see why Trade Finance is the definitivesource for those in the industry.Take a Free Trialto Trade Financetoday ➨Sample what Trade Finance has to offer youwith a free online trial. Start your trial byregistering on our website at:www.tradefinancemagazine.comAlternatively call Alex Sheriffon: +44 (0) 20 7779 8285

Global Trade & Supply ChainFinance, London, June 2011GlobalOctobeGlobal Export & AgencyFinance, Washington,June 2011Trade & Supply ChainFinance in theAmericas, Miami,14th March 2011Structured Trade &Export Finance in theAmericas, Miami,15th & 16th March 2011Structured Trade &Export Finance inBrazil, Sao Paolo,September 2011Forthcoming Trade Finance events

Trade Finance in the Nordics,Helsinki, June 2011Export Finance, Berlin,r 2011Structured Trade & ExportFinance in Russia, Moscow,10th & 11th March 2011Global Commodity Finance,Geneva, 16th & 17th June 2011Japan Trade, Export &Project Finance, Tokyo,April 2011Structured Trade & ExportFinance in the Middle East,Dubai, November 2011Structured Trade & Export FinanceAsia Pacific, Shanghai, April 2011Trade & Supply Chain Finance in AsiaPacific, Hong Kong, April 2011Trade & Commodity Finance in Asia,Singapore, September 2011Structured Trade & ExportFinance in Sub SaharanAfrica, Johannesburg,September 2011For sponsorship of events, please contact:Dominik Kloiber · dkloiber@euromoneyplc.com · Tel: (+44) 20 7779 8099

SNR DENTONTrade Finance – a possible bumpy ride aheadand how to avoid some pitfallsAs 2010 draws to a close, it is worth reflecting on what has happened and whatmight affect the trade finance world. It is not all bad news, but there are somewarning bells ringing.The treatment of trade debtDiscussion has revolved around two issues:l What will Basel III bring?; andl Should trade debt be treated better?The two issues are linked. Trade debt properly documented and structured is still asafe way to provide finance. At long last a paper jointly from ICC and ADB (AsianDevelopment Bank) has the statistics to prove it. This information should be usedby the banks in discussions with the Basel Committee to seek to achieve betterrisk asset weighting for a wider range of trade debt. Basel II did not help as muchas it could. The commodity lending exception is too narrow for most structuredtrade transactions. The specialised lending exception that was geared for projectfinance structures with a special purpose vehicle (SPV) borrower does not allowthe flexibility needed for structured trade. It concentrated on risk mitigation andtransfer and not self-liquidating structures.A key point in Basel III at the moment is again risk asset weighting, but this timeit looks at contingent claims like derivatives. It currently wants to treat letters ofcredit like derivatives. This will have an adverse effect on the banks and willimpose huge capital requirements if not altered. It should be altered and many6 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

SNR DENTONorganisations are pressing for this. It is not the only issue. A victory here will help,but in an ideal world trade debt should be more favourably treated for otherreasons. An amendment to Basel II tests should be on the agenda as well asconcentrating on Basel III. Banks were not united in dealing with Basel II, butthere is time to do this for Basel III.At the same time as this, there is a continuing discussion about how trade debtshould be treated in restructurings and insolvency in the aftermath of the Kazakhbank debt renegotiations. Thebackground remains that manyThe background remains that manywere surprised at the results of thedebt negotiations in relation totrade. Further analysis shows thatthe result could have beenpredicted. Much of the debt thatbecame subject to renegotiationwas called trade debt or eventrade-related debt.were surprised at the results ofthe debt negotiations in relationto trade. Further analysis showsthat the result could have beenpredicted. Much of the debt thatbecame subject to renegotiationwas called trade debt or eventrade-related debt. It was notstructured and in many casessome debt was merely workingcapital called trade-related debt.The restructurings of a numberof the Kazakh banks showed thatthere was no automatic priority,but that some debt was givencontractual priority for various reasons. Those reasons were more commercialthan legal in most cases.What can be learned perhaps is that any discussion of priority for trade debtwould revolve around short-term trade debt directly related to the import orexport of goods. That might help part of the market, but certainly not longertermstructured trade debt. Here priority can be achieved by the way thetransaction is structured. Taking security is useful, but structure and monitoring toachieve the self-liquidation of the debt is key.Making payments in light of the new Bribery ActIn the UK there is a new Bribery Act (the Act), which comes into effect in 2011.It is wide ranging in what it covers. Indeed it is potentially wider than the USForeign Corrupt Practices Act. It implements an EU directive, so equivalentlegislation will appear elsewhere.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 7

SNR DENTONThe offences are widely drawn, but more worrying are at least two aspects. Thefirst is that it affects actions taken outside the UK. The second is that paymentsthat might be caught include “grease payments” used to facilitate negotiationseven where the making ofsuch payments is the normalcourse for a particular countryor transaction. The onlyA major concern for trade financeis that transactions involve agentsand other intermediaries.Payments made here or as part ofany financing will have to bewatched carefully. This is not anarea to overlook.defence is that “adequateprocedures” are in place formonitoring the Act. However,those procedures must be seento lead to the detection andreporting of offences.A major concern for tradefinance is that transactionsinvolve agents and otherintermediaries. Payments madehere or as part of any financingwill have to be watched carefully. This is not an area to overlook. The overzealousmight either lose good transactions or be tempted to step over the “bribery line”.Directions are awaited from the UK Ministry of Justice. These will be important.Those subject to the laws in other jurisdictions should take note and reactaccordingly.Some better news on the documentary frontJuly 2010 saw the launch of URDG 758. These are new rules for demandguarantees. Many improvements have been made to the rules and there arespecimen forms of guarantees. Perhaps one difficulty that remains for thebeneficiary is the requirement to have a statement of breach. On the other handnew force majeure provisions allow for the guarantee to continue if there areexternal actions that would prevent performance. In those circumstances theguarantee would not just expire (as would happen with standby letters of credit(SBLCs) under UCP 600 or ISP 98), but the force majeure time would stop theclock for a designated period.The issue for the trade finance market is whether to accept or issue URDGguarantees in place of SBLCs issued under either of the other rules. There areclearly potential advantages here especially as compared to ISP 98. Going evenfurther is whether banks will accept or issue other sorts of guarantees underURDG and not use their own format. This one will take time to work its way8 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

SNR DENTONthrough. If any of this is achieved, there could be simpler documentation aroundthe corner.January 2011 sees the new INCOTERMS 2010 rules coming into effect. Againan improvement on the previous version. The INCOTERMS rules deal with theexport and delivery of goods. They do not deal with transfers of property rights ingoods. Some of the delivery terms have changed. For the sentimental, there willno longer be a transfer of risk over the “ship’s rail”, but a more carefully defineddelivery point.Does this adversely affect trade financiers? It should not so long as contracts arechecked to make sure they have the major terms setting out when obligations areto be performed and by whom.Sale contracts must still have all these provisions. Incorporating theINCOTERMS rules is not an excuse for avoiding this.Forfaiting2011 is likely to see the new rules for forfaiting. They are to be called the UniformRules for Forfaiting (URF). This will bring to an end a process started in 2004with the launch of the IFA Guidelines for secondary market trading. This wasfollowed by the setting-up in 2009 of a joint drafting committee by the ICC(International Chamber of Commerce) and IFA (International ForfaitingAssociation) for the creation of rules for the Primary and Secondary forfaitingmarkets.Forfaiting is the creation of a transaction where deferred payment claims incurredby a buyer usually from the sale of goods can be sold by the seller of the goods at adiscount to a forfaiter. The buyer gets credit terms and the seller gets his cash. Theforfaiter is prepared if the circumstances are right to take a transfer of the paymentclaims from the seller without recourse to it. The forfaiter can then either keep thepayment claims or sell them on to another party.The creation of the transaction is the Primary market. The subsequent sales are theSecondary market. URF will create rules for both. The rules can be incorporatedin the agreements between the parties and interpreted in accordance with the lawof the contract. Once adopted and used this will provide more clarity in themarketplace. It may also allow more parties to join in this market.URF is being called the UCP for forfaiting, comparing it to how letters of creditare issued under UCP 600.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 9

SNR DENTONMore standard forms to look at2010 has also seen some new ideas on how to document risk and fundedparticipations of trade-related instruments like letters of credit.The market was just getting used to the BAFT (now BAFT-IFSA) form of masterwhen along comes the Loan Market Association with its ideas to cover traderelatedinstruments. If you go down this route, then you will need two Masters:one for funded and the other for risk participations. The LMA form for risk isbetter suited for trade but perhaps no better than sticking to BAFT. In any event itis grantor favourable; more so than BAFT. Whether it is used will depend on therelevant party’s position and how its counterparty will react.More interesting was the launch of the US complaint forms of BAFT-IFSAparticipation documents. This will need to be borne in mind when dealing with aUS counterparty who wants to ensure that the document reflects a “true sale” ofthe risk. Another one to watch out for.2011There are more things to watch out for so this may keep the lawyers anddraftsmen busy. All in all 2011 has much in store for the market.Geoffrey Wynne is a partner in SNR Denton UK and head of itsTrade and Export Finance practice. He also is vice-chairman of theDrafting Committee for the URF.Geoffrey WynneFor more information please contact Geoffrey:T +44 (0)20 7246 7050F +44 (0)20 7246 7777geoffrey.wynne@snrdenton.com10 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

SUB-SAHARAN AFRICAPost-crisis Africa: The new belle of the ball?There is one missing element in the numerous reports that have been written aboutthe allure of Africa as the “next frontier” for investors. This goes beyond the estimated6% growth rate in 2010 – more than double that of the developed world – and anincreasing consumer market that just reached a record 1 billion. Behind the statisticsand reports lies the impact of the global financial crisis on the continent’s psyche.Why is this important? Because the lessons learned from the crisis have caused a minirevolution resulting in a renewed African self-reliance – one can sense through theexplosion of infrastructure projects that in the next decade, many countries will betransformed, if not to the level of their BRIC counterparts then most certainlynearing them. This “mind transformation” has had a profound impact both on intra-African trade and on traditional trading partnership with countries beyond thecontinent.African traders have been hit hard by the crisis in the EU, which represents Africa’sprimary trading partners. Africa’s response to the foreclosures of many of itsinternational buyers, the drying up of investments and access to credit has been todevelop domestic markets to increase intra-regional trade with an eye to also attractinginvestors.In its stride towards strengthened regional integration, Africa has embraced the axiom“bigger is better” in order to increase market size and ultimately its appeal to investors.Although it still has a long way to go to bridge the gap with other regions such as Asia– intra-regional exports in Sub-Saharan Africa as a proportion of total trade accountsfor less than 10% in contrast to over 45% in developing Asia. Despite this lag, the EastAfrican Community (Burundi, Kenya, Rwanda, Tanzania and Uganda) made history12 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

SUB-SAHARAN AFRICAin 2010 by launching a common market of 130 million people, allowing the free flowof goods and people across all borders and the removal of tariffs.The countries in Eastern and Southern Africa are also vigorously pursuing a FreeTrade Area that would encompass a population of 568 million people and a GDP of$625 billion. While on the opposite coast the 15 countries of the EconomicCommunity of West Africa are moving toward stronger implementation of a policythat will lead to a Free Trade Area of about 300 million people. Increasedharmonization of policies and regulations will help decrease the overall cost of doingbusiness in Africa.Coupled with regional integration initiatives, African countries have started to addressone of the key contributors to the high cost of doing business – poor infrastructure.Lack of adequate roads, rail systemsand ports, and unreliable access toenergy and water has left manycountries at a competitivedisadvantage to counterparts inKenya is a prime example of theinfrastructure boom currentlytaking place in many Africancountries. The Kenyan governmentis working toward the realizationof their Vision 2030 plan that willsee the country elevate to a globalmanufacturing and services hub.other regions. The InfrastructureConsortium for Africa estimatesthat the cost of moving a tonne ofgoods in Africa costs between 4 and14 US cents versus 1 to 4 cents inother developing regions.In order to bring infrastructure tothe level of the 21st centuryspending needs to double to $93billion. This gap could decreasesignificantly with stronger efforts toenforce existing regulationsensuring that people who useresources pay their fees regularly.Notwithstanding payment lags byusers, African countries are taking aproactive stance. In East Africa, for instance, infrastructure spending is up for the period2010/2011 on average from 15 to 20 percent.Kenya is a prime example of the infrastructure boom currently taking place in manyAfrican countries. The Kenyan government is working toward the realization of theirVision 2030 plan that will see the country elevate to a global manufacturing andservices hub. Central to this objective is improvements to their roads and powernetworks. For the 2010/2011 budget Kenya has allocated a 20% budget increase ininfrastructure with $1 billion to be spent on roads alone.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 13

SUB-SAHARAN AFRICAIn addition to infrastructure and intra-African trade, the continent’s transformedmindset is also impacting on its trading relationships. In short, the emergence of Chinain Africa, which has increased trade with the continent by 92% in the last decade, is atthe forefront of the “new wave” oftrading partners in addition toIndia. Other non-traditionaltrading partners such as Russia,In addition to infrastructure andintra-African trade, the continent’stransformed mindset is alsoimpacting on its tradingrelationships. In short, theemergence of China in Africa,which has increased trade withthe continent by 92% in the lastdecade, is at the forefront of the“new wave” of trading partners inaddition to India.Brazil and Argentina are alsoemerging to stand along side thelikes of the U.S. and WesternEuropean countries as viablepartners.When likened to a dance star,Africa with its new clothes in theform of self-reliance and a fulldance card of willing partners willneed to be mindful of a fewpotential obstacles on its way to theball. The full slate of electionsscheduled to take place acrossAfrica in the next few years willplace into sharp focus the issue ofpolitical risk. A continued trendtowards peaceful elections such asthe one recently held in Tanzaniawill help recast the perception ofincreased risk that may be prevalentin the minds of investors. But Africa must also maintain its gains in improving itsbusiness climate – The World Bank’s recent Doing Business Report noted that theSub-Saharan region registered the most gains in terms of reducing barriers toconducting business.If it can maintain its footing, the next decade may well place Africa on the verge oftruly sustainable growth that will mean opportunities for many. ■Author:George OtienoCEOAfrican Trade Insurance Agencyinfo@ati-aca.org14 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARGhana’s summer blockbusterCocobod – pre-export financingBookrunning MLAs: Initial MLAs: Ghana International Bank, Natixis, Société Générale and Standard Chartered. InitialMLAs: Crédit Agricole, BNP Paribas, BTMU, China Development Bank, HSBC, ICBC, KfW IPEX-Bank, Nedbank, SMBCand Standard Bank. Borrower: Ghana Cocobod. Amount: $1.2 billion. Tenor: 1-year. Legal counsel: Denton Wilde Sapte.Ghana Cocoa Board’s (Cocobod) pre-export financing was a syndication blockbusterlast summer and was easily the largest soft commodity transaction in Africa during2009. Both those facts are noteworthy but what makes this a deal winner is that themandated lead arrangers secured the largest amount ever raised by Cocobod despite theworst financial crisis in a generation.Cocobod’s pre-export financing has become a fixture in the commodities calendar,becoming famous for ever-depreciating margins thanks to both its long history ofperformance and the previous availability of liquidity. At its lowest, in 2007, the deal carrieda margin of only 16 basis points (bp) over Libor and increased in 2008 to just 45bp.In April, Cocobod mandated Ghana International Bank, Natixis, Société Généraleand Standard Chartered as joint coordinating banks and bookrunning MLAs to arrangea $1 billion financing to fund the Ghanaian 2009/10 cocoa crop through a receivablesbackedpre-export finance term loan.The MLAs convinced Cocobod to raise the pricing on its loan in order to secure asuccessful syndication. This was in light of the crisis, the volatility surrounding the localcurrency – cedi, and the large exposures that many international banks had for Ghanawith two large oil project financings for Tullow and Kosmos earlier in the year.Bookrunners caused a stir in the market when they announced that pricing hadincreased fivefold with a margin set at 250bp and all in pricing at just above 350bp. Thedeal proved extremely popular. Even before the deal launched the coordinating bankswere joined by BNP Paribas, BTMU, Crédit Agricole, China Development BankCorporation, ICBC, HSBC, KfW IPEX-Bank, Nedbank, SMBC and Standard Bank asinitial mandated lead arrangers. This was one of the few deals last year to have banksqueuing to join the transaction.When the deal actually launched in the syndications market it achieved a significantoversubscription attracting over $1.7 billion in commitments with 33 international andGhanaian banks joining the transaction. Cocobod eventually scaled back commitmentsto $1.2 billion.Olivier de Muizon, MD and head of the structured softs commodity finance, withinthe natural resources and energy financing group at Société Générale, points out: “Weare very proud to be present in this reputable transaction. The annual pre-export facilityin favor of Cocobod has been successful once again in the syndication market with arecord amount reached – $1.2 billion – despite adverse market conditions in thecontext of a global financial crisis.“This new achievement evidences the trust lenders have in Cocobod, who hasdemonstrated over the years a solid, consistent performance and a very good reputationin the cocoa market. This success is all the more important for the Ghanaian cocoaorganisation as cocoa prices are currently high and Cocobod is looking to increasenational cocoa production.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 15

DEALS OF THE YEARBNPP leads for Medupi and KusileMedupi & Kusile – ECA-backed financingMLA: BNP Paribas. Borrower: Eskom Holdings. Amount: e1.185 billion. ECAs: Coface. Tenor: Medupi – 16-years, doorto-door.Kusile – 12-years, door-to-door. Lawyers: Allen & Overy for lenders; White & Case for borrower. Equipmentexporter: Alstom Power Systems France.In a dramatic conclusion to 2009, BNP Paribas (BNPP) acting as sole mandated leadarranger, documentation bank and French export credit agency – Coface – agent, structuredthis landmark a1.185 billion export credit for South Africa’s power generation companyEskom. The deal was signed on 23 December, 2009. These credits are the largest Cofacebackedfinancing granted to a South African counterparty so far.The financing is made up of two sister facilities: a a623 million Coface-backed facilityfor Medupi, and a 562 million Coface-backed facility for Kusile. The Medupi loan isdisbursed over four years, with a 12-year repayment. The Kusile loan is disbursed overfive years, with a 12-year repayment. There is 95% comprehensive cover on the facilities.Société Générale (SG), Crédit Agricole, Natixis and CIC acted as co-lead arrangers.The facilities were successfully syndicated over BNPP (36.7%), SG (21%), CréditAgricole (21%), Natixis (10.5%) and CIC (10.5%) out of each facility.In what was obviously a tight mandating contest, a BNPP spokesperson says: “InMarch 2009, Eskom launched a financial tender to select the MLA and the facilityagent to arrange a Coface-backed financing of over a1 billion to partially fund thedelivery of Alstom’s turbines for its supercritical power plants Medupi and Kusile. BNPParibas was selected thanks to its strong appetite, impressive export finance credentialsand aggressive pricing. We were able to secure an approval from the French authoritiesto cover on a corporate stand-alone risk basis, a a1.185 billion financing over 17-yearsdoor-to-door, including the funding of Coface premiums and IDCs, and to refinancepart of the contracts already paid.”As part of Eskom’s urgent power capital expenditure plans, the financing supports theengineering procurement construction (EPC) contract, entered between Eskom andAlstom for the delivery and the installation of 6x800 MW turbines for the Medupipower plant, and the EPC contract between Eskom and Alstom for the delivery and theinstallation of 6x800 MW turbines for the Kusile power plant. The work will be carriedout by contractor Alstom South East Africa (RSA), and Alstom Power Systems France,as sub-contractor.Medupi and Kusile are vital components in Eskom’s massive capacity expansionprogramme to meet an increase in demand and to confront the challenges of an ageingtransmission and generation system. Upon completion, Medupi and Kusile powerstations will represent almost 20% of the installed capacity in the country, and be someof the largest coal-fired plants in the world. ■16 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARLandmark deal for EthiopiaAshegoda – ECA-backed financingMLA: BNP Paribas. Borrower: Ashegoda Wind Farm project / EEPCO. Amount: e210 million. ECA/DFI: Coface, AFD.Tenor: Coface buyer credit: 3+8.5-years. Coface tied commercial loan: 1.5 +3.5-years. AFD loan: 4+11-years. Legalcounsel: Gide Loyrette Nouel.This deal, arranged by BNP Paribas (BNPP), will result in the largest wind farm in sub-Saharan Africa, and is the first ECA-backed export finance deal ever to be realised inEthiopia.The awarded deal is an engineering procurement construction contract involvingthe sale and installation of 120 MW GEV HP wind turbines at Ethiopia’s AshegodaWind Farm over a period of three years, with the first 30 units to be delivered in 2010.“This EPC contract – along with annual energy production of 400 to 450 GWH – isin line with the government of Ethiopia’s energy policy,” says Myriam Ouazzani, vicepresident export finance Middle-East and Africa at BNPP, and responsible for the deal.“In response to the fast-paced growth of domestic demand, its intention is topotentially export electricity to neighbouring countries.”The financing of the Ashegoda deal breaks down into three tranches. The first is aa130 million buyer credit, covered by French export credit agency Coface, with a doorto door maturity of 11.5 years (3 years + 8.5 years).BNPP is MLA with a 58% share with Société Générale (SG) and Credit Industrial etCommercial (CIC) as arrangers with 25% and 17% shares respectively. This facility isguaranteed by the Commercial Bank of Ethiopia (CBE).The second tranche is a a33.6 million tied commercial loan, also covered by Coface,with a total tenor of five years (1.5 +3.5 years). BNPP again held a 58% share, similarlywith SG and CIC as arrangers with a 25% and 17% shares. This loan is guaranteed bythe Ethiopian MoF.The third tranche of a45 million is 100% extended by the Agence Francaise deDéveloppement (AFD) for a door to door maturity of 15 years (4 +11 years). It isguaranteed by CBE.The bid process included stiff competition from Chinese and Spanish firms. SinceMay 2008, BNPP supported Vergnet Group, the Orleans-based contractor in its bidprocess to supply the wind turbines and their installation.Partly due to this support, the bank secured the a210 million contract with theEthiopian Electric Power Corporation (EEPCO) in October 2008. The followingmonth BNPP was mandated as MLA by EEPCO.Ouazzani continues: “It is not only the largest deal signed by Vergnet but the first dealsigned ever between France and Ethiopia. This highly visible transaction is of greatimportance for BNP Paribas’ relationship with French industrials and with EEPCO inparticular, as it paves the way to future and ongoing deals and it is the bank’s firsttransaction in Ethiopia.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 17

DEALS OF THE YEARBreaking records in NigeriaAfrican Foundries Limited – DFI financingMLA: Citi. Borrower: African Foundries Limited. Amount: $75 million. Tenor: 7-years. DFIs: FMO, Emerging AfricaInfrastructure Fund, and Finnfund. Lawyers: Norton Rose.Citi’s wins an award for an inspiring DFI-supported financing for Nigerian borrowerAfrican Foundries Limited (AFL). He firm specialises in castings for the engineeringmining, quarrying and other solid minerals processing industries.The deal contained several firsts and shows what a determined arranger can achievedespite the most difficult of financing environments. The deal is the first cross-borderfinancing for AFL and Citi receives special mention for attracting a significant numberof DFIs. In addition the deal secured a tenor of seven years for the DFI tranche, a recordfor a Nigerian borrower, and even more impressive given the overarching financialclimate in which the deal closed.The $75 million financing will be used by AFL to construct a reinforcing bar (rebar)plant with a capacity of 225 MT per annum. The plant will supply rebars to theinfrastructure and housing sectors of the Nigerian market, with a further potential ofexports of the products to the neighbouring Ecowas countries.The financing was highly structured and benefited from a comprehensive securitypackage which entailed “project finance style security” according to sources close to thedeal.AFL will produce rebars using local scrap metal as the main raw material, which willprovide a significant environmental benefit to Nigeria. Having the involvement of theDFIs on the deal ensured a thorough environmental and technical due diligence. Inaddition AFL is committed to both an environmental and social action plan (including afuture ISO certification).Myrjam Tschoeke, director, export and agency finance at Citi Frankfurt: “Thefinancing for African Foundries Limited was closed in record time considering thestructured nature of the deal, the political turmoil in Nigeria at the time and thenumber of lenders involved. The DFIs demonstrated that they are supporting indifficult circumstances.” ■18 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARBanks combine to power EskomEskom – ECA-backed financingMLAs: KfW IPEX-Bank; BTMU; Deutsche Bank; HSBC; Standard Bank of South Africa; Nedbank; Rand Merchant Bank.Borrower: Eskom Holdings. Financial adviser: ANZ. Amount: e705 million. ECAs: Euler Hermes. Tenor: 18-years.Lawyers: Allen & Overy; Edward Nathan Sonnenbergs for lenders; White & Case for borrower. Eqpt exporter: HitachiPower Europe.South Africa’s infrastructure needs are considerable, and the power sector has probablymore urgent needs than most. So it comes as little surprise that the government hasmade power generation a priority.This deal is another in the cycle of purchasing arranged by South African powerprovider Eskom. Australian bank ANZ acted as financial adviser to Eskom. The resultantfinancing provided export finance to Eskom at a critical time when the companyneeded to close funding gaps for its largest investment project.What makes this particular deal special is how three European banks – KfW IPEX-Bank, Deutsche Bank and HSBC, and the London office of a Japanese bank – BTMUcame together with South African banks – Standard Bank of South Africa, Nedbankand Rand Merchant Bank to act as MLAs and fund a a705 million ECA-backedfinancing package in record time. The financing is one of the biggest export financetransactions in South Africa for years.The structure has the unique aspect of export credit agency Euler Hermes providingcover for a South African rand (ZAR) tranche. This allowed Eskom greater flexibility inthe financing, and in turn was the catalyst bringing in the South African banks into theexport financing.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 19

DEALS OF THE YEARSigned on 11 December 2009, the financing was completed in only six weeksbetween RfP and signing. This was enabled by cleverly building on previouslynegotiated, well defined ECA documentation. The deal also has a particularly longtenor of 18 years.The a705 million is split into three facility agreements, all covered under a singleEuler Hermes export credit cover. These consist of:• A a345 million floating rate facility: involving KfW IPEX-Bank, HSBC, Bank ofTokyo Mitsubishi and Deutsche Bank• A a100 million fixed rate facility: involving KfW IPEX-Bank• A a260 million (equivalent) ZAR floating rate facility: involving Standard Bank ofSouth Africa, Nedbank and Rand Merchant Bank.KfW IPEX-Bank is the documentation bank, ECA agent, and euro floating ratefacility agent. Standard Bank of South Africa is the ZAR floating rate facility agent.The financing helps to fund six boilers each of 800MW for Eskom’s Kusile powerstation, which at 4,800MW is one of the largest in the world. The ECA covered loanfinances the export contract of Hitachi Power Europe, the German-based supplier ofthe boilers. It should be noted that this Eskom financing is entirely separate to the BNPParibas-arranged $1.185 billion Medupi/Kusile financing.Andreas Ufer, global head power renewables water at KfW states: “The fast tracksolution of only six weeks between RfP and the signing of three loan agreements for atransaction of this size with seven banks was only possible by building on ourexperience from the Eskom Medupi project and the outstanding cooperation betweenEskom, the ECA adviser ANZ, the legal adviser Allen & Overy and the banks. TheHermes covered ZAR tranche is a novum and has added value for Eskom.”At ANZ, Paul Richards, global head of structured export finance, remarks: “We aredelighted to have advised Eskom on this milestone transaction utilising our exportcredit structuring and advisory capabilities. The transaction is the first time EulerHermes had covered a South Africa rand tranche provided by local lenders in a dualcurrency buyer's credit facility. A lot of work was done with the SA banks, internationalbanks and Hermes to put it together.” ■20 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSolid teamwork for Ghana powerTakoradi – ECA-backed financingMLA: Société Générale (Canada). Borrower: Ministry of Finance and Economic Planning of Ghana. Amount: $194.3million. Tenor: 1.5+12-years. ECA: Export Development Canada (EDC). Lawyers: Heenan Blaikie (Montreal); Oxford &Beaumont (Ghana). Equipment suppliers: Magellan Aerospace; HPI.The Takoradi project is a remarkable deal in that it is the largest ever export creditgranted in Ghana, involves many subcontractors and is the first government-togovernmentagreement signed between Canada and Ghana.The purpose of the financing is the turnkey construction of a thermal power plantwith a capacity of 132MW on the Ghanaian coast, at Aboadze, near Takoradi. To achievethis, Société Générale had to coordinate the efforts of three different geographicalteams, in Paris, Montreal and the local subsidiary in Ghana.The $194.3 million deal benefits from Export Development Canada (EDC)providing a buyer credit for 100% of the commercial contract under the two tranches.EDC covers 95% of the total, the remaining amount being Société Générale’s residualrisk. The signatory of the government to government contract was CanadianCommercial Corporation, and the main subcontractors are Toronto-based MagellanAerospace which will produce the gas turbine package; Houston-based HPI willprovide the engineering; and Abbotsford-based AKSA Management will provide thecontract management. Legal counsel came from Heenan Blaikie in Montreal andOxford & Beaumont in Ghana.Benoit Desmarais, managing director, export finance, at Société Générale inMontreal, comments: “Because of the large number of parties involved in thetransaction it has been a real challenge to put it together. Thanks to the willingness ofeveryone and the great team spirit we have succeeded in closing the financing of thisvery important project for the country of Ghana.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 21

DEALS OF THE YEARSmart framework made for TransnetTransnet – ECA-backed frameworkGlobal ECA coordinator and MLA: Barclays Capital. Agent: Barclays Bank. Hedging provider: Absa Capital. Lender:Absa Bank. Borrower: Transnet Limited. Amount-to date: 3 Finnvera-backed deals – ZAR884 million; 1 Atradiusbackeddeal – ZAR538 million. ECAs: Finnvera; Atradius. Tenor: Up to 10 years post delivery. Lawyers: Simmons &Simmons; Edward Nathan Sonnenbergs; Castren & Snellman.This financing for South Africa’s Transnet, coordinated by Barclays Capital was thecompany’s first rand (ZAR)-denominated export credit agency (ECA) financingfacility. The ECA umbrella framework was backed by Finland’s Finnvera and Atradius ofthe Netherlands to support the procurement of equipment for the ports of Durban,Ngqura and Cape Town.Barclays Capital acted as the adviser to Transnet and, in conjunction with Absa Capital,acted as the sole mandated lead arranger and underwriter, for the multi-loan ECA facility.The initial agreement with Finnvera was signed in April, for an amount up to ZAR915million ($123 million). The Atradius package was signed on 24 November, 2009.In one of the first loan facilities, the proceeds of the funding were used for thepurchase of straddle carriers and rubber-tyred gantries for the container terminal inDurban, the newly upgraded container terminal in Cape Town, and the Ngquracontainer terminal. The equipment supplier was Kalmar Industries of Finland. Thepurchases come under Transnet’s five-year ZAR80 billion capital expenditureprogramme.22 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARA spokesperson for Barclays Capital says: “This transaction is structured to provide aninnovative multi-project, multi-supplier, multi-ECA framework solution that allows anunlimited number of ECA financings to be entered into over the life of Transnet’sCapex programme by utilising a common framework. The financings to date have beendenominated in rand – a first for both Finnvera and Atradius and, we believe, for anyECA financing – for euro-based contracts and without the requirement of a SouthAfrican government guarantee. The facility has enabled Transnet to access a pool ofalternative funding at a price which is comparable to the domestic bond market.The facility is also a landmark transaction for Finnvera, as it incorporates fixed-raterand funding for euro-based contracts, significant flexibility on the provision of foreigncontent cover and a framework to accommodate other contracts going forward.Chris Wells, Transnet’s acting group chief executive at the time, said: “We are pleasedto have leveraged the benefits of the ECA umbrella facility to secure competitivelypriced financing with long tenors. In the prevailing complex market conditions, theflexibility provided by an alternative source of financing represents an invaluable tool inimplementing our long-term growth strategy. With the support of Barclays Capital, wehave been able to obtain long-term rand financing, on a stand-alone basis, without fullcrystallisation. The bottom line is that we are accessing a deep pool of alternativefunding at a price which is comparable to the domestic bond market.”Crystallisation means that in the unlikely event that Transnet defaults, the portion ofthe loan to be repaid will have to be repaid in the original currency (namely, euro).Richard Wilkins, director – capex financing solutions, Barclays Capital, comments:“The ECAs, including Finnvera and Atradius, have demonstrated a very receptiveapproach in providing their support tailored to Transnet’s requirements. Using ourstrong local knowledge and balance sheet, and structuring skills, we were able toovercome issues with crystallisation and achieved a premium discount given that thefacility was denominated in rand.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 23

DEALS OF THE YEARLocal flavour for Nigerian cocoa producerAgro Traders – trade finance revolverMLA: Stanbic IBTC Bank. Borrower: Agro Traders Limited (ATL). Amount: $15 million. Tenor: Average life = 8 months.Lawyers: Banwo & Ighodalo, Nigeria – for lenders; AbdulRahman Yusuf & Co, Nigeria – for borrower. Collateralmanager: Drum Resources UK.Diversification of the Nigerian economy is vital to the country’s development. Onesector that is ripe for targeting is agriculture, although very little financing has beenavailable to date largely because of the scarcity of lenders. This transaction breaks thatpicture. It is an overall $15 million revolving trade finance facility for Nigerian cocoaproducer Agro Traders Limited (ATL), proving that deals can get done where there isdedication, expertise and above all local input.The local presence in this case is arranger Stanbic IBTC Bank, a product of themerger between IBTC Chartered Bank and Stanbic Bank Nigeria Limited. It is nowpart of the Standard Bank Group. This deal is the first structured trade financetransaction originated and closed by Stanbic IBTC. In addition, it is arguably the firstsuch transaction to be provided in Nigeria by a local bank to a local exporter withdocumentation undertaken by a local legal counsel.On a wider footing, the transaction also represents one of the first applications ofStandard Bank Group’s dedicated trade finance line from IFC to support trade to andfrom the sub-Sahara Africa region. Although the structure of this deal is a traditionalpre-export finance structure for cocoa used elsewhere, it is relatively new to theNigerian market.Importantly, the deal provides much needed access to US dollar funding and liquiditysupport to a local commodity trader at a time when a number of banks, both local andinternational, were withdrawing their US dollar liquidity lines and/or applying punitiveinterest rates to Nigerian corporate borrowers due to the global financial crisis, and thecrisis engulfing the Nigerian banking sector.The overall $15 million funding is split into two tranches. Tranche A is for up to $15million to finance the main crop cocoa harvest in October 2009. Tranche B representsthe amount already repaid under Tranche A, for up to $5 million to finance the lightcrop cocoa harvest in May 2010. The aggregate utilisation under tranches A & B maynot exceed the facility amount. There is also a $4.5 million limit available to cover theforward exchange contract in respect of the borrower’s currency hedging requirement.The facility is short-term, revolving and self-liquidating – the average life of thefacility is eight months. Drawdown is only permitted against warrants (warehousereceipts) issued by Drum Resources UK, acting as the collateral manager for the bank.Repayment of the loan is from the proceeds of the offshore US dollar receivablesgenerated from ATL’s sale of cocoa to a panel of pre-approved offtakers (Cargill, WalterMatter, Natra etc).Olu Ajayi, head of structured trade finance at Stanbic IBTC in Lagos, comments: “Thedeal was put together at a difficult time in the Nigerian banking sector and demonstratesStandard Bank Group’s commitment to and support for the Nigerian government initiativeto regenerate and grow the agriculture sector as a major export sector and foreign exchangeearner away from the dominance of the oil sector.” ■24 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARKey Swedish connection for MozambiqueMCEL – ECA-backed financingMLAs: BHF-Bank, KfW IPEX-Bank. Borrower: Moçambique Celular. Amount: $28 million. ECAs: EKN, SEK. Tenor: 8.5-years. Eqpt exporter: Ericsson. Legal counsel: Pimenta, Dioniso & Associados.This important telecoms financing transaction in Mozambique can be expected to actas a template for all other borrowers in the African region. The deal demonstrates aremarkable strategic quality and an example that in difficult times, some commercialbanks are still prepared to provide medium-term commercial loansThe transaction finances a number of purchase orders concluded betweenMozambique’s Moçambique Celular (MCEL) and both Ericsson AB Sweden andEricsson South Africa for the supply of telecommunications equipment, softwarelicences and related services for the extension and upgrades of MCEL’s network.The facilities, amounting in total to approximately $28 million, have been used tofinance the deliveries and services along with 100% of the EKN insurance premiumwith a total tenor of 8.5 years.EKN, the Swedish export credit agency, insures 85% of the financing and covers 95% ofcommercial and political risk. In addition there is an uncovered commercial facility with atenor of three years in order to finance the 15% down payments.Further support was given by SEK, the Swedish export credit corporation, byproviding mcel with a very attractive fixed market rate, a natural hedge against futureinterest rate fluctuations.Sylvia Sedlacek, within structured export finance at BHF-Bank, says: “So far most of theprojects in the public sector in Mozambique are financed by international donors. Thisfinancing is one of the exceptional examples of financing for a state-owned entity inMozambique without recourse to local public support and on commercial terms andconditions.”The challenge with this deal was bringing such a long-tenor facility with acompetitive fixed interest rate to a conclusion in the midst of the economic downturnand credit crunch at the beginning of 2009.Wolfgang Kassel, global head of telecommunications and the media financedepartment, KfW IPEX-Bank, comments: “Financed by BHF-Bank and by KfWIPEX-Bank as strong supporters of European economy exports, this Swedish-Germanexport finance project will serve to boost the competitiveness of MCEL whilstproviding additional network capacity to soak up the growing demand.”Strong commitment and flexibility of all the parties involved helped contribute tosuccessfully conclude this transaction. The lenders very much appreciated the flexibilityand cooperation of EKN and SEK, the support of Ericsson, and the professionalism ofMCEL in particular, in having all local approvals in place in record time, as well as theprofessional advice of the Maputo-based law firm Pimenta, Dioniso & Associados. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 25

DEALS OF THE YEARScoring an Angolan goalSonangol – pre-export financingMLAs: Crédit Agricole with Bank Espirito Santo International, BNP Paribas and Société Générale joining as seniormandated lead arrangers. Borrower: Sonangol. Amount: $1.5 billion. Tenor: 40 months. Lawyers: Lenders: Linklaters,Borrower: Norton Rose.This deal was impossible to ignore last year. The deal achieved a string of benchmarks,and was not only the largest loan in Africa last year but also the largest EMEAunderwriting in 2009. Crédit Agricole led a genuine syndication and startled themarket when it agreed to fully underwrite a $1 billion pre-export financing forAngolan state-oil producer Sonangol, a bold move when many syndications feel quietlyby the way side in this period and the syndications market was in near paralysis.Crédit Agricole was confident in both the structure and the appetite for thisfinancing. As Gilles Sayer, executive director, head of Asia and Africa, structuredcommodity finance at Crédit Agricole explains: “When the deal launched the marketwas still in shock from the financial crisis and the market was surprised by the bank’smove. But we are in the business of supporting our core customers and therefore whenSonangol knocked on our doors during the second quarter of 2009 we were ready tooffer them a solution. The deal was also an improvement from the point of view of thebanks with the reduced tenor and higher margin.”Margin on the deal was set at 300 basis points over Libor with a participation fee of150bp for banks contributing $150 million. Bank Espirito Santo International, BNPParibas and Société Générale joined the deal as senior mandated lead arrangers. Thedeal subsequently oversubscribed from its $1 billion launch amount with Sonangolagreeing to take the full amount. This deal was the fourth time that Sonangol has used afinancing based on the receivables purchase agreement. The deal was structured as anamortising receivables purchase facility which relied on an agreement betweenSonangol the producer and Sonangol Finance Limited, the borrower. Unlike atraditional pre-export model, which relies on just one identified offtaker over the termof the loan, lenders in the Sonangol deal received payment on the back of proceedsfrom a group of offtakers from the sale of crude oil deliveries every month.Proceeds from the sale were then fed into a collections account held at CréditAgricole in London to be distributed to the syndication of banks. The total debt wasdivided into 36 monthly repayments.Sayer adds: “It is still based on the sale of crude oil by Sonangol to quality offtakers asSonangol customer base is generally known. The customer wanted to deal with a singlebank and wanted fast delivery of the financing and didn’t want to discuss this with alarge number of banks. We decided form the beginning to follow exactly the samestructure as we didn’t want to waste time on reinventing a structure that worked. Thestructure used has been proven to work and we were satisfied with it.”In total 14 banks and one institution joined the facility representing a diverse group ofinvestors. The deal attracted 10 European, three Asian and two African banks, and attractedfive new lenders who had never previously participated in a Sonangol transaction. Thenumber of different banks and the size of the oversubscription reveal just how popular thisdeal really was. Crédit Agricole deserve credit for structuring a genuine syndicationsuccess story last year. ■26 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

TOP REGIONAL BORROWERS & LENDERSTop 10 borrowers for Sub Saharan Africa trade finance (includingbilateral) 1 Jan - 29 Nov 2010Deal valuePos. Borrower US$ m No. %Share1 BP Angola 2,500 1 37.12 Ghana Cocoa Board - COCOBOD 1,500 1 22.33 Botswana Power Corp - BPC 825 1 12.34 Ministry of finance of Angola 576 7 8.65 Gabonese Republic 228 3 3.46 Eskom Holdings Ltd 202 2 3.07 Compagnie Miniere de l'Ogooue - Comilog 157 1 2.38 Export trading CO Ltd 120 1 1.89 Ministry of Economy & Finance of Gabon 116 1 1.710 Ministry of Finance & Economic Planning of Ghana 114 2 1.7Total 6,731 29 100.0Source: DealogicTop 10 MLAs for Sub Saharan Africa trade finance (includingbilateral) 1 Jan - 29 Nov 2010Deal valuePos. Arranger US$ m No. %Share1 BNP Paribas 1,128 10 16.82 SG CIB 851 6 12.63 Industrial & Commercial Bank of China - ICBC 606 3 9.04 Natixis 588 3 8.75 Standard Chartered Bank 510 3 7.66 HSBC 506 4 7.57 ING 436 4 6.58 Standard Bank 428 2 6.48 Mitsubishi UFJ Financial Group 428 2 6.410 Credit Agricole CIB 261 4 3.9Total 6,731 29 100.0Source: DealogicTRADE FINANCE The Guide to Global Trade Finance Markets 2011 27

THE AMERICASTrade Finance in LAC – an IDB PriorityTrade finance is expanding in Latin America and the Caribbean (LAC) thanks in largepart to the work of the Inter-American Development Bank (IDB). IDB, through theFinancial Markets Division of the Structured and Corporate FinanceDepartment, continues to be strategically positioned to offer market-friendly tradefinance instruments to the region while promoting integration, job creation and GDPgrowth. Highlights this year include the expansion of the Trade Finance FacilitationProgramme (TFFP), trade finance funds and trade finance training opportunities.The IDB’s TFFP, launched in 2004, proves to be an effective tool for not only mitigatingthe effects of the liquidity crisis but also expanding trade finance for financialintermediaries (FIs) and their clients. Recognizing the counter-cyclical role thatinternational trade plays to promote the exchange of goods and services, create jobs,enhance national production and foster inclusive economies, the TFFP is committed tostrengthening supply-side capacity and trade-related infrastructure in LAC.A highly efficient delivery platform, the TFFP provides guarantees and loans that allowimporters and exporters to reduce systemic and transaction risks, access new capitalsources and strengthen competitiveness without subsidizing and distorting the market.The TFFP launched an A/B loan product to target the liquidity shortage by directlyfunding our FI clients’ trade-related activities. Guarantees continue to enable the LACnetwork of Issuing Banks to access a broader number of international ConfirmingBanks.The TFFP has approved over US$1.2 billion in credit lines and issued guarantees forover US$800 million in support of over 1,000 individual international tradetransactions totaling over US$1.0 billion. The TFFP has built a network of 72 IssuingBanks in 18 countries, and 73% of them count on small and medium enterprise (SME)lending as their main business focus. In 2010, of the 13 Issuing Banks approved, 100%of them are dedicated to the SME market.28 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

THE AMERICASThrough our network of international Confirming Banks, the programme is nowpresent in 53 countries worldwide with 240 Confirming Banks belonging to 88 bankinggroups. Banks that were already Confirming Banks are now re-joining as B Lenders –furthering the virtuous cycle and maintaining a constant source of trade financing.“The trade finance momentum at the IDB has benefited not just FIs in large, wellconnectedcountries. The TFFP strives to work with FIs in smaller economies whichfinance traditionally small and medium importers and exporters. Such SMEs play acritical role stimulating employment, reducing poverty, deepening intra-regional tradeand fostering a robust and inclusionary real sector,” commented Joao Vianei da Silva,TFFP Senior Trade Finance Officer.In 2010, IDB approved new banks in Paraguay, Bolivia, Guatemala, Belize and CostaRica. Additionally, approvals are in the advanced stages for Issuing Banks in Suriname,Honduras and El Salvador.Another trend is the emergence of intra-regional transactions. In its initial stages, theTFFP promoted collaboration among its participating bank network. Little by littlecontacts formed between banks, and in subsequent stages, intra-regional, or “South-South,” trade deals transpired. Recent examples include IDB support for the import ofArgentinean hydroelectric turbines to Paraguay, export of Brazilian turbo generators toPeru and import of Argentinean automobiles to Honduras, among others.Leveraging TFFP client relationships, the IDB supports our network of Issuing Banksby seeking additional financing for their projects that are well-aligned with IDB’s corebusiness areas. In the last two years, 19 projects and US$520 million in IDB fundinghave been approved to finance, through financial institutions, green buildingconstruction, clean and renewable energy, affordable housing, trade, sustainableinfrastructure and micro, small or medium enterprises in the region.At the same time, IDB offers structured products through trade finance funds whichare dedicated to, among other purposes, SMEs. Trade funds offer a combination ofequity from a third-party trade finance facility coupled with IDB’s A/B loans. Theseuniquely structured funds respond to market demand and fill a critical void in localbanking sectors. In 2009 alone, these funds financed more than US$ 1 billion in tradeactivity.Extensions to existing funds, such as IIG Regional Trade Finance Facility and CreceraTrade Finance Credit Facility, will further increase access to trade finance across diversecountries, industries and collateral types. We will continue to expand our support forthese types of trade vehicles.“The financial sector, specifically FIs, is pivotal in catalyzing, diversifying andstabilizing the supply of trade finance in the region. LAC economies count on stablesources of trade finance to improve the production of goods and services which fosterTRADE FINANCE The Guide to Global Trade Finance Markets 2011 29

THE AMERICASTFFP Issuing BanksArgentina• BBVA Banco Francés• Banco Santander Río• Banco Municipal de Rosario• Banco Supervielle• Banco Patagonia• Banco Finasur• Banco Galicia• Banco Macro• Banco CMFBelize• Atlantic BankBolivia• Banco de Crédito de Bolivia• Banco BISA• Banco Nacional de BoliviaBrazil• Banco Industrial e Comercial–BicBanco• Banco Pine• Banco Industrial do Brasil• Banco Indusval• Banco Sofisa• Banco DaycovalColombia• BBVA Colombia• Banco de Bogotá• Banco Davivienda• BancolombiaCosta Rica• Banco Nacional de Costa Rica• Banco de Costa Rica• Banco Improsa• Banco LAFISE• Banco PromericaDominican Republic• Banco BHD• Banco Popular Dominicano• Banco de ReservasEcuador• Banco Guayaquil• Banco Pichincha• Banco de laProducción–Produbanco• Banco de Bolivariano• Banco InternacionalEl Salvador• Banco Agricola• Banco HSBC SalvadoreñoGuatemala• Banco G&T Continental• Banco Industrial• Banco Agromercantil• Banco InternacionalHonduras• Banco Ficohsa• Banco LAFISE• Banco de los TrabajadoresJamaica• First Global Bank• FirstCaribbean BankMexico• BBVA BancomerNicaragua• Bancentro• BanPro• Banco de FinanzasPanama• Banco Aliado• Global Bank Corporation• Banco General• Multibank• Tower Bank• Banco BBVAParaguay• Banco Itau• BBVA Paraguay• Banco Regional• Sudameris• Vision Banco• Banco ContinentalPeru• Banco Internacional del Perú–Interbank• Banco Interamericano deFinanzas – BIF• Banco BBVA ContinentalUruguay• BBVA Uruguay• Nuevo Banco Comercialproduct specialization, technology transfer, competitiveness and resistance to marketvolatility. We seek to level the playing field for smaller LAC economies which aretraditionally ignored or underserved,” commented Daniela Carrera-Marquis, FinancialMarkets Division Chief.To further enhance the effectiveness and inclusiveness of trade finance, Issuing Banksand their SME clients have benefited from an IDB specialized trade finance training.Training focused on supply- and demand-side barriers, knowledge-sharing, anddeveloping competitive advantages outperformed expected results. With an initial goal30 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

THE AMERICASof training 10 Issuing Banks and SME clients and 150-200 people, as of February2010, a total of 22 banks, 500 bank staff and 300 SME clients were trained in 7countries.In 2010, the IDB began to implement another round of trainings to further strengthenFIs’ and their SME clients’ skills. An e-learning platform is being developed to expandoutreach exponentially as well as incorporate a focus on sustainable trade whichincludes organic and fair trade opportunities.Complementary to our training efforts, IDB, as part of the beyondBanking programme,seeks to boost access to international trade markets for FIs through financial deepeningstrategies and products and services that target underserved market segments. InNovember 2009, beyondBanking was launched to encourage FIs in LAC to adoptsustainable social, environmental and governance practices. Through financing,technical assistance and knowledge sharing, beyondBanking recognizes the catalytic roleof FIs to promote economic growth and corporate change. It seeks to contribute tothe Bank of the Future – a bank business model which balances financial with socialreturns in order to foster an inclusive, environmentally-friendly and transparentfinancial sector. 1As the IDB enters 2011, we will further stabilize funding sources and extend outreachto more LAC FIs. The IDB is negotiating alliances with leading financial institutionsand development organizations in Asia, Europe and the US, expanding the TFFP’scapacity to provide more competitive, efficient and targeted products and services.One example is the recent Memorandum of Understanding signed by IDB and theExport-Import Bank of China, during the China-LAC Business Summit in Chengdu,China.Given IDB’s strategic position as a multilateral development bank with strong clientrelationships and financial instrument expertise, we will continue to uncoverinnovative and sustainable ways to reduce risks and expand opportunities for LAC FIsand their clients. Through our trade finance loans, guarantees and capacity-building,the IDB strives to further trade integration, job creation and poverty reduction in theyears ahead. ■Note:1 For more information, visit: www.iadb.org/beyondbanking.For more information on the TFFP, please visithttp://www.iadb.org/aboutus/departments/home.cfm?dept_id=SCFTRADE FINANCE The Guide to Global Trade Finance Markets 2011 31

DEALS OF THE YEARFilling a gap in LatAm SME trade financeLatin America Export Finance FundMLA/lead arranger: Inter American Development Bank (IDB). Participating banks: Bayern LB (syndication agent);KfW Ipex Bank; Espirito Santo Investment; Caixa Geral de Depósitos. Borrower: Latin America Export Finance Fund.Amount: $117.5 million (A loan $40 million / B loan $77.5 million). Tenor: A loan – 3-years; B loan – 2-years. Rating:Baa3 Investment Grade, Moody’s. Lawyers: Becker Glynn; Wilmer Hale.Latin American SMEs were particularly hardly hit by the credit crisis, so it wasrefreshing to see this strong collaborative effort that brings together a multilateralagency, commercial banks, and a commodity trade finance fund, step up to meet thischallenge head on. Throughout the crisis the fund in question performed well and thesyndication brought in two additional banks, making this an award-winning deal thatshows real innovation.In this transaction, the Inter American Development Bank (IDB) led, and was thelead arranger of, an IDB A/B loan that included four global commercial banks aslenders. The $117.5 million loan was made to Latin America Export Finance Fund(LAEFF), a commodity trade finance fund established in 2003. The IDB contributed$40 million to the facility and the B lenders contributed a total of $77.5 million. Theinvestment strategy of the fund is to provide secured, collateralised pre-export and postshippedtrade finance loans to small and medium sized (SME) Latin Americancompanies, primarily in Brazil, Peru and Argentina, with expansion to other countriesin the region in the future.The loan facility has a tenor of three years for the A loan and two years for the Bloan, and was created to expand the reach of LAEFF in their SME-focused tradefinance fund. The facility is part of an IDB priority to support SMEs in Latin America32 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARwith new and innovative financing sources for trade finance that is so critical in theregion. The facility is secured by a pledge of the commodities and products that thefund is financing and will be repaid in quarterly payments in the final year of the loan(three years for the A loan and two years for the B loan).Daniela Carrera, chief, financial markets division of the structured and corporatefinance department at the IDB comments: “We are pleased that our deal with LAEFFcould mobilise capital, increase access to trade finance and strengthen trade and exportdevelopment, especially for small and medium sized enterprises that are active in trade.This transaction is directly aligned with IDB’s commitment to promoting the growthof SMEs that are critical players in Latin America’s long-term economic growth andprosperity.”Gema Sacristan, senior investment officer at the IDB who was responsible for thetransaction was equally enthusiastic. She says: “At a time of financial crisis anduncertainty, IDB’s A/B loan succeeded in further engaging key international banks inthe region. It is this counter-cyclical approach that allows us to continue supporting ourclients, mobilizing additional capital from B-lenders and promoting regional trade flowsand integration.”Robert Klein, president of Crecera Finance Company, the manager of LAEFFagrees: “We were extremely pleased with the strong support we received from the IDBduring the difficult times of the past several years. The ability to close this transaction is akey indication of the importance of this sector and the quality of the fund’s assets. Withthe continued support of the IADB and participating banks, we will be more able tosuccessfully finance the SMEs that rely so much on our capital.“As liquidity in the bank market was constrained due to the crisis, SMEs wereaffected more substantially than the larger companies in the region. The lack offinancing is even more acute for agricultural and commodity producers that are tied toseasonal production. This facility helps enable the fund to continue to provide a steadysource of funding for these companies.”James Prusky, head of business development for Crecera comments on the role of theB-lenders: “We have been very happy in working with the IDB on this transaction, butare also appreciative of the strong support the fund has received from the diverse andhighly qualified group of B-lender banks. Several banks have worked with the fund fora number of years and several banks are new to the transaction, but they all share acommitment to the export and commodity finance sector and appreciate the value inworking with a well diversified fund that focuses on SMEs.”Prusky concludes: “The financial crisis has proven very difficult for Latin AmericanSMEs, but the fact that this deal was able to close when it did while also bringing newbanks into the transaction is a testament to the viability and strength of this market.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 33

DEALS OF THE YEARTapping the local bank marketPacific Rubiales – reserve based lendingMLAs: BNP Paribas; Bancolombia; Banco de Bogota; Banco de Occidente; Calyon; Davivienda; WestLB. Borrower:Pacific Rubiales Energy. Amount: $250 million. Tenor: 4 years and 2 months. Lawyers: Latham & Watkins; PosseHerrera Ruiz; Arias Fabrega & Fabrega (for lenders); Proskauer, Cardenas y Cardenas (for borrower). Financialadvisor: Endeavour Financial.The Pacific Rubiales Energy (PRE) reserve based lending (RBL) deal wins an awardfor being the largest RBL in Latin America, successfully syndicated for a considerableinitial borrowing base during very tough market conditions. It is also the first RBLsyndicated in Colombia with the participation of local banks, demonstrating how newsources of liquidity have had to be tapped to ensure the success of larger deals.The deal was led by BNP Paribas, Bancolombia, Banco de Bogota, Banco deOccidente, Calyon, Davivienda, and WestLB.At the beginning of 2009 PRE needed to secure financing to carry out its ambitiousgrowth programme, which included the construction of the Oleoductos de Los Llanospipeline and further drilling and the revamping of existing facilities. This transaction,coupled with the loan granted by Grupo Aval entities in Colombia, allowed PRE todevelop its capex programme and achieve, ahead of time, the target production set foryear end 2009, which was to have a production of 100,000 bpd from the Rubiales field.The transaction, which includes a mandatory hedging programme, was a success andsyndication brought more than the intended $250 million. Several challenges werefaced, tight market conditions being the prime concern coupled with a low WesternTexas Industrial benchmark oil price – a key part of an RBL deal.BNP Paribas acted as global coordinator structuring and syndicating the deal. DiegoMejia, structured finance oil and gas Latin America at the bank, recalls: “The RBL wassyndicated and closed in the midst of the crisis at a time when liquidity was scarce.However, the deal’s structure allowed other international banks to participate and despiteit being new to local banks, we managed to bring them into the transaction and thusraised the funds needed by the client at a crucial time for their development plans.” ■34 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARPaving the way to investment gradeFibria – pre-export financingCoordinating MLAs: Bank of America Merrill Lynch, Deutsche Bank, JP Morgan. Further MLAs: Banco Bradesco;Banco do Brasil; BNP Paribas; Calyon; ING; Banco Espirito Santo. Borrower: Fibria Celulose. Amount: $1.175 billion.Tenor: Tranche A: five-years; Tranche B: seven-years. Law firms: Milbank, Tweed, Hadley & McCloy; White & Case;Souza, Cescon, Barrieu & Flesch Advogados; Hughes Hubbard & Reed.The Fibria deal stands out as it was the first syndicated trade loan in Brazil since thecrisis. Deutsche Bank acted as the lead coordinating bank among three coordinatingjoint lead arrangers and bookrunners with Bank of America Merrill Lynch and JPMorgan.Based in Brazil, Fibria, the result of the merger between Votorantim Celulose ePapel and Aracruz, is the world’s largest market pulp producer with approximately37% global market share in eucalyptus pulp with expected revenues for 2009 inexcess of $3.5 billion.The deal was structured as a $1.175 billion secured export-backed facility forAracruz Trading International, fully guaranteed by Fibria Celulose, Brazil’s pulp andpaper giant, and is divided into a five-year amortising $750 million tranche, and aseven-year amortising $425 million tranche.This deal was a key strategic part of Fibria’s over-arching liability managementplan to reduce its leverage, increase the average life of its debt, smooth its debtmaturity profile (eliminating short and medium term refinancing risk), and continuewith its investment programme, growth and expansion.Other components of Fibria’s liability management plan were also served byDeutsche Bank’s global markets division, which provided Fibria with an asset sale of$1.43 billion and a bond mandate of $1 billion.Not only was this the first syndicated trade finance loan in Brazil since thefinancial crisis began, but it is also only the second syndicated trade finance loanclosed in Latin America in 2009. Thanks to teamwork between the differentDeutsche Bank businesses, the client also benefited from a comprehensive solutionthat enabled it to recover its investment grade rating.Joao Galvao, director of structured trade and export finance, at Deutsche BankNew York elaborates on the importance of the deal to Fibria: “The facility was afundamental part of Fibria’s liability management plan which allowed the companyto: (i) reduce its leverage, (ii) increase the average life of its debt, (iii) smoothen it’sdebt maturity profile (eliminating short- and medium-term refinancing risk), and (iv)continue with its investment programme, growth and expansion.”Juan Martin, managing director and head of trade distribution and EM loantrading Americas, at Deutsche Bank New York, further complements: “Fibria’sliability management plan consisted of three pilars: The facility, an international bondissuance and an asset sale. The syndicated loan market received the facility in apositive way, with twelve banks participating and supporting the company in pavingthe way to return Fibria’s unsecured debt to investment grade status.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 35

DEALS OF THE YEARBrazilian pulp solutionVCP – ECA-backed financingMLAs: BNP Paribas; HSBC. Borrower: VCP Celulose Sul-Matogrossense. Amount: $182 million. Tenor: 8.5-years.Guarantor: Votorantim Celulose e Papel (VCP). ECA: Finnvera. Lawyers: Norton Rose (UK); LMR (Finland); MachadoMeyer (Brazil). Equipment supplier: Andritz Oy; Metso Power Oy.This transaction was the first ECA-supported facility for Brazilian pulp producer VCP(Votorantim Celulose e Papel, now as a result of a merger known as Fibria) andrepresents a milestone for the company. Its structure finances equipment from twosuppliers within one document and was completed not just in difficult marketconditions, but also during VCP’s merger with Aracruz Celulose to form Fibria.VCP had contracted with Andritz Oy and Metso Power Oy of Finland to purchaseequipment for its new pulp production plant at Tres Lagoas in Brazil. In order tofinance/refinance its procurement, VCP engaged with the MLAs to seek an ECAalternative for the eligible portion of the equipment purchased.ECA financing was vital to VCP since it both provided an option for VCP todiversify its funding portfolio, and provided competitive terms at a time of liquidityconstraints in the market. Such financing would assist VCP to become – on completionof the Tres Lagoas plant – one of the largest pulp producers in the world.The $182 million 8.5 year Finnish ECA Finnvera-supported facility for VCPCelulose Sul-Matogrossense has a parental guarantee from VCP and is repayable insemi-annual instalments.Vitor Gabrielli, manager in the project and export finance division at HSBC inLondon, comments: “A landmark facility for the paper and pulp industry in Brazil andthe first ever ECA-supported financing for VCP, this financing underlines the merit forborrowers in using ECAs as a debt diversification tool. The facility reached financialclose with the credit crisis in full swing, and at the same time as VCP itself wasundergoing a merger with Aracruz, which itself had run into some financialcomplications. Finnvera and the lenders maintained their support throughout, backingthis core Finnish exporter sector and at the same time supporting a core client in Brazilwith the construction and financing of its world class Tres Lagoas pulp plant. This was ahigh profile, cost effective long-term financing solution achieved through the joined-upapproach taken by all the involved institutions.”Elise Regnault, at BNP Paribas’ (BNPP) London export finance desk, adds: “The$182 million Finnvera-backed facility was initiated in the midst of the crisis, with scarceliquidity in the market, and was closed at the time of the acquisition by VCP of Aracruz,which resulted in a complex transaction at a key time for VCP. Thanks to the verypositive coordination between HSBC and BNP Paribas as facility agent, with VCP andto the excellent support and cooperation with Finnvera.”Georges Curey, part of BNPP’s export finance Brazil team, concludes: “Given thatthe ECA product was new for the client, and that pulp and paper projects are classifiedinto category A and include a thorough environmental due diligence, the timeframe forclosing the facility in less than seven months was considered a success by all parties.” ■36 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARBrazilian success story for EurocopterMoF Brazil – ECA-backed financingCoordinating MLA: Société Générale (SG). Co-lead MLAs: BNP Paribas; Crédit Agricole; Santander. Borrower: Ministryof Finance, Brazil. Amount: Buyer credits e1.57 billion. Commercial loan e194 million. ECA: Coface. Tenor: Buyercredit – 17-years. Commercial loan – 7-years. Eqpt suppliers: Eurocopter (France); Helibras (Brazil).In this particular deal we see a remarkable success story for exports from the Europeanhelicopter manufacturer, Eurocopter, an EADS company, for the export of design,supply and construction of 50 type EC-725 helicopters to be supplied to Brazil‘s threearmed forces: the Air Force, Navy and Army. The commercial contract was initiallysigned by Eurocopter and its Brazilian subsidiary, Helibras, with the Ministry ofDefence (MoD) of Brazil back in December 2008. Financial signing took place on 30September, 2009. The complexity of all the financing schedules attached to thistransaction (see below) make it a worthy Deal of the Year.The commercial contract is one of the biggest helicopter export orders ever placed.Financing required for the fulfilment of the contract was a1.76 billion ($2.57 billion),requiring some heavyweight financial institutions. Société Générale (SG) rose to thetask acting as the coordinating mandated lead arranger (CMLA), with BNP Paribas(BNPP), Crédit Agricole, and Santander as co-lead MLAs. The financing that waseventually arranged by the commercial banks is backed by French export credit agency(ECA), Coface, guarantees.Isabelle Seneca, director at SG CIB export finance, and head of the bank’snegotiation team, remarks: “The financial package took nine months to deliver – arecord time for one of the largest ECA-backed trade financing loans. We were successfulthanks to all parties involved, for whom cooperation was at all times a key concept. TheParis and Sao Paulo bank teams of SG CIB and the banking pool: BNPP, Calyon andSantander together with the Brazilian MoD and Ministry of Finance (MoF) negotiatorsfocused together at the right time on a unique goal.”As far as the financing is concerned, the nature of the supply contract requires acomplex scheduling of payments arranged through Coface-supported buyer credits ofmore than a1.57 billion. Running parallel with this is a tied commercial loan of a194million. The financing package has been structured with the export credits split intoseveral tranches. This gives the borrower a more cost effective financial solution.Overall, there are eight separate buyer credits, as follows: a9.3 million, a70.8 million,a125.5 million, a149.6 million, a210.5 million, a315 million, a321.9 million, anda367.7 million – all covered by Coface. There are varying levels of tenor attached tothese credits, with the shortest being eight years, and the longest being 16.5 years; thelatter relating to a very long execution period of eight years, followed by an 8.5 yearrepayment period.“We have worked alongside the MoD and MoF of Brazil in order to select the mostcost efficient structure. This has been achieved by structuring the export credit intodifferent tranches, in full respect with the OECD guidelines for officially supportedexport credits. As a result, the all-in cost of the Coface buyer credit compares veryfavourably with any other financing structure, including the debt capital marketalternative,” says Diogo Ribeiro, financial engineer in the export finance department ofSG.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 37

DEALS OF THE YEARCommenting on the tenor of the transaction, Eric Allain des Beauvais, director forthe defence sector in the export finance department at SG, says: “By committing to lendsuch a large amount over such a tenor, SG CIB and its banking partners have showntheir full support to a very significant exporter: Eurocopter. They have alsodemonstrated their trust in Brazil’s sovereign risk quality, and in Brazil’s industrialdevelopment capacity.”Regarding the overall supply contract, Laurent Eurin, director of export finance –Brazil at SG CIB, says: “Out of Brazil, we can consider that this contract and all it entailsis a win-win scenario. France brings support to its aircraft industry and helps secure oneof the biggest helicopter orders ever placed. Nurturing a true production partnershipwith France, Brazil expands the export capacity of its aviation industry by aiding theassembly of helicopter components such as engines and electrical systems. As themandated lead arranger and agent of this transaction, we are particularly proud to havecontributed to the success of the operation.”As far as the exporter is concerned, Jean-Michel Cerf, vice president at customer,project and structured finance of EADS-Eurocopter, comments: “This long termfinancing has been possible thanks to an outstanding support of the French authoritiesand Coface since the beginning of the project, the steady involvement of the banksdespite the crisis, and the skill of the Brazilian and French negotiators.”Another major aspect which shines through in this transaction is how the Frenchbanks, who compete vigorously against each other in most arenas, managed to worktogether completely efficiently on this transaction and its complex arrangement ofpayments.Commenting on the deal at BNPP, Florence Favier, head of export financeAmericas, says: “The strong commitment of ECA core banks allowed Eurocopter toclose this deal. Indeed, at the time of the tender bid in Brazil, there was very littlecapacity available for this long term deal with an eight-year execution period because ofliquidity constraints.” She adds: “This deal reinforces the Eurocopter footprint in LatinAmerica, while extending the capacities of its existing subsidiary in Brazil and givingadditional references for its other clients in the region. An import part of the workinvolved will be performed in Brazil.” ■38 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARRobust structure for Brazil marketNorbe VIII & IX – ECA-backed financingInitial MLAs: BNP Paribas; Santander; Société Générale. Additional MLAs: Calyon; Banco do Brasil; Banco EsperitoSanto; HSBC; Caixa Geral de Depositos; NIBC; ING; WestLB; CIC. GIEK lender: Eksportfinans. Borrower: OdebrechtDrilling Norbe VIII & Odebrecht Drilling Norbe IX. Amounts: $1.344 billion (total), $770 million (commercial loan),$274 million (Eksportfinans guaranteed by GIEK), $165 million (Kexim direct loan), and $135 million (Keximguaranteed loan). Tenor: 12-years (ECA debt) and 10-years (commercial debt). ECAs: GIEK; Kexim; Eksportfinans.Operator: Odebrecht Oleo e Gas. Charterer: Petrobras. Equipment suppliers: Daewoo Shipbuilding; MaritimeEngineering and Aker MH AS.The Brazilian offshore sector was particularly busy in 2009, but the Norbe VIII and IXproject was not only the largest deal, but also the best structured and most keenlypriced. The Project consists of the financing of the construction of two dynamicallypositioned drilling ships equipped to operate in water depths of up to 10,000 feet. Twospecial purpose companies, Norbe VIII and Norbe IX, were established to raisefinancing, build, own and charter the drilling ships. Once completed, the drilling shipswill be chartered to Petrobras under ten-year contracts. The charter agreements can beextended for an additional ten year period, subject to price negotiation.Brazil’s Odebrecht Oleo e Gas (OOG) will operate the drilling ships in waters off thecoast of Brazil. Two service agreements, one for each drilling ship, have also been signedwith Petrobras. Service payments from Petrobras to OOG will be made onshore inBrazilian reals, while charter payments from Petrobras will be made to Norbe VIII andNorbe IX offshore in US dollars. The drilling ships are being engineered and built byDaewoo Shipbuilding and Maritime Engineering (DSME) in South Korea underturnkey, fixed-price, date-certain, lumpsum engineering, procuring, and constructioncontracts.A 12-bank strong commercial loan is complemented by the support of two of themost experienced drillship financing ECAs – Norway’s GIEK and Korea’s Kexim. Therobust structure and record of the borrower, ECAs and lead banks led to anoutstandingly successful syndication and an oversubscription at a difficult time for themarkets.The winning financing structure totals $1.344 billion and includes a bank term loanfacility in the amount of $770 million and facilities covered or funded by Kexim andGIEK totalling $574 million (split $300 million and $274 million respectively). Untilthe delivery of the drilling ships by the shipyard, the project will benefit from refundguarantees issued by Kexim. The tenor under the ECA tranches is 2+10 years while it is2+8 years under the commercial loans. The balloon is 30% of the commercial trancheamount, with a cash retention mechanism and DSRA (debt service reserve account)reducing the balloon to 12%.The interest rate is hedged through a market fixed rate, except for the GIEK facilitywith a fixed commercial interest reference rate granted by Norweigen agencyEksportfinans. The financing is structured on a limited recourse basis, with DSCRrelated(debt service coverage ratio) covenants and dividend lock-ups, a cash retentionmechanism, a debt service reserve as well as service reserve account.Security is granted to lenders, ECAs and hedge providers on a pari passu basis. Thesecurity package includes assignment of the EPC, charter and service agreements and ofTRADE FINANCE The Guide to Global Trade Finance Markets 2011 39

DEALS OF THE YEARthe Kexim refund guarantees, pledge of shares, cash support agreement over a portionof the project costs, first priority mortgage cross-collateralised on the assets, pledge overthe accounts and contingent equity standby letter of credit over a portion of the projectcosts.The Norbe deal is significant and wins an award through its original structuring andability to finance two assets based on a secured cross-collateralised basis. Against achallenging background for setting up such a complex and sizeable financing, the dealproves that things can get done with the right corporate in the right market.“It was a great pleasure to see the successful achievement of this structured financing,reflected by the oversubscription experienced at the syndication stage despite difficultmarket conditions. This success was made possible by the market knowledge andexcellent cooperation among Odebrecht and the financial advisers, and the outstandingsupport of the ECAs,” says Cèdric Chatel, associate director structured export finance,at Société Générale.At BNP Paribas export finance Brazil, Règis Maráais says: “This deal is a milestone inthe offshore business in Brazil not only by its size but also because it was executed in themiddle of the last financial turmoil. ECAs participation and proactivity wereinstrumental to achieve this successful closing with a quite innovative structure. Thistransaction has re-opened the Brazilian syndicate loan market and has set a newbenchmark for this industry in terms of structure, volume, tenor and number ofinstitutions (12 banks and 2 ECAs), representing a clear departure from the prevailinglow volume club deal environment with limited number of participating banks”Jae Seung Je at BNPP’s export finance Seoul desk adds: “The Kexim tranche forwhich BNP Paribas was ECA coordinator, is a mix between a guaranteed facility and adirect loan which offers the best of two worlds and provides the borrower with themost competitive cost of fund for the whole eligible amount.” ■40 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEAROvercoming hurdles in Costa RicaICE – ECA- lease receivablesMLA: Bank of China. Lessor: CABEI. Lessee: Instituto Costarricense de Electricidad. Amount: $233 million. ECA:Sinosure. Tenor: 5-years door-to-door. Lawyers: Baker & McKenzie (Hong Kong & New York); Arias & Munoz (CostaRica); Shearman & Sterling. Equipment supplier: Huawei.This deal saw the trade flow between China and Latin America break new ground interms of structure. In a first for the market, Bank of China (BoC) funded a Sinosurebackedlease receivable purchase transaction originated and initially structured by theCentral American Bank for Economic Integration (CABEI).The 3G telecommunications project, for Costa Rica’s electricity and telecom -munications provider Instituto Costarricense de Electricidad’s (ICE), saw China’sHuawei awarded the equipment supplier contract under a joint offer structure in whichthe network provider is responsible for the technical matters and CABEI is responsiblefor the financial part of the contract. Huawei and CABEI won an international biddingprocess by proposing a leasing and purchase option structure to develop the project.Once the leasing contract was in place, BoC came into the picture as funding partyand the receivables purchase structure was further developed with CABEl. The $233million five-year deal that resulted includes Chinese export credit insurer Sinosureproviding 95% insurance cover for political and commercial risks.From Bank of China’s perspective, unlike a conventional lease financing in whichbanks come in before the signing of the agreement and other relative documents, in thiscase these were signed and sealed beforehand and any changes would take a long time.Added complexity came from the non-standard terms of the receivables purchaseagreement.The deal also saw some innovative legal documentation to allow for the fulfilment ofthe project with BoC and CABEI signing several documents establishing therelationship required to proceed with the deal and the funding of the transaction.CABEI remains in the structure as the lessor of the network and with a leasingadministration role.The complexity of the deal was such that seamless cooperation between the variousparties in Beijing, Shenzhen, Hong Kong, New York, Costa Rica and Honduras wasvital. BoC provided key structuring and underwriting support while working closelywith Sinosure and the Chinese authorities. The bank also had to meet CABEI’s strictinternal evaluation procedures for every detail of the structure and legaldocumentation. Expeditious document modification and updating was thereforenecessary to get the deal signed by year-end. There was a tight schedule for the firstdrawdown, as it was only two days after signing the financing.A spokesperson at BoC comments: “Within this transaction, Bank of China came upwith an innovative structure to meet the needs of Huawei, CABEI and ICE. Thetransaction brought CABEI and ICE to the Chinese export finance market for the firsttime and greatly improved ICE’s balance sheet without interfering with CABEI’s.Further, this transaction finances the exporter’s construction and supply of atelecommunication in Costa Rica for ICE while enabling the exporter to liquidatereceivables in the proceeding five years.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 41

DEALS OF THE YEARTrade favoured by Chile’s CodelcoCodelco – pre-export financingMLA: Santander. Borrower: Corporación Nacional del Cobre de Chile. Amount: $400 million. Tenor: 2.5-years.Lawyers: Internal.This Santander-arranged bilateral pre-export financing for Chile’s state copper miningcompany, Corporación Nacional del Cobre de Chile (Codelco), was the largest tradefinance deal to close in the Chilean market in 2009. At $400 million and with a tenorof 2.5 years, the deal was also keenly priced considering the prevailing marketenvironment and metals prices.Codelco is the world’s largest producer of copper, which is Chile’s main exportproduct. Over the next decade, Codelco plans to invest more than $11 billion toexpand its production capacity, including some $2 billion to develop its Gaby depositand expand its Andina and El Teniente mines.The strong client knowledge of Santander’s local team turned out to be a key factorin making this transaction happen, together with the specialised product knowledge ofthe global commodity finance team.Francisco Pimentel, managing director of global transaction banking in Chile atSantander, comments: “This transaction in particular gives a concrete sign of theenormous opportunities that Santander may offer to our customers, based on our solidglobal network and an outstanding know how about structures, clients and markets.”Erik Brommer, head of metals and mining at Santander adds: “The strength of themetal markets will continue to support the Chilean economy, and political riskremains limited. Still trade-backed financing in Chile is favoured by our clients as theyare looking to diversify sources of funding while achieving competitive pricing.” ■42 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSupporting an essential sectorEmbratel – multilateral A/B loanMLAs: BBVA; Calyon; Natixis; Nordea; Santander; Société Générale. Borrower: Empresa Brasileira de TelecomuniÁaıes(Embratel). Multilateral/Arranger: Nordic Investment Bank. Amount: $200 million. Tenor: 5-years. Equipmentsuppliers: various but mainly Nokia Siemens Networks.This successful financing of equipment to Brazil’s Embratel is the first time an A/B loanstructure has been used between the borrower and the Nordic Investment Bank (NIB).The closing of the B-loan was achieved within a very challenging timeframe, just as thebanks had to meet pricing commitments in the middle of a liquidity crisis. MLAs onthe B loan are: BBVA; Crédit Agricole; Natixis; Nordea; Santander and SociétéGénérale (SG).However, the deal was signed because of the national importance of emergingmarket telecommunications companies such as Embratel, and the economic value ofthe telecommunications exports to the Nordic countries. Embratel, a subsidiary ofMexico’s Telmex, is one of the largest telecom operators in Latin America for Nordictelecom equipment manufacturers, and is of strategic relevance in terms of R&D andproduct development.Tarja Kylanpaa, senior director, deputy head of NIB lending in non-membercountries, explains: “Brazil is one of the key non-member countries, andtelecommunications is an essential sector for our operations. Both contribute to fulfillingour mandate of enhancing competitiveness. A combination of multilateral andcommercial bank participation in the A/B loan arrangement will benefit the customer.”Structured as an A/B loan, the MLAs and NIB arranged a five-year $50 milliondirect A-loan from NIB, and a $150 million five-year door-to-door facility provided bythe arrangers. The multilateral agency umbrella provided by NIB was the main reasonfor the success of the deal and the bank acted as a vital alternative source of funds.The facility finances Embratel’s purchase of telecom equipment for the developmentof its wireless broadband and general telecom infrastructure, principally supplied byNokia Siemens Networks.“Nordea is proud to be part of the deal, which witnessed firm commitment in financingtelecom industry also when the market conditions are difficult. Nordea was among the firstlenders, who came up with the credit approval for the deal in the middle of financial crisisin the end of 2008 as we wanted to look over the cycle and invest in transactions, which areimportant for our clients and partners. All of this became possible for us as our deal teamwas fully supported by key decission makers and Nordea’s strategic view on the industry,”says Jussi Haarasilta, vice president, Nordea export and project finance, responsible dealmanager on the Embratel transaction.A spokesperson for SG says: “Despite highly disrupted market conditions and aglobally shrunken credit appetite, the five-year door-to-door facilities wereimplemented by NIB, SG and the arrangers in a very challenging time frame. This wasthanks to SG Brazil’s very close relationship with Embratel as well as SG’s exportfinance experience with NIB financing – SG was one of the first international banks towork under NIB programmes in Brazil and has continuously supported Embratel in itsdevelopment.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 43

DEALS OF THE YEARRelationship is key for Brazil’s PifcoPifco – trade notes facilityMLA: Santander. Borrower: Petrobras Internatonal Finance Company. Amount: $3 billion. Tenor: Up to 6.5-years.Lawyers: Landay & Leblang.Biggest is not always the best, but in this case the overall amount of the transaction – $3billion – provides real weight in a year when liquidity problems were all too prevalent.In this transaction, Santander acting as mandated lead arranger, put together anexport receivables discount programme structured as a trade note facility for PetrobrasInternatonal Finance Company (Pifco) for an overall amount of $3 billion. Under theterms of the deal, oil company Petróleo Brasileiro (Petrobras) acts as the obligor. Pifco isa wholly-owned subsidiary of Petrobras.This package deal marked the largest long-term bilateral trade finance loan in LatinAmerica by a private bank in 2009. The facility was structured during the height of thefinancial crisis and Santander acted as sole arranger and lender of the entire transaction.The facility package included three tranches and was designed to leverage onPetrobras’ strong trade flows. As such there were three separate signings, disbursementsand commercial conditions, but all with similar documentation. The first deal wassigned/disbursed in March 2009, the second one in July and the third in December.The $1.5 billion funds disbursed under the first tranche were used as a bridge to aninternational bond issuance which was successfully placed by Santander s debt andcapital markets division in October 2009. The remaining two tranches – $500 milliondisbursed in July and $1.5 billion disbursed in December – were an essential support toPetrobras’ strategic expenditure plans and working capital requirements related torecently discovered Brazilian oil fields.Santander’s head of commodity finance, Rogier Schulpen, comments: “The strongrelationship with our customer Petrobras, a deep understanding of its business and tradeflows and our good team of local commodity and trade finance specialists allowedBanco Santander to respond quickly to Petrobras’ requirements with this tailor-madetrade notes structure. Under testing market circumstances, the programme wasstructured, documented and disbursed within three months. We were very pleased tohave been able to assist Petrobras and we believe that this transaction is a clear exampleof the value of strong customer/bank relationships. We are very happy to see itrecognised with a Deal of the Year award.” ■44 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEAROvercoming challenges in HondurasJaremar – OPIC risk sharing facilityMLAs: Citi; Banco General. Borrowers: Grupo Jaremar companies – Bufalo Industrial; Industria Aceitera;Oledoproductos de Honduras; Palmas de San Alejo. Agency: OPIC. Amount: $22 million. Tenor: 7-years. Lawyers:Pillsbury Winthrop Shaw Pittman.While the theme of managing to sign a deal under difficult financial circumstances wasendemic in 2009’s Deal of the Year submissions, this deal reminds us that sometimes it ispolitics that proves a challenge. The financing of Grupo Jaremar’s expansion plans wasexecuted despite the Honduran constitutional crisis, which effectively froze offshorelending into the country. A combination of Citi, Banco General, and the OverseasPrivate Investment Corporation (OPIC), made sure that the borrower’s businessescould continue to expand.Despite challenging market conditions, Citi was able to fulfil Grupo Jaremar’srequests by providing a structure that helps the company meet its variety of financingneeds for its investments across several product linesGrupo Jaremar is a top-tier conglomerate in Honduras dedicated to the productionand commercialisation of palm oil, its corresponding by-products, wheat flour, cookiesand candies.The financing funds Jaremar’s expansion of its crude palm oil plantations, theimplementation of biodiesel renewable energy projects, diversification of its finishedproducts and refinancing of existing debt. In addition to the implementation ofbiodiesel projects, the deal also sees the resulting emissions reduction from GrupoJaremar’s investments validated by the Clean Development Mechanism (CDM) whichbenefits the company with carbon credits.The deal is structured with three tranches: tranche A is $15 million and carries anOPIC guarantee; tranche B is $5 million and tranche C is $2 million. The transactionbenefits from corporate guarantees from Jaremar’s 33 regional guarantors, and is securedby a perfected first priority pledge and security interest in certain fixed assets of thecompany generating at least a 125% loan-to-value ratio and irrevocable cross guaranteesfrom all of the companies of the group.Through this structure, Grupo Jaremar will be able to diversify and lengthen itsfunding bases and will realise competitive pricing, lower costs and ease of executionthrough the OPIC-guarantee.“Jaremar has entrusted Citi once again with structuring this financing in order toachieve this group’s medium and long term goals. The bank’s commitment to itscustomers and projects that are socially responsible is reflected in the execution of thisdeal in spite of roadblocks,” comments Alexa Foglia at Citi Honduras.Rupert Smith, VP finance and administration, Grupo Jaremar, adds: “This financingreflects the commitment and continued support of Citibank to the growth of Jaremarthroughout the years. Even in adverse financial environment, Citibank has remained byour side to help us materialise projects that contribute to a cleaner atmosphere.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 45

DEALS OF THE YEARBespoke structure for Costa Rican powerGarabito – ECA-backed financingMLAs: HSBC; KfW IPEX-Bank. Borrower: Instituto Costarricense de Electricidad SPV “Fideicomiso Planta TermicaGarabito”. Amount: $235 million. Tenor: 12-years. Other participants: Banco de Costa Rica (onshore trust bank).ECA: Euler Hermes. Insurance adviser: Jardine Lloyd Thompson. Lawyers: Allen and Overy (UK & NY); LLMR&T (CostaRica). Equipment supplier: MAN Diesel SE.What sets this deal apart is that the banks and ECA created a bespoke financing forCosta Rica’s state-owned power and telecommunications provider, InstitutoCostarricense de Electricidad (ICE), allowing the company to combine local bondplacements with the long-term fixed rate commercial interest reference rate (CIRR)funding loan supported by Euler Hermes. The structure of the deal via special purposetrust with an operating lease, allowed ICE to obtain off-balance sheet financing andprompt execution for this priority project.ICE urgently required the construction of the 200MW Garabito Thermal ElectricPower plant, in order to provide the country with urgent diversification of generationsources. Costa Rica is heavily reliant on hydroelectric generation and has experiencedpower shortages and rationing during dry seasons.In order to provide a quick execution for the commissioning of the power plant, ICErequired an off balance sheet operating lease. This provided an additional challenge tothe financing structure which was being negotiated during the middle of the creditcrisis.HSBC, acting as mandated lead arranger and offshore trust bank, and KfW IPEX-Bank, acting as MLA and funding bank, provided a Euler Hermes CIRR financing forthe EPC contract with MAN Diesel SE, which complemented the local bondplacements provided by Banco de Costa Rica for this special purpose vehicleFideicomiso Planta Termica Garabito. The 12-year deal has semi-annual instalmentswith the last payment scheduled for 2022.This was the largest CIRR rate funded deal provided to a single borrower by theGerman state during 2009, key to the lease structure which required fixed rate fundingto match the fixed lease payments. The financing put in place by HSBC and KfWallowed the special purpose trust to raise funding at lower all-in costs than Costa Ricansovereign pricing, while ensuring the complete financing of the project at a time whenlocal debt markets were very illiquid.Trevor Udell, associate director, project and export finance at HSBC, concludes:“The Garabito Power Project is key to the Costa Rican generation mix, which iscurrently heavily reliant on hydro resulting in a number of power shortages over thepast years. HSBC provided the state-owned sponsor with a bespoke low cost, fixed ratefinancing off-balance sheet solution, allowing them to execute this project in a timelymanor. This transaction was first of its kind for ICE and a landmark transaction inCentral America. The support of the German government with Euler Hermesguarantee and KfW-IPEX long-term fixed rate CIRR funding ensured the success ofthe financing which was negotiated in a challenging time with low liquidity in CostaRican and international markets.” ■46 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARCareer-defining deal with OasisOasis of the Seas – ECA-backed financingMLAs: BNP Paribas; Nordea Bank; SEB. Other participants: Finnish Export Credit (FEC). Borrower: Royal CaribbeanCruise Lines. Amount: $1.05 billion (debt) and $262.5 million (equity). ECA: Finnvera; Finnish Export Credit.Tenor: 12-years. Lawyers: Shearman & Sterling (for banks); Holland & Knight (for Finnvera); Davis Polk & Wardwell(for RCCL).Having signed in early May 2009, the $1.05 billion Finnish export credit facility tofinance Royal Caribbean Cruise Line’s (RCCL) new passenger vessel, Oasis of theSeas demonstrated that big deals could still get done even in the financial climate ofthe time.Commenting at the time of the signing, Brian Rice, executive vice president andchief financial officer with Royal Caribbean, said: “We are very pleased to have securedthe financing for Oasis of the Seas. With the tight credit environment and lack ofliquidity in the financial markets today, this financing is a testimony to the strength ofour company, the terrific partnership we have with Finland, and the outstanding longtermrelationships we enjoy with our banks.”The order for the Oasis of the Seas was made in 2006 when economic conditionswere much more sanguine than was the case in the run-up to delivery. The financingwas important both for RCCL and for the Finnish economy.This deal was the first transaction involving the recently introduced fundingavailability from Finnish Export Credit (FEC) for part of the financing, a verysubstantial corporate loan that would seal the deal on the financing of the world’slargest passenger ship at a time when market conditions were particularly difficult.In early 2009 when RCCL focused on arranging finance for the new vessel the Oasisof the Seas, which was already well advanced in construction, conditions in the financingmarkets were challenging, with the scale of the required financing magnifying these issues.BNP Paribas (BNPP), Nordea and SEB worked closely with Finnvera and FEC toprovide a financing solution. The facility included the application for the first time of FECfunding, to enable the financing to proceed on a basis satisfactory to RCCL andshipbuilder STX Europe Yards (formerly Aker Yards), thus facilitating the largest singlecapital goods export from Finland against the background of an extremely unhelpfulmarket.The Finnish government has already adopted a new and temporary financingscheme enabling FEC, a Finnvera’s subsidiary in charge of the ‘interest-equalisation’programme, to fund export credits to ensure projects’ sustainability when marketconditions are adverse. BNP Paribas, Nordea and SEB additionally provided a counterguarantee to FEC through Finnvera to allow its participation.The unsecured post-delivery financing is structured as an A/B loan. Tranche Atotalled $420 million from FEC, while the $630 million tranche B was split equallybetween the three commercial banks. The deal has a drawing period of six months and arepayment period of 12 years. The financing covers 80% of the contract price of theship. Each of the commercial banks may elect to opt-out after six years.Tim Lamey, head of the Nordic desk at BNPP export finance, recalls: “Financing forthe Oasis of the Seas was sought at a time of almost unparallelled difficulty in globalmarkets. Against a background of particularly limited liquidity and risk appetiteTRADE FINANCE The Guide to Global Trade Finance Markets 2011 47

DEALS OF THE YEARgenerally, RCCL and their bank group of BNP Paribas, Nordea and SEB worked veryclosely with Finnvera to structure and finalise the $1.05 billion 12 year financing for thecruise vessel, which is considered as the largest passenger vessel ever built.“This involved significant direct funding participation from Finnish Export Credit –the first time it had been mobilised in recent years – and a high level of support andflexibility from Finnvera, as well as considerable commitment by the banks to enable thisscale of financing to be completed at a notably difficult time on a basis appropriate fromRCCL’s standpoint. The end result was a facility deemed a success by all parties, tofinance the single largest capital equipment export to have taken place from Finland.”Topi Vesteri, Finnvera’s executive vice president and FEC’s chairman of the board,adds: “The Oasis of the Seas buyer credit financing was closed in a very difficult market.In order to attract a group of banks to join the transaction Finnvera increased its coverpercentage from 80% to 95% and Finnvera’s subsidiary Finnish Export Credit provided40% of the funding for 12 years under Finland’s temporary (2009-2010) export creditfunding scheme which was put in place in record time in the months following thecollapse of Lehman Brothers in the autumn of 2008.”He adds: “For many of us involved this is not just a Deal of the Year. Taking the sheersize of this transaction and the timing of it in the middle of the low point of thefinancial markets and also at the lowest point of the cruise markets in a long time thiswas the ‘Deal of our Careers’. Our excellent co-operation over the years with the banksinvolved and our long-term knowledge of Royal Caribbean was very helpful. Indifficult times such long term relationships are extremely valuable.” ■48 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARA tight structure and nimble legal workTRC Trading Corporation – revolverMLAs: ACB, BAC Florida Bank, CoBank, RZB Finance, Société Générale. Borrower: TRC Trading Corp. Amount: $60million. Tenor: 2-years. Lawyers: Brown & Associates (borrowers); White and Case (credit documentation); Bracewell &Giuliani (spin-off and true sale opinion). Insurers: AIG via Insurance Company of Pennsylvania; Euler Hermes (foraccount receivables).The TRC Trading Corporation revolving credit facility is a landmark transactionthrough its innovative structure and web-based control of collateral – making it standout from other trading company revolvers.Société Générale acted as sole bookrunner, lead arranger and administrative agent onthis $60 million senior secured revolving credit facility for TRC Trading Corporation.ACB, BAC Florida Bank, CoBank, RZB Finance also acted as MLAs. TRC TradingCorporation was created in conjunction with the refinancing through the spin-off ofthe The Rice Company’s commodity trading and freight activities into two separatelegal entities.The facility is governed by a borrowing base and will be used to refinance existingindebtedness and finance the purchase of grain, grain by-products and other agriculturalcommodities. The administrative agent controls original negotiable shipping documentsuntil either full repayment is made from the end buyer or until a trade receivable iscreated. All trade receivables are then closely monitored via web-based systems interfacedwith the company’s accounting systems, which continuously verify that each receivablemeets the eligibility criteria for inclusion in the borrowing base, including aging andvalidity of the corresponding insurance cover endorsement. Credit limits are updatedindependently by the insurance broker. Insurance was provided by AIG via InsuranceCompany of Pennsylvania and Euler Hermes as the insurers of the company’s accountreceivables.Execution was paramount as the company needed to refinance its debt on the sameday as the spin-off. This involved legal work in six countries in parallel (the US, Mexico,Nicaragua, Bahamas, France and Switzerland). The transaction was done in closecooperation with M&A lawyers, so that spin-off documents, legal opinions, and creditand security documentation could be executed on the same day.Thanks to the tight structure, the company was able to bring new banks to thetransaction, and for the first time push the maturity of its credit line to two years insteadof a traditional 364 day revolving credit.“The SG CIB team is delighted to have arranged this financing for TRC Trading.The company’s footprint in the Americas continues to expand strongly. SG CIB hasaccompanied TRC’s growth for a number of years as it has been integrating the ricesupply chain from origination and logistics in North America to processing anddistribution in Central America and Mexico,” says Emmanuel Chesneau, head ofnatural resources finance, North and Central America at Société Générale.■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 49

DEALS OF THE YEARLess exposure and faster paymentsForemost Groups – import financingIssuer: JP Morgan. Client: Foremost Groups. Amount: $57 million.JP Morgan arranged this unique supply chain solution for two valued clients thatreduces concentrated accounts receivable exposure and promotes growth throughlow-cost financing – vitally important in the current economic climate.New Jersey-based Foremost Groups makes indoor and outdoor home fixture productsfor major US department stores. Its plumbing, outdoor furniture and indoor furnituredivisions utilise factories in China and sourcing centres in China and Taiwan. AlthoughForemost’s sales volume to a major discount retailer had grown significantly in recent years,to an annual total of $57 million, the buyer’s primary method of payment continues to bethrough issuance of private label letters of credit in favour of Foremost, which are processedby JP Morgan. The increase in sales volume was creating a situation in which Foremost hada significant concentration of accounts receivable exposure with a single buyer.While discussing the renewal of its JP Morgan loan revolver facility, Foremostmanagement expressed interest in finding a way to reduce their accounts receivableconcentration with this buyer and expedite payment on letters of credit received fromthem.“They had certainly asked the right bank as JP Morgan happens to enjoy a very closetrade services relationship with the retailer, not only issuing and processing theircommercial letters of credit transactions, but managing their letter of credit discountingprogramme for vendors as well,” recalls JP Morgan executive director Jonathan Heuser.JP Morgan’s sophisticated supply chain finance solutions are founded on significantteamwork by trade teams across the bank’s own investment and commercial bankingunits. In this case, the bank’s longstanding relationship as trusted provider to both partiesproved particularly beneficial to Foremost.“We came up with a cost-effective solution in which Foremost could elect earlypayment when presenting documents to JP Morgan under the buyer’s letters of credit.For JP Morgan’s Libor-plus-spread discounting fee, Foremost eliminates a 60-daywaiting term, shortens its days-sales-outstanding, and reduces accounts receivableexposure to a single buyer,” adds JP Morgan vice president and deal team leader BolaAdeeko.This solution provides the kind of low-cost financing that helps the firm grow in aneconomic period when working capital management – for both buyers and their keysuppliers – has never been more important. ■50 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSteering a course for shipping efficiencyINTTRA – electronic invoicing solutionMLA: Deutsche Bank. Client: INTTRA.In April 2009, Deutsche Bank joined forces with INTTRA, the world’s largest multicarriere-Commerce platform for global shipping to provide an electronic invoicepresentment and payment (EIPP) solution to the industry. More than 280,000container orders are initiated on the INTTRA platform each week, representing morethan 10% of global ocean container trade.The ocean freight industry is heavily reliant on complex contracts which makeinvoicing problematic. Inaccuracy arises from complicated accounts payable processesbeing carried out manually.New Jersey-based INTTRA, a leading global provider of e-commerce solutions toocean carriers and their customers, wanted to make this process more efficient for theindustry and establish a global, multi-biller, ocean industry e-invoicing solution.Deutsche Bank launched a partnership with INTTRA to drive new efficiencies andcost savings in the $260 billion ocean container shipping industry.This landmark deal combines the connectivity of INTTRA’s multi-carrier platform,which hosts the largest network of shippers in the world, with Deutsche Bank’s leadingglobal financial supply chain solutions.INTTRA selected Deutsche Bank for its financial supply chain managementexperience, global capabilities and its technology, including eBills – the Bank’s EIPPplatform. INTTRA indicated the Deutsche Bank solution offered a more robustplatform with a lower up-front investment as compared to competing solutions.There are an estimated 150 million invoice transactions processed a year for oceanshipping with average costs ranging from $20 to $60 per invoice depending on theprocesses used. Implementing an electronic solution can cut average transactionprocessing costs by more than half.Carriers also benefit from accelerated collection of their accounts receivable andimproved working capital, making cash available sooner.Shippers and logistics providers profit from having a standardised accounts payable processfor receiving, processing and paying all of their invoices, improving visibility of their cashliabilities and providing a transparent dispute resolution process, all of which create efficienciesand save time for their staff.Availability of information on the platform provides the opportunity for Deutsche Bankto offer additional working capital/financing solutions to carriers and shippers in the future.Additionally, digitisation of the invoices within the ocean freight industry could preserveapproximately 75,000 trees per year, a significant contribution to environmentalconservation.Rick Striano, director and Americas product head of trade and financial supply chainproduct management in Deutsche Bank’s global transaction banking division says of thedeal: “Deutsche Bank is extremely excited about our close collaboration withINTTRA, and the work we have done to revolutionise the way the containerisedfreight industry can deliver and settle invoices electronically. We feel very good aboutthe operational and cost efficiencies our solutions can deliver to an industry that is soimportant to global commerce.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 51

DEALS OF THE YEAROne-stop-shop for European export creditPemex – multisource export creditMLA: HSBC. Borrower: Pemex. Amount: $500 million. ECAs: Atradius DSB; Cesce; Coface; ECGD; EKF; GIEK; Sace andothers. Tenor: Up to 10-years.Mexican oil producer Petroleos Mexicanos (Pemex) has an aggressive programme ofcapital investment typically exceeding $15 billion in any given year, and finances asignificant portion of this total. Export credit is a key part of the mix of financingutilised by Pemex, particularly as the present market climate has adversely effectedpricing on the bond and syndicated bank markets, making ECA financing more costcompetitive.Historically US Ex-Im and the Japanese agencies have provided the largest piece ofPemex’s ECA financing. A facility was needed which gave Pemex easy and rapid accessto European and other smaller ECAs, and the multi-sourced line was created toaddress this. Since signing in October 2009, the initial $500 million limit is alreadyoversubscribed.HSBC, acting as sole arranger, structured a framework under which individualfinancings are provided to Pemex with the support of European ECAs to financePemex’s continuing investment, principally in exploration and production, but alsorefining, gas and petrochemicals as required. Tenors can be up to 10 years from deliveryor commissioning as applicable with repayments made in semi-annual installments.Going for a multisourced option such as this is a proven means of providing highvolumes of export credit financing using guarantees from numerous and diverse ECAsfor often relatively modest individual facility values. Reference to common document -ation means that separate facilities can be documented by a short form facility letterwithin a matter of two to three weeks once ECA underwriting has taken place.Through the transparency achieved by controlling all European (and some other)ECA financing through one facility, it was possible to negotiate in order to agreecommon and optimal terms from all ECAs. HSBC has arranged several forumsbetween ECAs and Pemex to ensure alignment on issues such as premium, availabletenor, level of cover and eligibility treatment.Pre-defined terms under the multisourced line allow Pemex to obtain a blanketapproval from the Hacienda, rather than putting forward individual facilities forapproval as is generally the case.By creating a one-stop shop for European ECA financing for Pemex, themultisourced line allows European companies to compete on level terms with largertrading blocks with a single ECA such as the USA and China.Sam Lippit, director in HSBC’s project and export finance team, recalls: “Themultisourced line was an extremely important deal for Pemex, delivering high volumesof export credit financing utilising numerous and diverse ECAs, for often relativelymodest individual facilities, each of which can be put in place within a couple of weeksof underwriting. As well as achieving efficient delivery however, the transparencycreated by controlling European ECA activity through a single conduit has made itpossible for HSBC to negotiate in order to agree common and optimal terms across allagencies concerned – a cross section of the most active ECAs in Europe.” ■52 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARA unique combinationLi & Fung – AR financing programmeMLA: Citi. Client and seller: LF USA Inc. Performance undertaker: Li & Fung Limited. Purchaser & Borrower: Thirdparty unaffiliated to the seller. Lenders: A club of commercial banks. Amount: $435 million. Tenor: 1-year. Lawyers:Kaye Scholer.Accounts receivables finance programmes are not often seen in Trade Finance’s Deals ofthe Year, but the Citi-arranged structure for LF USA, the US trading arm of the Li &Fung group, consists of a unique ‘never-seen-before’ combination of an accountsreceivable (AR) purchase facility and a secured revolving credit facility.LF USA manages supply chains for major North American brands and retailers. Thecompany sought a receivables financing programme that would create liquidity,maximise off-balance sheet treatment (under Hong Kong GAAP accounting), andminimise financing costs. With no ‘off-the-shelf’ solution available, Citi set out to designa brand new and customised structure to address all of LF USA’s requirements. Theone-year committed $435 million AR finance programme achieved all of thecompany’s objectives and the credit facility was syndicated to a club of the client’srelationship banks.This is the first AR finance programme to achieve partial off balance sheet treatmentfor a US subsidiary of a Hong Kong GAAP-reporting company without using creditinsurance and without lenders taking full insolvency risk on the buyers. In addition thesyndicated facility was structured, syndicated and closed in less than two months.Citi ran parallel structuring and syndication processes to gain acceptance amonginvestors within the ‘start-to-finish’ 45-day closing window meaning that the facilitycould close in December 2009, meeting the client’s year-end reporting objectives.Sebastien Delasnerie, structured trade product manager at Citi North America, says:“This landmark transaction is a great example of how an international corporation andits global banking partner, when combining their expertise, can design a financingsolution that successfully addresses complex, multi-jurisdiction structural challenges.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 53

TOP REGIONAL BORROWERS & LENDERSTop 10 borrowers for Latin America trade finance (includingbilateral) 1 Jan - 29 Nov 2010Deal valuePos. Borrower US$ m No. %Share1 Iridium Communications Inc 1,800 1 6.82 Comision Federal de Electricidad - CFE 1,522 4 5.83 Petroleos de Venezuela SA - PDVSA 1,500 1 5.74 Fibria Celulose SA 1,135 2 4.35 Royal Caribbean Cruises Ltd 1,130 1 4.36 Vale SA 1,000 1 3.87 Votorantim Cimentos Ltda 970 1 3.78 Cronos Group 965 1 3.69 Boeing 865 1 3.310 Minera y Metalurgica del Boleo SA de CV - MMB 858 1 3.2Total 26,477 162 100.0Source: DealogicTop 10 MLAs for Latin American trade finance (includingbilateral) 1 Jan - 29 Nov 2010Deal valuePos. Arranger US$ m No. %Share1 Santander 4,350 31 16.42 BBVA 2,023 75 7.63 BNP Paribas 2,004 16 7.64 SG CIB 1,515 18 5.75 Credit Agricole CIB 1,199 16 4.56 Deutsche Bank 1,128 11 4.37 Citi 1,093 7 4.18 HSBC 965 12 3.69 Mitsubishi UFJ Financial Group 816 6 3.110 Banco Espirito Santo 811 2 3.1Total 26,477 162 100.0Source: Dealogic54 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

EUROPE AND THE CISTrade finance in Eastern Europe and theCIS region – back to business as usual?In 2008/2009 Eastern Europe and the CIS region witnessed the worst financial crisissince the collapse of the centrally-planned economies in the early 1990s. As a directconsequence, most countries experienced a deep recession with GDP figures oftendeclining in double digit percentages. This development also left its mark on the tradefinance business of Eastern Europe and the CIS. After almost a decade of rapid exportand import growth, countries like Russia, Kazakhstan and Ukraine witnessed a declinein their import and export volumes of up to 50 per cent year on year in 2009, ascompared to 2008.In a direct response to the financial crises, consumers in the region started to tightentheir belts and entrepreneurs stopped investing in their businesses, which resulted in asignificant reduction of demand for investment and consumer goods.Nevertheless, as early as the second quarter of 2009, real GDP began to increase incountries like Moldova, Turkey or Kazakhstan. The return to growth was lagged by acouple of quarters in the Baltic countries, where the need to unwind pre-crisisimbalances remained significant. The situation was also difficult in south-easternEurope where countries struggled to emerge from recession.Real GDP continued to contract through much of 2009 and into early 2010 inBulgaria, Croatia and Romania. In addition, domestic events such as political turmoilin the Kyrgyz Republic or the uncertainty surrounding presidential elections inUkraine depressed growth during the first half of 2010 in some countries.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 55

EUROPE AND THE CISInterestingly, the recovery in Eastern Europe and the CIS Region was initially mostlydriven by net exports and, as early as the first quarter of 2010, exports had recoveredfrom their total collapse of the winter months in 2008/2009, in line with the generalrecovery in global trade.Commodity exporting countries like Armenia, Kazakhstan, Mongolia or Russiabenefited from rebounding commodity prices, while countries with a heavy exportconcentration on machinery like the Czech or Slovak Republics, Hungary, Poland and– to a certain extend Romania – benefited from the global cyclical rebound.Furthermore, exports from those countries whose real exchange rated depreciatedduring 2009 increased disproportionately. In most countries in Eastern Europe and theCIS, export growth offset a rebound in imports from their compression during2008/2009. As a result, the contribution of net exports to growth was positive in mostcountries until the first quarter of 2010, leading to lower current account deficits or insome cases even surpluses across the region and easing exchange rate pressures.However, from the second quarter of 2010, import growth began to outpace exportgrowth in some countries, reflecting a steady recovery in domestic demand.The latest indicators point to a gradual recovery of the economies in Eastern Europeand the CIS and subsequently to higher trade finance volumes. It would appear froman outsider’s point of view that we are seeing a return to business as it was before thecrisis.The real picture, however, reflects a more difficult scenario. Apart from the fact thatthere have been lower levels of demand for investment and consumer goods, manylocal banks in Eastern Europe and the CIS region are still suffering from a highpercentage of non-performing loans.As a result, local banks have had to stop lending to local exporters and importers inorder to strengthen their capital base. Many local banks are still heavily engaged withrestructuring non-performing loans and are very cautious in taking on new risks. Bankclients seeking access to trade finance have to undergo stricter credit risk assessmentsthan before, whether they are exporters or importers. Even a good credit rating doesnot guarantee the necessary support for these companies.Although the liquidity crisis has eased and some banks are becoming more liquidagain, there have been only limited signs of granting more credit to companiesengaged in export or import business. Especially for small and medium sizedcompanies with a low credit rating it is increasingly difficult to obtain the support theyneed to conduct their international business.This is particularly the case in less developed countries where local banks are veryrestrictive in their business activity. This is compounded by the fact that many Westerncommercial banks have reduced or completely closed their trade finance limits formany banks in Eastern Europe and the CIS region. This is especially the case inUkraine and Kazakhstan where the banking sector suffered enormously with wellknownbanking defaults.Furthermore, certain vulnerabilities in the global economy remain which, should they56 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

EUROPE AND THE CISmaterialise, would have an impact again on the world trade and significantly on tradefinance volumes in the Eastern Europe and the CIS region. This creates a level ofuncertainty and lack of market confidence which means there is no return to businessas usual yet.In 2011 the recovery in the EBRD region is likely to mirror the “multi-speed”recovery that appears to be underway globally (International Monetary Fund, 2010).Many countries remain heavily dependent on exports to the European Union (EU).EU growth, while stronger than expected in 2010, is likely to slow in 2011 as fiscalausterity packages gather pace and room for further monetary policy easing in theeuro zone appears limited.Lending by eurozone banks is likely to remain sluggish in the face of higher futurecapital adequacy standards and the EU-mandated restructuring of some importantbanks in the region .As a result, a return to strong credit growth financed by capital inflows from eurozonebanks is unlikely. That said, capital inflows may increasingly recover, fed by abundantliquidity resulting from continued monetary easing in several large advancedcountries. This will support credit growth and exert appreciation pressures in countrieswith larger financial markets, leading to a further rebalancing of demand growth fromexternal to domestic sources. ■Reference: EBRD Transition Report 2010Authors:Marco NindlAssociate Bankernindlm@ebrd.comKamola MakhmudovaAssociate Bankermakhmudk@ebrd.comEuropean Bank for Reconstruction and DevelopmentThe EBRD’s Trade Facilitation Programme promotes foreign trade with central and Eastern Europeand the CIS. Amount of financing available under the Bank’s Trade Facilitation Programme is a1.5billion. Through the programme, the EBRD provides guarantees to international confirming banks.In so doing, it takes the political and commercial payment risk of transactions undertaken by issuingbanks in the countries where the EBRD operates. The programme can guarantee any genuine tradetransaction associated with exports from, imports to, and between the EBRD’s countries ofoperations. 115 issuing banks in the Bank’s region of operations participate in the programmetogether with over 700 confirming banks throughout the world.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 57

DEALS OF THE YEARDouble strength factoring solutionANZAG – factoring solutionMLA: Deutsche Bank. Borrower: Andreae-Noris Zahn AG (ANZAG). Factors: Postbank Factoring, Eurofactor. Amount:e130 million. Tenor: revolving factoring facility.This is ground-breaking structure for a German factoring deal that deserves fullrecognition. Deutsche Bank with two leading factoring houses in Postbank Factoringand Eurofactor created an unusual streamlined factoring facility that not only suppliedmuch needed financing to a performing corporate but also had an immediate effect onANZAG’s balance sheet and working capital.Andreae-Noris Zahn AG (ANZAG), a leading German pharmaceutical companyapproached Deutsche Bank to arrange a a130 million revolving factoring facility tohelp diversify its funding base and working capital management.The volume of ANZAG’s factoring programme could not be met by any one singleinvestor or factor, which would have been the norm. Deutsche Bank arranged for twoco-operating factors to pitch for the mandate whilst also accommodating the client’srequest for streamlined administration and handling.The subsequent a factoring facility used two factoring companies: PostbankFactoring and Eurofactor to handle the volume of ANZAG’s programme and offered arisk-conscious client a ‘double-dip’ solution which allows one factor to step in if theother withdraws.The deal is a structure that breaks new ground in the factoring market and is likely tobe repeated given the increasing number of large factoring tickets and the increasingneed for corporates to capture liquidity through their receivables.Albert Traunthaler, director of structured trade and export finance at Deutsche Bankin Frankfurt, comments: “This deal is special since ANZAG wanted a multi-functionalsolution providing them with alternative funding (to bank borrowing), a sustainable100% debtor risk divestment and a “true sale” balance sheet amelioration. The highvolume targeted for this factoring program had to be shouldered by more than oneinvestor.“With Deutsche Bank acting as arranger and refinancing partner, the programme wasfinanced by two, normally competing, institutions (one fronting the other) – this was afirst for the German market. ANZAG was especially pleased to have achieved a majorcontribution to their working capital optimisation with a minimum admin cost and tohave the programme up and running within a short timeframe.” ■58 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSupporting core suppliersJ Sainsbury – accounts receivable purchaseMLA: Royal Bank of Scotland. Borrower: J Sainsbury. Amount: £300 million (2 tranches). Tenor: Revolving 360 dayfacility. Technology provider: PrimeRevenue. Lawyers: White & Case.Supply chain efficiency is vital in today’s economic climate and the solution provided toUK supermarket group J Sainsbury by Royal Bank of Scotland (RBS), meets the needsnot only of the client and its network of suppliers, but represents the largest supplychain finance programme in the UK retail sector to date.Sainsbury’s itself has been a leader in this field, having launched its Trading FinanceProgramme in 2007. This was a retail industry first demonstrating the company’scommitment to supporting the financing needs of its core suppliers. Since launch, over£500 million of invoices have been traded on the Trading Finance Platform. However,in 2008 the original funding provider decided to exit the business and consequently,Sainsbury’s global supply chain was put at significant risk.RBS won the mandate in a highly competitive bidding process and arranged anaccounts receivable purchase supply chain finance solution that provides liquidity for upto 300 Sainsbury suppliers, both domestic and overseas, in two tranches of £250 million(June 2009) and £50 million (November 2009). Importantly, it meets the workingcapital goals of both the suppliers – enabling them to get paid more quickly bydiscounting their invoices to RBS – and Sainsbury’s, allowing the company to protectits cash with a payment cycle that reflects its normal terms of business. RBS isultimately taking direct credit risk on Sainsbury’s with no performance risk on thesuppliers.RBS was successful in winning this deal based on its ability to provide a reliable sourceof funding within a very short timeframe – just eight weeks. Part of the implementationinvolved working with a third-party supply chain finance technology platform providedby PrimeRevenue as well as integrating the payment process through RBS’s AccessDirect channel to ensure a seamless customer experience.RBS’s flexibility in terms of willingness to work with a third-party IT solution wasanother key influencing factor in the success of the deal, allowing both Sainsbury’s andits suppliers to integrate the programme seamlessly into their existing front and backoffice systems, with minimal disruption to their business processes.For Sainsbury’s, the benefits are reduced liquidity risk, enhanced commercialrelationships with key suppliers, and its payment processes and working capital positionare unaffected by the existence and operation of the Trading Finance Platform.Sainsbury’s suppliers get a reliable source of competitively priced, off-balance sheetfunding, which is effectively on-demand; improved visibility and control over cash flow;an improved balance sheet position; online monitoring of the payment process; and thefunding is on a non-recourse basis to the supplier, so the risk of customer non-paymentpasses to RBS from the date of sale.Darren Shapland, chief financial officer of Sainsbury’s, comments: “We are delightedthat RBS, a key relationship bank, has agreed to provide funding for the programme. Webelieve RBS’ participation offers considerable scope to grow the programme andfurther improve liquidity throughout our supply chain.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 59

DEALS OF THE YEARKexim backing leads Doosan into EuropeDoosan-Skoda – ECA-backed financingMLAs: BNP Paribas; Citi; Standard Chartered Bank. Borrower: Doosan Heavy Industries European Holdings. Amount:e90 million (export credit) + e110 million Kexim direct funding (total $268 million). ECAs: Export-Import Bank ofKorea (Kexim). Tenor: 5-years + 1-year disbursement. Lawyers: Clifford Chance HK; Bae, Kim & Lee – for lenders;Kim & Chang – for borrowers. Purpose: Financing the acquisition of Skoda Power by Doosan.This deal is a unique acquisition-export financing arranged by mandated lead arrangers(MLAs) BNP Paribas (BNPP), Citi and Standard Chartered Bank, which financed theacquisition of the Czech Republic’s Skoda Power by Doosan Heavy Industry &Construction (DHIC) of South Korea, through its Luxembourg-based European holdingcompany Doosan Heavy Industries European Holdings, for an overall a452 million.The transaction received strong support from Korea Export-Import Bank (Kexim), theKorean export credit agency (ECA), and is a classic example of how important industrialbuy-outs can take place even in the toughest of market conditions providing there arecommitted and experienced parties leading the deal. This cross-border M&A, ECAcovereddeal, which was highly complex and one of the first of its kind involving Keximcoveredand Kexim-funded facilities, also shows the forward looking nature of Kexim.The financing package put together combines a a90 million export credit trancheprovided equally by the three MLAs and backed by Kexim. In a separate B tranche, Keximis providing a direct loan of a110 million. There is a 100% comprehensive Keximguarantee on the export credit tranch. Within the transaction Standard Chartered acted asfinancial adviser, coordinating bank and MLA, with BNPP and Citi acting as MLAs.Christopher Scrivener, vice president in export finance corporate and sovereigngroup at BNPP says: “This acquisition export finance transaction relies on a veryinnovative structure, combining the strengths of a Kexim cover with the soundcorporate position of Doosan Heavy and the profitable rationale of the acquisition,which allowed us to finance the equity injected in the acquisition scheme.”It is important to note that both facilities are fully guaranteed by mother companyDoosan Heavy plus by Doosan Babcock. The Kexim-covered and Kexim-fundedfacilities will be repaid by Doosan Heavy Europe. The financing was signed on 24November 2009, and closing/disbursement took place on 30 November.Further financing for the overall project is made up through equity from Doosancompanies. In an innovative way, the direct Kexim loan enables a very favourable debtto equity ratio for the overall financing.Doosan anticipates that the acquisition will substantially bolster its market position inthe turbine industry. The acquisition will complete Doosan’s existing line-up of powerplant products – heat generators (boilers) from Doosan Babcock, steam turbines fromSkoda and power generators from DHIC.“In Doosan Heavy’s ambition to become the world leader in power and water, SkodaPower was a unique and highly attractive opportunity to secure the entire boiler-turbinegeneratorvalue chain,” says Tae Gyun Kim, director in export finance Seoul for BNPP.Adds Charles Lataillade, vice president in structured export finance at BNPP: “Thefinance parties managed to match the tight schedule of the acquisition, and throughgreat and intense effort were successful in closing this landmark structured andchallenging transaction in only two months.” ■60 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARBanks find innovative track for TurkcellTurkcell – ECA-backed financingMLAs: Crédit Agricole; Nordea. Borrower: Turkcell, Turkey, and Financell BV. Amount: $360 million. ECAs: EKN; ABSEK. Tenor: 5-years and 7-years. Equipment supplier: Ericsson.Bundling your requirements and using special purpose vehicles (SPV) to facilitatefinancings is complex enough, but when it involves telecom equipment exports fromSweden’s Ericsson going to end-buyers in both Turkey and in Ukraine, the deal takesanother dimension. In this transaction for Turkish telecoms operator, Turkcell, mandatedlead arrangers (MLAs) Crédit Agricole and Nordea certainly had their wits about them tocome up with this winning formula.Mid-2009 saw the MLAs acting on two financings for Turkcell worth an overall $360million. The first transaction is composed of a $285 million buyer credit, financingimports of 2G and 3G equipment for Turkcell in Turkey.The second component is a $75 million buyer credit financing imports of 2Gequipment for Turkcell’s Ukrainian subsidiary, Astelit. The structure used for theUkraine leg was particularly innovative, with Financell as borrower, a Dutch SPV 100%owned by Turkcell, and Turkcell as guarantor. The transaction is particularly importantfor Ukraine, as direct funding into the market, given the economic conditions, at thattime was impossible.Both buyer credits are 95% covered by the Swedish Export Guarantee Board, EKN,and are 100% funded by Swedish Export Credit (SEK). Crédit Agricole acted as facilityagent and global coordinator. The financing was signed in July 2009.Commenting on the deal, Marie Vetland, vice-president, Nordea export and projectfinance, responsible deal manager at Nordea, says: “We are very pleased to haveconcluded this transaction in order to support our valued customers Turkcell andEricsson. It was a satisfying experience to work with all the parties involved and asalways, the key to success was excellent cooperation and some patience. Theextraordinary efforts from Turkcell and Ericsson in providing all the necessary anddetailed information was invaluable.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 61

DEALS OF THE YEARCollaborating for greener powerCengiz Enerji – ECA-backed financingMLA: JP Morgan. Borrower: Cengiz Enerji Sanayi ve Ticaret. Advisor: GE Capital Market Services. Guarantor: CengizInsaat Sanayi ve Ticaret. ECAs: US Ex-Im; EKF. Amount: $105 million. Tenor: 13-years. Equipment suppliers: GE Energyand Aalborg.This deal represents a world first in the combined cycle installation of GE LMS100green gas turbine generators. Financed in Turkey by JP Morgan and US Ex-Im on acorporate finance basis with additional coverage from Denmark’s EKF, and theparticipation of GE Capital Markets Services, the deal highlights the need for thecollaboration in today’s export finance market.The Cengiz Group, established in 1969 as a construction company, has sinceexpanded into other operations that include tourism, mining, metallurgy, infrastructure,and energy. This year, Cengiz Enerji, a subsidiary, sought financing for its 240MWcombined cycle natural gas-fired power plant in Samsun, on Turkey’s northern coast.The installation will mark the first use of GE’s LMS100 gas turbine generators in thecountry. In addition, the Cengiz project will be the world’s first installation of LMS100generators in combined cycle mode. The GE turbines are a greener technology – themost efficient gas turbine in simple cycle operation, with a significant operatingflexibility derived from aircraft engine design.GE Capital Markets Services, which had worked with JP Morgan on several energyfinancings in the region, once again joined with JP Morgan and US Ex-Im to structurea deal that provided 12-year guaranteed financing for a project that would quicklyproduce energy in rapidly developing Turkey. This was Cengiz Enerji’s first financingwith US Ex-Im and was achieved on a corporate finance basis.Some of the project equipment was to be sourced from Denmark, Japan and Korea. Inorder to provide Cengiz with a streamlined one-stop-shop approach to the financing, itwas necessary to organize the transaction on a co-financing basis and meet the technicalchallenges that accompany the execution of a co-financed deal. Since GE Energy, USAwas the pre-eminent supplier, US Ex-Im acted as the lead ECA. EKF of Denmarkagreed to cover the Danish, Korean and Japanese portions and provide Ex-Im with therequisite reinsurance. Finally, in order to complete the project successfully it wasnecessary to finance certain local Turkish costs, which US Ex-Im and EKF also agreed tocover.JP Morgan’s strong liquidity position, fortress balance sheet and US Ex-Improgramme execution skills made for a successfully completed transaction in a yearwhen liquidity issues threatened similar deals. “We are very pleased to have helpedenable greener and more efficient energy production in Turkey, and to have been ableto step up and support the continued implementation of a long planned project duringa time of financial turmoil,” says JP Morgan deal team leader Margo Gill. ■62 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARArranging the whole supply chainGazprom Germania- supply chain solutionMLA: Deutsche Bank. Borrower: Gazprom Germania GmbH. Amount: e700 million facility ($936 million). Tenor: Untilfurther notice.Deutsche Bank wins this award for a comprehensive trade and treasury facility theyarranged for Gazprom Germania.Gazprom Germania – one of the biggest distributors of natural gas and LNG inGermany and Western Europe and a subsidiary of Russia’s Gazprom – needed a flexiblefinancing structure covering a range of trade finance and cash management products inorder to better manage Gazprom’s treasury-related needs across Europe. The need arosefrom Gazprom’s expansion plans in Europe.Deutsche Bank met Gazprom Germania’s requirements for a comprehensive andflexible transaction banking solution by structuring a multi-purpose/multi-productfacility worth a700 million ($936 million). Deutsche Bank, acting as lender and issuingbank, signed a comprehensive transaction banking facility for the treasury department ofGazprom Germania which includes letters of credit and guarantees as well as FX, cashmanagement and cash pooling.The mandate covers all legal entities of Gazprom in Italy, UK, Switzerland, Austriaand Germany. These legal entities will shift their respective trade flows and openaccounts to Deutsche Bank in Berlin so Deutsche Bank can provide a streamlined,transparent and coordinated approach to managing the LCs, guarantees and cashmanagement elements.Deutsche Bank provided the client with a single documentation and administrationpackage covering every single trade and cash component of the deal. This included useof state-of-the-art DB online platforms ‘db-direct internet’ and ‘autobahn ® Treasury’(for FX business).Werner Steinmueller, head of global transaction banking at Deutsche Bank, says:“Deutsche Bank arranged a multi-purpose transaction banking facility packagecovering the company’s entire needs in letters of credit and guarantees, FX as well ascash management. This tailor-made solution is based on a one-stop documentation andadministration as well as the use of state-of-the-art online platforms such asautobahn ® Treasury. Deutsche Bank’s integrated transaction banking services allow thecompany and its entities to streamline and flexibly manage their expanding trade, FXand cash operations in Germany and across Western Europe.”Deutsche Bank’s deal stands out in that it offered a complete trade solution whichcombined the efficiency of a treasury solution while also providing a flexible structure. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 63

DEALS OF THE YEARStrong appetite for Turkish steel assetsMMK Atakas – ECA-backed financingMLAs: BNP Paribas, Garanti Bankasi, Is Bankasi, The Royal Bank of Scotland. Borrower: MMK Atakas. Amount: e384million export credit, $450 million commercial, $60 million working capital facility. ECA: Sace. Tenor: 10-years. Legalcounsel: Clifford Chance Europe; Pekin & Pekin; Norton Rose; Herguner Bilgen Ozeke.“What distinguishes the deal from many other plant financings is the financialengineering; a hybrid cash flow-based project finance type structure with full recourseto the corporate sponsors, with the bank club and Italian export credit agency Sacetaking on an element of merchant risk in the volatile steel sector over a ten-year tenor,”comments George Grozavu, vice-president structured export finance at BNP Paribas.The MMK Atakas deal is in itself a major achievement given the lending climate atthe time and represents a crucial step forward for the Turkish flat steel making industryand related sectors.In February 2008, BNP Paribas together with The Royal Bank of Scotland, IsBankasi and Garanti Bankasi won the mandate to arrange the financing for theconstruction of MMK Atakas integrated flat steel making complex and relatedinfrastructure facilities in Turkey.The project value is approximately $1.7 billion, and financed under a debt to equityratio of 63:37.The financing consists of a a384 million ($538 million) Sace-covered export creditfacility, arranged by BNP Paribas (50%) and The Royal Bank of Scotland (50%), and a$450 million commercial facility arranged by Garanti Bankası (62%) and Is Bankasi(38%).Both facilities have a 10-year tenor with a first repayment due 15 July 2011 and finaldischarge date 15 July 2019. The Sace-covered loan has a grace period of one and a halfyears while the commercial facility has a two-year grace period.On top of this there is a $60 million working capital revolver arranged and providedequally by Türkiye Garanti Bankası and Türkiye Is Bankası for the financing of othercapital expenditures and project costs. The balance is through sponsors’ equity ofapproximately $464 million.In a statement, MMK says: “The arrangers worked through the financial crisis and,together with Sace, managed to close the financing which enjoys a solid securitypackage.”Clifford Chance Europe and Pekin & Pekin acted as the finance parties’ legal adviserswhilst Norton Rose and Hergüner Bilgen Özeke provided legal support to MMKAtakas and the sponsors.“The successful closing of this large steel structured finance transaction demonstratesthat there is an important appetite for quality Turkish assets and considerable faith in theferrous sector,” says Marco d’Alessandro, BNP Paribas’ managing director, corporate andsovereign/export finance transaction group.The MMK Atakas financing is a benchmark transaction; securing major well-pricedloans at a time of a lack of liquidity with a spike in debt pricing and a frozen debt market,combined with structural innovation and project rationale is a significant achievementmaking this a key transaction of 2009. ■64 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARRussian telecoms gets a Swedish injectionMTS – ECA-backed financingMLAs: Crédit Agricole; ING; Nordea Bank; RZB. Borrower: Mobile Telesystems (MTS). Amount: $1.074 billion – buyercredit. Tenor: 11-years. ECAs: EKN, AB SEK. DFIs: EBRD, NIB. Lawyers: Clifford Chance in London/Moscow, and Vingein Stockholm (for banks). Equipment exporter: Ericsson.This transaction is one of the largest ever arranged for a Russian mobile telephoneoperator – in this case Mobile Telesystems (MTS), the largest mobile operator in theRussia/CIS region. The $1.074 billion buyer’s credit supported by the Swedish exportcredit guarantee agency, EKN, and the Swedish Export Credit Corporation, AB SEK,was also the largest ever Swedish export credit facility for a Russian company. Signed on17 November, 2009, the facility is a highly important element to the financingrequirements for MTS through 2009 and is being used for the purchase of equipmentfrom Sweden’s Ericsson for the development of MTS’ mobile networks.The original mandated lead arrangers (MLAs) on the deal were Crédit Agricole,ING, Nordea, with Raiffeisen Zentralbank Österreich (RZB) coming in as an MLA.Crédit Agricole is global coordinator and documentation agent. ING is facility agentand SEK agent. Nordea is EKN agent. The buyer’s credit is for $1.074 billion, withCrédit Agricole, ING, and Nordea having takes of $308 million and RZB $150 million.The EKN-supported export credit facility with 95% comprehensive cover isrefinanced at SEK and covers three years of telecom equipment deliveries fromEricsson with an 8.5 year repayment period. The facility is split into two tranches, withfinal maturity in June 2019 and September 2020.There is also a B-loan tranche attached to the deal with Nordic Investment Bank(NIB) coming in with a40 million and EBRD with a103 million.Commenting on the cooperative nature of deal structuring, Katarina Hirsch, vicepresident,telecom coordinator Sweden, Nordea export and project finance, says: “Thismega transaction defied the financial downturn at the beginning of 2009 and reallyshowed that great cooperation can bear fruit even in the most challenging of times.Without the constructive and dedicated cooperation between the MLAs, borrower,multilaterals, vendor (Ericsson) and the governmental support provided through EKNand SEK this transaction would never have come to a closing. The MLAs’ capacity toabsorb very sizeable EBRD and NIB B-loan commitments in addition to the $1.074billion EKN-supported export credit facility was essential for the success of thetransaction.”At RZB, Elisabeth Sutter-Becska, head of global export finance adds: “In achallenging environment we managed to present a custom-made financing solution tothe borrower. The award consequently reflects the professional spirit of all partiesinvolved.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 65

DEALS OF THE YEARThe return of the Russian oil majorsLukoil – pre-export financingMLAs: Barclays Capital, BTMU, BNPP, Calyon, Deutsche Bank, CGML, ING Bank, Natixis, OrgresBank, RBS, SociétéGénérale and WestLB. Borrower: Lukoil. Amount: $1.2 billion. Tenor: 3-years. Lawyers: Lovells; Akin Gump StraussHauer & Feld.This deal marks Russian oil producer Lukoil’s return to pre-export finance for the firsttime since 2003, after years of reliance on unsecured bank debt and the Eurobondmarket. The deal was a landmark transaction that demonstrated a return of appetite forRussian risk in the international markets and attracted a core group of Lukoil lenders ina club deal which raised $1.2 billion. This was one of very few commodity syndicationsdone in Russia during 2009 and showed just how resilient the pre-export financing(PXF) product remains.Ilia Poliakov, MD and deputy head of the Russia and CIS department within thenatural resources and energy financing group at Société Générale, comments: “Lukoildemonstrated its ability to tap the medium-term debt market for a substantial amounton a club-deal basis in the peak of the liquidity crisis. Lukoil benefitted from strongsupport from a pool of top tier international banks due to the company’s strong creditprofile, its diversified business model, a pricing adapted to the context and a tightsecurity package. It would have in fact been possible to increase the facility amount, butLukoil preferred to limit the amount of the transaction to the initial amount. Thistransaction is one of the largest ones on the Russian debt market in 2009.”The deal was arranged as a standard Russian PXF structure. Lukoil exported crudeoil to its trading company Litasco in Switzerland who then transported it to the finalofftakers. Lenders were assigned rights over the export and offtake contracts withproceeds flowing into a account handled by the facility agent in favour of the lenders.The structure was further enhanced by the pledge of off-shore and domesticcollection accounts held with the agent bank (Deutsche Bank) and its subsidiary inRussia.Despite difficult markets conditions, Lukoil was able to continue its investmentprogramme (though somewhat reduced) as a result of this transaction which, togetherwith the $1.5 billion Eurobond, provided all the necessary liquidity for 2009. Fewcompanies in 2009, especially in Russia, could make this boast but Lukoil is one ofthem as a result of this deal.Dean Grech, RBS’ head of structured commodity finance CIS explains: “Althoughan infrequent issuer in the structured debt market, Lukoil’s foray into this marketallowed them to tap a significant amount of liquidity at good pricing and tenor whenthe unsecured debt market in Russia had basically closed for all but a few names, or wasprohibitively expensive. This transaction clearly demonstrated how RBS was able toprovide beneficial structured solutions for a top corporate in Russia, in terms ofliquidity, tenor and pricing.” ■66 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARAzerbaijan goes greenIBA Mitaki – ECA-backed financingMLAs: Landesbank Berlin, Société Générale. Borrower: The International Bank of Azerbaijan (IBA). Amount: e128million. ECA: Euler Hermes. Tenor: 15-years for buyer credits. 1.5-years for tied commercial loans. Legal counsel:Salans, Baku. Exporter: MITAKI Project, Hamburg.The IBA Mitaki deal constitutes the largest of its kind for Azerbaijan, for Euler Hermesin the country, and creates the first ever green energy project in the entire Caspianregion that serves as a benchmark for other similar projects being discussed in the CISregion.Also known as the Yeni Yashma I Wind Park, the project will be based on theAbsherom peninsula near Baku, Azerbaijan. The financing was divided into twoidentical parts allowing two separate but in every respect identical and jointly structuredfinancings by Landesbank Berlin (LBB) and Société Générale (SG).The total deal amount was a128 million comprised of Euler Hermes-covered buyercredits amounting to a112 million with a tenor of 15 years, and tied commercial loansamounting to a15.6 million with a tenor of 1.5 years.“We are particularly proud to have been able to finance the first ever wind park inAzerbaijan, which is the first green energy deal in the region – and in fact, even for theCIS – despite the extremely challenging economic environment,” comments SabineGustmann, director of export finance, Germany, Austria and Switzerland, SociétéGénérale.“I would like to thank Euler Hermes for their excellent and successful cooperation,demonstrating not only their willingness, but also their ability to support this landmarkproject in all its aspects.”Stefan Untergutsch, director, export finance at LBB in Berlin, comments: “Thissubstantial (100%) financing was structured by joint efforts and tremendous support byEuler Hermes at the height of the economic crisis and even constitutes the largest dealof its kind for Azerbaijan and for Euler Hermes in this country.”The exporting company is Mitaki Project GmbH, based in Hamburg. Baku-basedimporters each handling 50% of the project volume are Caspian Management for the LBBarranged exports and Aztorq MMC, for the SG arranged equipmentAzerbaijan, despite being an oil-producing country and as such enjoying a favourableresource-base for energy production, nevertheless plans to develop ecological forms ofenergy production by harnessing natural resources. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 67

DEALS OF THE YEARKEIC drives with care for Hyundai MotorHyundai Motor – ECA-backed financingMLAs: ING; Société Générale; Natixis; LBBW. Borrower: Hyundai Motor Manufacturing Rus. Amount: e180 million.Tenor: 7-years – door-to-door. ECAs: Korea Export Insurance Corp (KEIC). Corporates: Hyundai Motor Company,Hyundai Motor Manufacturing Rus.Funding developments in the automotive sector in the emerging markets through 2009was not for the feint hearted. But in this transaction ING, Natixis and Société Générale,backed by the Korea Export Insurance Corporation (KEIC), came together to arrangefinancing for Hyundai Motor Company’s investment for a Russian car plant. Theresultant financing was the first KEIC-covered transaction for Hyundai Motor’soverseas investment.The a180 million eventually arranged by the banks was for the borrower, HyundaiMotor Manufacturing Rus (HMMR) to be used for the construction of their Russiancar plant. The seven-year facility was backed by 100% parent guarantee by HyundaiMotor Company and 100% untied overseas business insurance cover by KEIC.Nothing is ever simple and this deal required considerble reslience by the initialMLAs. While Hyundai Motor internally decided to seek KEIC-covered financing fortheir HMMR plant as early as in February 2009, they released the RfP to theirrelationship banks only in April 2009, taking into account the unfavourable overalllending market conditions combined with concerns about the automotive industry andthe negative economic outlook on the Eastern European countries.ING initially responded to the RfP in late April, but it took several months beyondthat developing the club and a the formal working mandate was not awarded untilAugust 2009 after long negotiations in finalising key financing terms and conditions.During this time another bank that had been on board dropped out because of failureto get credit approval, and was replaced by LBBW. ING was appointed KEIC andfacility agent.Eric de Jonge, managing director, global head structured export finance, at ING,states: “We are very pleased to see that our excellent relationship with KEIC, stemmingfrom inception of their activities as ECA, has again resulted in a major role for INGstructured export finance Seoul in this transaction for our important customerHyundai. Since ING was already involved in the first transactions under the overseasuntied programme of KEIC, we managed to smoothly and successfully deal with thisnice opportunity to expand our business with both KEIC and Hyundai.”Eugene Kim, at Société Générale (SG) export finance, comments: “Hyundai Motorsought various ways to fund this strategic investment in Russia, which is an importantmilestone for the company’s ambitious expansion in Eastern Europe. Under thedisrupted market conditions – financial crisis in 2008 and industrial crisis in auto sector –Hyundai Motor for the first time decided to utilise ECA financing for the project ratherthan its usual bond issuance or syndicated bank loan. SG, together with the other MLAsand club lenders, implemented a a180 million credit facility under 100% KEIC coverthrough overseas business credit insurance within a very challenging time schedule,despite a globally shrunken credit appetite towards the car industry.” ■68 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARDirect route through CDB for MegaFonMegaFon – export credit financingMLA: China Development Bank. Borrower: MegaFon. Amount: $300 million. Tenor: 7-years – door-to-door. Lawyers:White & Case. Equipment exporter: Huawei Technologies.What is particularly unusual about this $300 million financing for MegaFon, the thirdlargest mobile telecoms operator in Russia, is that the export buyer’s credit facility wasdone without any export credit agency involvement. This is the largest direct dealprovided to a Russian telecoms operator without any ECA coverage or collateralsupport.China Development bank (CDB) acted as sole arranger and lender. The fundssupport equipment purchases from China’s Huawei Technologies and the furtherdevelopment of the MegaFon GSM and 3G network. Even given that CDB acts as aChina policy bank supporting strategic export and investment interests, in the light ofthe global economic climate at the time, the funding – a direct unsecured export buyer’scredit facility – is still quite remarkable. The loan agreement was signed on 3 June, 2009.There is a two year availability period and a five year repayment period on the loan.Sergey Smykov at Huawei Technolgies (Russia) comments: “The deal is outstandingbecause CDB increased its direct exposure to the customer at the height of the creditcrunch, and MegaFon, being highly cash positive anyway, preferred to sign up for thedeal.”MegaFon also points out that the deal was one of the most expeditiously andefficiently executed transaction it had been involved in, at a time when most financinginstitutions were having severe difficulties in completing transactions. It can also be seenas a major step in the efforts of Chinese banks to develop Russian business.There is also the possibility to further upsize the facility amount at the companyrequest. In addition, any delivery from Huawei Russia is also covered by the facility.A spokesperson for MegaFon tells Trade Finance: “Our CDB $300 million loan wasdone in the midst of global financial and liquidity crisis when the financial and creditmarkets were closed to Russian credits. It was done when comparable Russian creditdefault swaps skyrocketed to over 1000 basis points. No Russian corporates could getwell-priced loans or sell bonds. Even Russian government-owned Vneshtorgbank(VTB) Eurobond traded at over 15%. But working quietly and efficiently with CDB,we managed to close a 7-year $300 million credit facility, for Huawei purchases, withinan accelerated pace of a 2-3 week time frame at the rate of Libor + 270 basis pointswith arrangement fees of a very reasonable 50 basis points. CDB was very reasonable,and very commercially minded.“Given the incredible pricing done at the height of the crisis, the speed and efficientmanner it was done, and the financial institution involved, this is a landmark transactionfor Russia.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 69

DEALS OF THE YEARAn ECA umbrella for Russian steelNLMK – ECA-backed financingMLA: Bayerische Landesbank, Deutsche Bank, ING Bank, Société Générale. Borrower: Novolipetsk Steel (NLMK).Amount: e524.1 million ($702 million). Tenor: 10-years. Lawyers: Lovells as lenders’s advisor and Norton Rose for theborrower. ECAs: Euler Hermes, OeKB, ODL, ONDD. Exporters: Siemens VAI Metals Technologies, Sundwig, SMSMevac,SMS Siemag, LOI Thermprocess, Heinrich Georg, Paul Wurth, Cockerill Maintenance & Ingénierie.This is a good example of just how creative export financing can be under the rightconditions. The four mandated lead arrangers; Bayerische Landesbank, Deutsche Bank,ING, Société Générale (SG) arranged the first ever multi-ECA backed financing donefor Russian steel producer Novolipetsk Steel (NLMK). This was a particularlyambitious financing which pooled 19 different contracts with seven different exportersusing four different export credit agencies. The deal was also the largest everLuxembourg export credit agency ODL-covered Russian corporate deal.NLMK had already started to execute a large modernisation project with contractsconcluded with its key suppliers back in 2006 and 2007. With the onset of the crisisNLMK decided to leverage the general ECA eligibility of the contracts and use this tooptimise its debt structure and cash position as well as diversify its funding source.The banks led the four different ECAs (Hermes, OeKB, ODL, ONDD) to refinancethe contacts that NLMK had already paid at the same terms as if the financing had beenincurred from the beginning. All four ECAs agreed to offer harmonized terms on thefacility and NLMK was left with a particularly robust financing structure which offeredit a diversified funding source, optimised debt profile and improved cash position at adifficult time in the steel market.Udo Bergholz, from Deutsche Bank’s structured trade and export finance team inFrankfurt, comments: “NLMK took the right decision to monetise its import contracts,secure additional liquidity and diversify funding, all at a reasonable cost. The idea was tobundle 18 ECA eligible import contracts under one roof. NLMK achieved two of themajor targets of any client in the current environment of a financial crisis: Reducingrefinancing risk and building up additional liquidity cushions.”The financing was an elegant solution for an extremely strong borrower and showsthe flexibility that export credit financing can offer corporates. NLMK generatedimmediate cash of a374 million as a reimbursement for payments made in the past anda secured additional credit of a150 million.Agnès Tauty, director – Europe & CIS countries at SG says: “This deal is a realachievement for all participants! The club was set up at the height of the credit crunchin Russia, while the metal sector was going through a rough time. This challenge wasovercome thanks to our close and trusting relationship with NLMK, the strong supportof all the ECAs involved, the ability of SG to arrange a deal of this type, and the highquality of the club of MLAs involved who actively participated to this success. Postcrisis, I consider that ECA financing remains a very relevant financing solution for topmajor Russian corporates such as NLMK as it provides reliable sources of financing,long-term financing, competitive pricing and diversification of risk distribution.” ■70 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARPioneers structure real deal for VyborgVyborg – structured trade financingMLAs: Texel Capital, VTB Bank (France). Borrower: Vyborg Ltd (Jersey). Amount: e30 million ($40 million). Tenor: 3-years. Offtaker: Ekman & Co AB (Sweden). Seller/producer: Vyborgskaja Celluloze, Russia. Equipment supplier:Andritz (Austria).Coming up with smart solutions to meet the requirements of the client is the job ofthe arrangers in any transaction. But when those requirements are multi-faceted andspread through several jurisdictions it usually requires some very special attention fromhighly experienced advisers and arrangers. Such was the case with this a30 million($40 million) credit facility arranged to facilitate Austrian-produced equipmentexports to Russian wood pellet producer Vyborgskaja Celluloze.This deal involves Russian risk, equipment exports to Russia, a three-year a30million pre-export financing for a start up wood pellet biofuel producer – which willbe 100% bigger than any other wood pellet producer in the world, and a Swedish pulptrader as offtaker. It was a very tough and interesting deal to get done in a year like2009.Within this deal, arrangers Texel Capital and VTB Bank (France) came up with asuccessful financing solution for a new borrower in difficult market conditions in lateDecember 2009 – the facility was executed on 30 December with the first drawdowntaking place on 31 December.The object of the facility is to enable Vyborgskaja Limited, Jersey (Vyborg) topurchase wood pellet production lines from Austrian equipment manufacturer Andritz.The equipment is to be installed with Vyborgskaja in Russia. Repayment of the loancomes through the export of wood pellets to Swedish pulp trader Ekman, over a periodup to 36 months, including a six months grace period. Under the terms of theagreement, the borrower may request the extension of the facility 24 months after thefirst drawdown for a further 24 months.William Shaw at Texel Capital, states: “In a year when banks were struggling withfinancing any new deals at all, the arrangers were able to structure a large facility tofinance a new borrower in the international banking markets, for a start up project, in avital new commodity with no terminal market, located in a region where most Westernbanks had withdrawn support. Wood pellets are a sustainable, ecological, carbon neutral,biofuel used as partial replacement to coal in power plants.”In an interesting postscript to the deal, it is understood that VTB decided not tosyndicate the deal afterwards, but to keep the whole debt themselves, as their internalcredit committee was very happy with it. This was only decided after the deal closed.Since then the bank has been approached by other pellet producers impressed with thedeal. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 71

DEALS OF THE YEARRosneft takes the ECA route with RBSRosneft – ECA-backed financingMLA: The Royal Bank of Scotland. Borrower: Rosneft. Amount: SK861.7 million ($120 million). ECAs: EKN; AB SEK.Tenor: 10-years. Lawyers: Herbert Smith, Moscow; Advokatfirman Törngren Magnell, Stockholm.We have seen the Russian oil producer Rosneft in the distant past as a borrower withpre-export finance (PXF) structures. But this Deal of the Year award is for an ECAbackedstructured deal – and as such is very much a rarity for the company. In additionit provided Rosneft with the right practical solution at a critical time.In this deal, the Royal Bank of Scotland (RBS) acting as sole mandated leadarranger, structured a SK861.7 million ($120 million) ECA-backed Swedish buyercredit for the funding of imports from Sweden for the modernisation of the Tuapserefinery. The project is one of the most critical for Rosneft at the moment as thecompany continues to focus on Russian asset developmentSigned in November 2009, the financing is being provided in two tranches. Thefacility has a tenor of 10-years including disbursement period. The deal is backed bythe Swedish Export Credit Guarantee Board (EKN) and the Swedish Export CreditCorporation (SEK).This ECA-backed deal is even more remarkable given the fact that the company hasreceived $15 billion in funding from the Chinese for 20 years at an average cost of a set5%. Since mid-2008, Rosneft has not done any typical PXF funded deals in themarket. To target the company’s required pricing level, ECA has become one of theonly sources of financing that presently remains of interest to the company. Given thelong tenor and low pricing, this is an excellent way for the company to finance itsequipment purchases for the modernisation of refinery processes.RBS says it was able to position itself early in the selection process and throughfocused bidding and pitching was able to win the Swedish deal. In addition, from anexecution perspective, the deal was closed within a very short time frame consideringhow long it typically takes to get both the master credit agreement (MCA) and theaddendum signed. The MCA was executed within two months from thecommencement of negotiations in July 2009, while the addendum form was finalisedin October, 2009. RBS says it is the only bank so far to sign a MCA with Rosneft, aframework document that outlines all of the terms and conditions for the deals thatthe bank could be entering into with Rosneft over the next few years.The overall deal achieved superior results for the company – not only did theybenefit from low pricing and long tenors, they were able to benefit from the timelysubmission in the summer of 2009, before ECA premiums went up due to Russia’srisk downgrade, resulting in a significant increase in premiums. The company also usedcommercial interest reference rate (CIRR) options, which fixed the rate for the next12 years at a very low level, allowing them to minimise their interest expense. As such,Rosneft achieved attractive fixed rate funding for a total door-to-door tenor of morethan 10 years.At RBS in Stockholm, Lena Bertilsson, Nordic head of secured debt markets, notes:“We are very proud to have been awarded this mandate to support Rosneft with theirfinancing needs and are pleased it closed within such a short time frame.” ■72 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARBanks hold fast in MosenergoMosenergo – ECA-backed financingMLAs: Crédit Agricole, NordLB. Borrower: Mosenergo. Amount: e415 million ($555 million). ECA: Euler Hermes.Tenor: 16-years. Eqpt exporter: Siemens AG. Legal counsel: Lovells.The Mosenergo deal represents a significant amount of financing provided in difficultcircumstances, but it is not this alone that has qualified it for a Deal of the Year Award.What makes this stand out from the crowd is that originally four banks had agreed toequally fund the project, and when two pulled out due to the financial crisis, thoseremaining stuck to their guns and pulled it through to a successful conclusion. The dealwas also Mosenergo’s debut in the ECA financing market.Calyon, (now Crédit Agricole Corporate and Investment Bank – CA-CIB)Nordlandesbank (NordLB) and two other banks were mandated to arrange thefinancing for four power plants owned by Mosenergo, the main power supplier in theMoscow region, Russia.Each of the power plant projects will involve the construction of a 420MW CCGTunit at existing power plant locations in Moscow. Siemens will supply the gas and steamturbines and generators.Even with the two other banks pulling out of the deal due to the pressures of thecredit crunch, the framework agreement was signed with CA-CIB providing roughlytwo thirds of the a415 million financing, and NordLB the remaining third.German export credit agency Euler Hermes covered the financing for theequipment to be supplied by Siemens AG, Germany, and two separate commercial loanshave been signed to date for the first two power plants with CA-CIB together withNordLB acting as lenders, CA-CIB as facility agent, with a maturity of up to 16 years.Adam Rogatko, Siemens Financial Services, project and export finance, comments:“In a challenging environment, it was possible to close the Euler Hermes-coveredfinancing with two very supportive banking partners, Credit Agricole CIB andNordLB. This facilitated very much the conclusion of the important supply contractsfor Siemens Energy in the Russian market.”“The Hermes financing was Mosenergo’s very successful debut in the ECA market,structured during the high point of the financial crisis, and underlined the banks’commitment to assist the supplier and the buyer with favourable terms,” says Imad Urf,head of export finance, Crédit Agricole CA-CIB Germany.“To my mind what makes this deal really significant is that Crédit Agricole CIB andNordLB, unperturbed of the financial market crisis and the withdrawal of the two otherbanks, have brought successfully a new important Russian name in the ECA marketwith significantly increased underwriting.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 73

DEALS OF THE YEARTatneft timed to perfectionTatneft – pre-export financingCoordinating MLAs: UniCredit; WestLB. Other MLAs: Akbank; Bank of Moscow; BNP Paribas; Gazprombank; Helaba;ING; Orgresbank; RBS; Société Générale; Vitol; VTB. Borrower: Tatneft. Amount: $1.5 billion. Tenor/margin: twotranches – 3-years (5.85%) & 5-years (6.85%). Lawyers: Allen & Overy (for lenders); Cleary Gottlieb Steen &Hamilton (for borrower). Financial advisers: Bank Zenit and Citibank. Offtaker: Vitol.Coordinating mandated lead arrangers (CMLAs) UniCredit and WestLB brought thisdeal together for the Tatarstan oil and gas producing company Tatneft, despite the severeprevailing economic conditions last year, and set a benchmark arranging an exceptionaltransaction. The deal arranged turned out to be the largest pre-export financing (PXF)of 2009 in Russia with substantial oversubscription. It was also the only PXF with afive-year tranche, substantial support from Russian banks, and the only fully syndicatedPXF for a CIS borrower.Acting as CMLAs and bookrunners, UniCredit and WestLB led a group ofinternational banks in the record $1.5 billion syndicated PXF facility for Tatneft. RBSand Gazprombank also joined as MLAs and bookrunners. Citi and Bank Zenit acted asfinancial advisers to Tatneft.Other institutions involved in the transaction and acting as MLAs were: Bank ofMoscow, BNP Paribas, ING, VTB Western Europe, Helaba, Orgresbank (Nordea);Société Générale, Vitol and Akbank. Lead arrangers were: FBN Bank (UK), KfWIPEX-Bank. Arrangers were: Erste Group Bank, London branch, and ZAO BancaIntesa. Lead managers were: Russian Commercial Bank, FIMBank, StichingPensioenfonds and Zorg en Welzijn.Due mainly to the strong security structure and attractive pricing of the deal, as wellas the excellent timing of the syndication – general syndication being launched inAugust – the facility received overwhelming interest from banks leading to a total of$1.9 billion being raised in general syndication. The $1.5 billion facility eventually takenis split between a three-year and a five-year tranche. The three year tranche is priced atLibor plus 5.85% per annum, and the five-year tranche is priced at Libor plus 6.85% perannum.Speaking to Trade Finance magazine about the challenges faced structuring this deal,Alexander Thiel, executive director, commodity finance, corporates and structuredfinance, at WestLB, says: “The challenge was to structure the transaction, in spite of sucha difficult market environment, so that we could get as close to the target facilityamount with a deal that would be attractive to both the banks and the company. In theinitial few months as markets got worse, we had to adjust the structure and the pricingto keep the targets set by the company achievable. Ultimately, the significant time taken,the close cooperation between the company and the bookrunners, and the hard workby all parties paid off.”And at UniCredit in Munich, Christoph Fischer, head of oil and gas, project andcommodity finance at the bank, explains some of the unique facets of the deal. He tellsTrade Finance magazine: “Tatneft was able to attract banks to take five-year risk despitechallenging market conditions underpinning its financial strength, its very successfultrack record in raising financing and a robust and market proven PXF-structure.”Thomas Oehl, global head of corporates and structured finance, within commodity74 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARfinance at WestLB, comments: “This transaction is a testament of WestLB’s highlysustainable and client focused approach for its core commodity finance customerswhich together with its structuring expertise and the highly professionally Tatneftmanagement allowed us to place this successful and record breaking transaction in closepartnership with its partner banks in the market, despite very challenging and tightmarket conditions which we experienced in the course of the financial crisis.Noteworthy is that we not only achieved a significant oversubscription, but also thatthis is the first significant participation of Russian banks, even up to MLA level in thisthoroughly structured PXF transaction – which is evidence of the growing importanceof domestic banks in the Russian commodity finance space.”From the corporate perspective, Peter Gloushkov, head of international legal atTatneft tells Trade Finance: “First of all, I think it is important to note that we startedstructuring the transaction in the midst of the crisis – in November 2008. By the end ofJanuary 2009 when we had meetings with potential lenders in London, the situationbecame even less clear and promising which to certain extent resulted in change of thedeal structure to the one we have now.”He adds: “Therefore, the initial support that came from WestLB and UniCredit andlater from RBS was invaluable since getting the first banks into the deal at that marketwas the key element for its success. It is also important to mention that Vitol, theofftaker on the deal, not only committed to the deal with a significant take (whichprovided for material comfort among banks) but used its banking relationships to getbanks involved in the deal. One other key element of the transaction that made itunique and innovative was the early involvement of purely Russian banks at a seniorlevel. Gazprombank came in with a very large ticket, so did Bank of Moscow. This alsoplayed a significant role in getting ‘critical mass’ for the transaction and persuading otherbanks to get in. By August – September we realised that the market sentiment hadshifted and that we are gaining the required amount. The general syndication resulted insignificant oversubscription but it was the early commitment of the initial MLAs thatcounted the most.“I would also like to underpin WestLB’s performance of its role as documentationagent which was always very responsive and thorough. I believe that they, together withUniCredit as the agent and the security agent, and A&O as lenders counsel made anexcellent team for the lenders’ syndicate. We are also grateful to the financial advisers onthe transaction and legal advisers on both sides for assistance in making this dealhappen.”Gloushkov concludes: “As to the importance of this deal- Tatneft is constructing ahuge greenfield refining and petrochemical complex in Nizhnekamsk (Taneco), thelargest of its kind in Russia since the collapse of Soviet Union, the value of just the firstphase of which is slightly short of $5 billion. Getting this loan in time was a key elementin securing our assurance that we can finance the construction of Taneco under theagreed schedule of construction irrespective of the market.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 75

DEALS OF THE YEARCreative use of receivablesN-Trans – factoring facilityMLAs: VTB Bank (Deutschland), VTB Bank (Austria). Borrower: Transportation Investments Holding Limited(Limassol, Cyprus). Amount: $50 million. Tenor: 1.5-years (with an extension option up to 1-year). Lawyers: GideLoyrette Nouel. Guarantors: Farwater and Petrolesport.This is a distinctive deal that used an innovative approach to the financing of thetransport sector. The deal was also the first cross-border financing of the Russiantransport sector in 2009 and was signed in April at an especially difficult time in themarket.VTB arranged a commodity finance-type receivables assignment structure forTransportation Investments Holding Limited, the parent company of N-Trans, thelargest private freight rail transportation group operating in Russia.The deal refinanced the firm’s existing debt as well as providing necessary capital tofund an expansion to the N-Trans Group’s business.The deal used an assignment of receivables from both the Russian port operatingcompanies – Farwater and Petrolesport – of receivables under the services contractswith the commercial customers of the ports. Most of the underlying contracts weregoverned by Russian law which required the introduction of a specific securityassignment structure in order to comply with Russian law.Under the deal Petrolesport created a collection account with Bank VTB North-Westthrough which all proceeds from the port services contracts had to be channelled. Inaddition the deal also enjoyed a pledge of 17.8% of shares in Globaltrans, a public CypriotbasedRussian transportation holding.The deal pioneered the use of commodity finance-type structure with assignment ofreceivables in the transport sector and was a creative financing structure in an extremelydifficult time.Dietmar Kolck, senior relationship manager at VTB Bank (Deutschland), comments:“For us it was an excellent opportunity to support N-Trans in implementing itsexpansion strategy. This financing was arranged in a very turbulent economicenvironment and, although the company has a good credit rating and history, we had tostructure it as a secured deal.“We used a classical PXF structure, where our bank has considerable experience, fora non-exporting entity and backed the facility by domestic receivables channeledthrough VTB Bank North-West. This structure gives N-Trans the flexibility it needs tocarry out its day-to-day operations and at the same time ensures an appropriate level ofprotection for the lenders.” ■76 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARBig fillip for Russian steelVyksa – ECA-backed financingMLAs: Commerzbank, Bayerische Landesbank, BNP Paribas, Landesbank Baden-Württemberg, Landesbank Hessen-Thürigen Girozentrale, Société Générale, WestLB. Borrower: Vyksa Steel Works. Amount: e347 million ($464 million).ECA: Euler Hermes. Tenor: 13-years. Eqpt exporter: SMS Siemag. Legal counsel: For the borrower: Allen & Overy. Forthe lenders: Lovells, Lovells CIS.This transaction is the biggest Euler Hermes-covered deal for Russia and the largestexport credit transaction for a Russian corporate in 2009. This important deal supportstwo of the top names in the steel industry; steel production equipment and plantcompany SMS Siemag in Germany and steel producer Vyksa Steel Works (VSW), partof OMK United Metallurgical Company in Russia.Commerzbank was mandated by VSW, to advise on and arrange the debt financing forthe Plate Mill 5000 investment that will allow VSW to become a fully integrated pipeproducer. Commerzbank succeeded in a reshaping of the debt package and offered tothe market a well structured and balanced transaction resulting in a 50% oversubscriptionand successful closing of the financing in October 2009.The a347 million German ECA Euler Hermes-covered facility arranged byCommerzbank has a tenor of 13 years with a grace period of three years and arepayment of 20 semi-annual instalments. The facility provides financing for 85% of theSMS Siemag contract, 100% of the interest during construction and 100% of Hermescosts.The financing represents a 2009 landmark deal in the Russian pipe and metals sectorand was a crucial factor in ultimately securing the timely performance of this importantexport transaction for both SMS Siemag and VSW.At Commerzbank, Ralph Lerch, managing director and head of structured export finance,remarks: “The Plate Mill 5000 financing for VSW, being part of the renowned OMK group, isyet again the largest Euler Hermes-covered deal for a Russian corporate since the peak of theglobal financial crisis and we are tempted to say that it marks a turning point to normalizationof the finance environment for Russia and the metals sector.”Despite the prevailing liquidity constrains in the banking market when only verylimited underwriting capacity was available, the placement of the financing package forthis deal was achieved in circumstances where many similar projects in size had beencalled off or had been postponed.The transaction was offered only to relationship banks of VSW and SMS Siemag. Itbenefited strongly from a well founded information package including independentconsultant reports provided by Metal Consulting International and WS AtkinsInternational and a financial model outlining VSW’s robust and sustainable businessmodel. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 77

DEALS OF THE YEARThe full metal jacketFerrexpo – pre-export financingCoordinating MLA: Deutsche Bank. Additional MLAs: BNP Paribas, Fortis Bank Nederland, Natixis, WestLB. Borrower:Ferrexpo. Amount: $230 million. Tenor: 3-years. Lawyers: Denton Wilde Sapte.This was an extremely successful financing that defied market conditions. DeutscheBank and the group of MLAs did the near-impossible and achieved an oversubscriptionfor a Ukrainian metals pre-export financing last year.This was a sophisticated financing that was led by a team with an in-depthunderstanding the market. It is no accident that this was first CIS metal transaction sincethe global financial crisis began in September 2008. Due to its sound structure the dealattracted most of the international commodity finance banks.Ferrexpo operates an integrated iron ore mining, concentrating and pelletisingfacility in central Ukraine. The company holds the largest iron ore resources in Ukraineand is the fourth largest iron ore producer and the largest iron ore exporter in thecountry. In 2007 the firm became the first Ukrainian company to list on the LSE’s mainmarket.Ferrexpo had an previous pre-export finance facility which signed in 2007 andneeded a refinancing before 2010.The global downturn had a dramatic effect on the steel sector, where Ferrexpo’smain customer base lies, resulting in lower demand and a fall in prices. Despite thisvolatility, Ferrexpo managed to maintain positive margins by virtue of its low cost ofproduction, its proximity to its traditional customers and the flexibility of shipping toChina.Deutsche Bank, BNP Paribas, Fortis Bank Nederland, Natixis and WestLB arranged a‘full metal jacket’ pre-export finance facility which contained a robust security packageincluding first ranking assignments of rights under the export and sales contracts. Thefirm’s marketing arm, Ferrexpo AG and the finance vehicle, Ferrexpo UK, were jointborrowers, while the mining division of the company and the London listed holdingcompany each provided a guarantee. Margin on the loan was set at 700 basis points overLibor with the debt self-liquidating in 24 equal monthly installments after a 12 monthgrace period.Deutsche’s managing director and global head of SCTF, John MacNamara,comments: “What has been good about the Ferrexpo deal is that banks have been ableto distinguish between apples and pears. If you are looking at a country in crisis youdon’t then lend to an institution that is fully exposed to the local economy. You insteadlend to someone who is an exporter, who has local currency costs and hard currencyrevenue.“That dynamic is very much the root of the success of the PXF model in that part ofthe world. On top of that you want shareholders who have a certain depth to theirpockets, like Ferrexpo, who will get through compliance and who have a goodmanagement team and excellent integration on their supply side.” ■78 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARKazakh grains go greenKEA – DFI-backed PXFMLA: RBS. Borrower: KazExportAstyk (KEA). Amount: $90 million. Tenor: 2-year pre-export finance facility and a 1-year borrowing base facility. ECA/DFI: EBRD. Lawyers: White & Case; Allen & Overy.This deal is noteworthy, not least because it has attracted multilateral support through atraditional commodity trade finance structure, but also for the fact that it signed in onethe world’s toughest geographies of 2009.In August RBS, along with the European Bank for Reconstruction and Development(EBRD), signed a $90 million pre-export and borrowing base facility for northernKazakh grain and oil crops producer and trader KazExport Astyk (KEA).RBS showed clear leadership in supporting a well-structured Kazakh transactionafter the long shadows cast earlier in the year by two controversial bank defaults forboth BTA Bank and Alliance. The deal is also a rare example of multilateralparticipation in a working capital facility.KEA provides its farms with a mixture of pre-harvest financing, modern agriculturalequipment on finance leases and agronomy advice, in return for payment in grain atharvest time.RBS combined financing will support KEA’s continued operations but will alsoassist KEA’s plans to modernise grain farming in Kazakhstan by introducing sustainablefarming techniques like advanced crop rotation and no-till technology.This deal comprises of a pre-export component that can be used against downpayments on agricultural machinery and a one-year working capital borrowing basefacility that will be used against the company’s pre-harvest financing packages to itspartner farms.The working capital component allows the company to draw funds against aborrowing base comprised of commodity receipts, receivables from offtake contracts andland collateral. The base was designed to be as flexible as possible at the start of the seasonin quarter one of each year, but the repayment in Q2 and Q3 is assured by a partial cleanupschedule that follows the company’s natural working capital cycle.RBS attracted EBRD investment by encouraging the company to implement anenvironmental and social action plan on its assets and land under operation, drawn upby the EBRD, which further boosts its environmental sustainability, even in a tightcredit environment.Interestingly the deal represents EBRD’s first direct exposure to a Kazakh agriholding,after having contributed to the creation of grain trading legislation in the late1990s.Commenting on the deal Jonathan Joseph-Horne, senior director, head ofmonetisation, commodity finance at RBS comments: “KEA is an important andvalued client for RBS Kazakhstan and we were delighted to support KEA in 2009with an extended grain financing facility that also introduced a new high calibrelender EBRD, especially against the backdrop of the challenging global financialconditions.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 79

TOP REGIONAL BORROWERS & LENDERSTop 10 borrowers for European trade finance (including bilateral)1 Jan - 29 Nov 2010Deal valuePos. Borrower US$ m No. %Share1 Vnesheconombank 3,745 3 7.02 Tatneft 3,500 2 6.53 Nord Stream AG 2,868 1 5.34 Akbank 2,512 2 4.75 Yapi ve Kredi Bankasi AS 2,266 2 4.26 BP Caspian 2,250 1 4.27 Isbank 2,068 2 3.98 Mechel 2,000 1 3.79 Gazprom-Neft OAO 1,927 2 3.610 ED&F Man Treasury Management plc 1,663 3 3.1Total 53,700 212 100.0Source: DealogicTop 10 MLAs for European trade finance (including bilateral)1 Jan - 29 Nov 2010Deal valuePos. Arranger US$ m No. %Share1 BNP Paribas 4,243 52 7.92 Credit Agricole CIB 3,405 36 6.33 SG CIB 3,074 34 5.74 ING 2,828 32 5.35 RBS 2,692 25 5.06 Citi 2,480 27 4.67 UniCredit Group 2,444 23 4.68 Deutsche Bank 2,391 32 4.59 Nordea Bank AB 2,069 12 3.910 WestLB 1,987 18 3.7Total 53,700 212 100.0Source: Dealogic80 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

MIDDLE EAST & NORTH AFRICACiti in the Middle East and North AfricaAs the countries of the Middle East and North Africa emerge from the global financialcrisis Citi is well positioned to meet the diverse needs of the region.The view from the GulfFaraz Haider, Head of Trade for the Middle East and Pakistan, at Citi in DubaiThe Gulf Cooperation Council nations – Saudi Arabia, the United Arab Emirates,Bahrain, Qatar, Oman and Kuwait – have for some time been making moves todiversify their economies away from a dependence on oil and gas revenues. This hasnow become a more concerted effort, particularly in Saudi Arabia and the UAE. As aresult we are seeing huge investment in infrastructure with petro dollars being investednot just in supporting the petrochemical and hydrocarbon industry, but also in roads,railways, airports and utilities to encourage inward investment in the region.Never before has the Middle East region seen this level of investment. There is anestimated project pipeline of some $500 billion underway which presents hugepotential opportunities. The ten-year forecast spend within the GCC alone ispredicted to be $1.5 trillion, with a significant proportion likely to be structured aspublic-private partnerships to secure the necessary financing.Some projects of note include the Saudi Aramco Arabiyah Hasbah & ShaybahTRADE FINANCE The Guide to Global Trade Finance Markets 2011 81

MIDDLE EAST & NORTH AFRICADevelopment Programmes which amount to $10 billion plus; the New Doha Portbeing built by the Qatari government, estimated at some $1.6 billion; and the UAEbasedADNOC Shah Gas Development, totaling some $2 billion, as well as the intra-GCC rail network project across the GCC countries.These large projects have changed the nature of trade finance in the Gulf, as longerterms and more structured solutions are required in addition to traditional tradefinance and open account solutions. The export credit agencies (ECAs) have beenmore active than ever as they seek to both increase the long-term flows of goods to theregion from their manufacturers,and work with infrastructureproject counterparties on theselarge one-off transactions. CapitalNever before has the Middle Eastregion seen this level ofinvestment. There is an estimatedproject pipeline of some$500 billion underway whichpresents huge potentialopportunities.equipment, aircraft, shipping andutilities-related goods are all inhigh demand, and now ECAs havestepped up programmes for shorttermcredit insurance and supplychain finance related products aswell.The Dubai debt crisis is still fresh inpeople’s minds, but it should havean overall positive effect in the longterm. Dubai’s ability to raise capitalto refinance its debts signaled areturn of confidence, but thelonger lasting effect will be a move towards greater transparency and caution –hopefully some lessons have been learned.Citi is directly represented in several markets in the Middle East including the UAE,Egypt, Jordan, Lebanon, Qatar, Bahrain and Kuwait. Trade finance and trade servicesare an important part of Citi’s offering globally. As well as providing traditional LC anddocumentary collection services, the bank offers a variety of risk mitigation andfinance solutions suitable for companies trading on open account. It also works withECAs and private credit insurers around the world to facilitate exports. Citi‘s TradeUniversity, a monthly series of web-based seminars, provide clients with informationon trade trends, documentation, finance and regulatory compliance.Most importantly for the Gulf region, Citi is able to leverage its market-leadingnetwork spanning the globe, as well as its award-winning technology platforms, tosupport its clients’ international trade flows end to end. Given the shift in global tradeflows towards increased South-South trade, it is vital for corporates and financialinstitutions alike to have a partner able to serve them on a global basis. ■82 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

MIDDLE EAST & NORTH AFRICACountry profile: AlgeriaBoutheina Beznine, Head of Global Transaction Services, at Citi in AlgiersIn an effort to attract foreign investment, the Algerian government has implemented anumber of reforms, leading to a more stable macro-economic framework and financialsystem. The banking environment has steadily opened to national and foreign privatecapital and the introduction of universal banks has gone hand-in-hand with an overhaulof outdated banking methods. Citi was the first foreign bank to be established in Algeria,opening for business in 1998.Algeria is dependent on the oil and hydrocarbon sector, and in 2010 the country isbenefiting from high oil prices. However, the government has lowered its forecasts forgrowth due to weaker gas demand from Europe and other major partners. GDP growthwill average 4.5% to 5% over the next five years.Algeria boasts high foreign currency reserves estimated at over $150 billion in 2010 orfour years of import cover, and foreign debt has been reduced to less than $2 billion witha debt service ratio of less than 5%. Further, parliament has just approved a $286 billionfive-year investment programme which will help to improve infrastructure, with aspecial focus on developing the non-hydrocarbons sectors and expanding spending onskills development and small and medium sized enterprises.However, since 2009 the government has taken increasingly restrictive measures toprotect its national economic interests. These include a limit of 49% on foreignownership, a tougher tax regime, and other policies to reduce the amount of importscoming into the country. These measures are essentially aimed at promoting localproduction and import substitution in an attempt to diversify the economy.At the beginning of August 2009, the Algerian government released a ‘ComplementaryFinance Law 2009’, which imposed the requirement of letters of credit on all imports ofgoods into the country with a value exceeding $1,000. This created a large backlog andsignificantly added to the process time of importing goods into Algeria.Citi Algeria acted swiftly to improve LC processing for our customers and was able toreduce the turnaround time significantly. In the process, Citi developed customizedofferings through its online banking platform. Citi also introduced trade loans to serviceclients’ short-term cash flows and trade needs. Proactively scheduled training sessions,personalized workshops, and web-based conferences (both in English and in French)help clients become familiar with these offerings.Additionally, Citi Algeria’s trade services include a range of trade finance productsincluding Trade Advisor, Citi’s free online inquiry tool which allows our clients and theirbusiness partners to access summary information online using a transaction referencenumber. Also, CitiDirect Online Banking is the primary platform utilised by clients tomanage both local and global cash management products and services, providing a directwindow into Citi’s global platform for cross-border payments. Citi Algeria has a uniqueSWIFT address and supports a very wide variety of swift messages. ■For more on Citi in Algeria see ‘LC boom in Algeria’ in the April 2010 edition of Trade Finance.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 83

MIDDLE EAST & NORTH AFRICANorth Africa shows resilienceErmias Mengistu, Head of Trade for Morocco, Tunisia and Libya, at Citi in CasablancaDespite close historic ties with the faltering economies of the euro zone, the NorthAfrican countries, Morocco, Tunisia and Libya, are faring a lot better than expected.Exports, tourism and remittance flows, while dependent on Europe, are just part of thestory. Growth rates have remained between 4% and 5% and this strength comes from anumber of factors.Similar to the GCC countries, there are large investments being made in energy, roads,railways, dams and telecoms infrastructure, led by the respective national governments.This is leading European companies to invest more, particularly in the Maghrebcountries. Morocco, for example, isplanning the largest solar powerproject in a single country with theintention of providing some 38% ofSimilar to the GCC countries,there are large investments beingmade in energy, roads, railways,dams and telecoms infrastructure,led by the respective nationalgovernments.the country’s electricity and saving$500-700 million per year in oilimports. The government haspledged some $9 billion in publicand private funds for the project.In addition to the stimulusprovided by infrastructureinvestment, there is relatively strongdomestic demand as each countryhas a large young population withincreasing spending power. Thisdemographic advantage iscountering a drop in demand from Europe, though the European influence is a drivingforce in keeping the banking market particularly liquid, especially in Morocco whichhas the largest tourism and remittance inflows. Moves towards privatization in somesectors have also kept these economies afloat. Oil producers Libya and Algeria havebeen able to rely on steady revenue from that sector.Trade flows are shifting as well and South-South trade is becoming increasinglyimportant for North Africa, led by Morocco and Tunisia. As with many other regionsthere is a marked increase in trade with other robust emerging markets such as Turkey,Brazil, India, and China. Morocco has even seen China replace the US as its thirdlargest source of imports.Increased commercial activity with China in particular is reflected elsewhere in theworld, and Africa is now the source of some 30% of China’s oil imports. China is agame changer in the region as its rapacious demand for commodities has pushed prices84 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

MIDDLE EAST & NORTH AFRICAup, to the benefit of those countries that export them. In addition, the provision of lowcost loans, debt forgiveness and the elimination of tariffs on African exports to Chinahave been most beneficial across the continent.The direct effect of China on North Africa is evident, but the real bonus is the indirecteffect of China’s investment in Sub-Saharan Africa. As such, while North Africaneconomies have traditionally looked across the Mediterranean to Europe, they areincreasingly looking south to Sub-Saharan Africa for new exportmarkets and investments inbanking, energy, telecoms andindustry. Just as there is talk of aJust as there is talk of a newSilk Road across Asia, it seemsthat the historic trade routesbetween northern and southernAfrica via Timbuktu may also bemaking a comeback.new Silk Road across Asia, it seemsthat the historic trade routesbetween northern and southernAfrica via Timbuktu may also bemaking a comeback.China’s demand for raw materialshas largely shielded Africa from theworst of the recession and this hascombined with a generalimprovement in politicalgovernance, the rolling out ofmicrofinance and mobile banking, and an improved regulatory landscape to makecountries in the North see much potential when they look South.Challenges remain as some countries are still unstable, there is widespread preferencefor cash payments, and infrastructure is still largely insufficient.Through its proprietary network and partnerships with those institutions with theright local presence in the right countries, Citi is able to offer efficiencies throughtechnology, and a distribution network of 3,000 points throughout the continent tohelp businesses take advantage of this developing trade flow. ■©2011 Citibank, N.A. All rights reserved. Citi and Arc Design is a trademark and service mark of Citigroup Inc., used and registeredthroughout the world.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 85

DEALS OF THE YEARImpressive performance for Egypt’s EGPCEGPC – pre-export financingInitial MLAs: BTMU and Morgan Stanley. Additional MLAs: Banco Espirito Santo, Banque du Caire, BNP Paribas, CréditAgricole, Commercial International Bank, Deutsche Bank, HSBC, Natixis, Société Générale and WestLB. Borrower:Petroleum Export Limited III (PEL III). Amount: $900 million. Tenor: 3.5-years. Lawyers: Skadden Arps; Helmy, Hamza& Partners for the borrower and Latham & Watkins, DLA Matouk Bassiouny for the lenders.This was an impressive deal that relied on the expertise and partnership of The Bank ofTokyo Mitsubishi (BTMU) and Morgan Stanley to adapt a secured bond structure intoa highly sought after commodity financing that performed strongly in the bankingmarket.The deal was one of the few pre-export finance transactions of any significant sizeclosed in 2009 and wins an award for creating an innovative solution that proved asyndications success.Egyptian General Petroleum Corproation (EGPC) approached Morgan Stanley lastyear asking the bank to arrange a new long-term financing similar to the 2005 MorganStanley-led PEL capital markets offering. However, given market conditions and inorder to get the best terms for EGPC, Morgan Stanley decided to adapt the securedbond structure to a pre-export financing structure.86 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARAs joint-venture partners, bringing BTMU to the transaction was a natural step andtogether the banks made sure that the deal structure met all the requirements of thestructured commodity finance market. In just two months, the banks managed tostructure a highly-sought after financing with syndication achieving a $500 millionoversubscription.The deal was also unique in this market in employing Morgan Stanley as physicalofftaker of the crude oil and as commodity hedge counterparty, as well as adding aninterest rate hedge, executed initially by Mitsubishi UFJ Securities International.Aside from being one of the few pre-export finance transactions closed in 2009 ofany significant size the deal offered an innovative solution for EGPC. EGPC benefitedfrom having both the crude oil price as well as interest rates hedged while lendersbenefited from having a secure commodity financing. In addition MLAs mitigated theinterest rate exposure by swapping to a fixed interest rate with the interest rate swapallocations auctioned among the MLA banks to get the best price for EGPC.Neil McGugan, head of structured trade finance at BTMU, elaborates: “This deal wasunique in taking a secured bond structure, which EGPC had successfully launched in2005, and adapting it to the structured commodity finance bank market utilising all ofthe elements of a traditional pre-export finance deal. EGPC was very pleased to haveachieved their objective in raising a significant amount of longer term funding, andwith the deal execution, structure and the success of the syndication process in raisingover $1.4 billion from banks.“We were also delighted to have the opportunity to work with our alliance partners,Morgan Stanley, in jointly arranging this deal, and it showed how a partnership betweeninvestment bank and commercial bank can work well. We also raised the profile ofBTMU in this sector of the market, evidencing our ability to structure and market, verysuccessfully, a transaction of this nature, following a significant expansion of thecommodity and structured trade finance team during 2008 and early 2009.”“Leveraging Morgan Stanley’s relationship with EGPC and seamless cooperationwith BTMU allowed us to originate, structure and syndicate a solution valued both byour client and loan investors,” says Arvind Rajpal, head of EMEA commodities financeat Morgan Stanley. “It is a genuine win-win.”Rajpal adds: “We are delighted to see that EGPC’s lending base and relationship withbanks was significantly enhanced through this transaction. EGPC is already back in themarket with a $2 billion financing RfP just two months after the PEL III financialclose.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 87

DEALS OF THE YEARA winning ECA combinationDEWA – ECA-backed financingMLAs: Citi, Crédit Agricole, Deutsche Bank, and HSBC. Borrower: Dubai Electricity and Water Authority (DEWA).Amount: $1.1 billion. ECAs: Euler Hermes, Sace and Coface. Tenor: 13-years. Lawyers: Norton Rose; Clifford Chance(for borrower); Afridi & Angell (for lenders).This was a landmark multi-ECA supported loan facility arranged for Dubai Electricityand Water Authority (DEWA). Backed by Hermes, Sace and Coface, this was the firstmajor ECA financing for a sovereign in the United Arab Emirates and the largest multi-ECA facility ever arranged in the UAE.Citi, Crédit Agricole, Deutsche Bank, and HSBC arranged a $1.1 billion loanpackage for Dubai Electricity and Water Authority (DEWA) to finance theconstruction of power stations and transmission lines and desalination works in theEmirate.The loan re-financed payments made by DEWA to German, Italian and Frenchsuppliers of power and water related capital equipment. In total seven separate ECAloans have been signed under the facility, covering more than a dozen supply contracts.ECAs provided generous cover levels, with Sace offering 100% cover (a first for theUAE) for its $150 million tranche with an option of a further tranche of up to $300million on a reinsurance basis. Both Coface and Euler Hermes offered the traditional95% cover.88 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARHighlighting the significance of the deal, DEWA’s managing director and CEOSaeed Al Tayer says: “This is a landmark financing for DEWA which underscores theconfidence shown by the international bank market and ECAs in our long-termbusiness strategy and growth prospects.”The borrower was able to raise over $1 billion over 13 years, at pricing levelsconsiderably below CDS benchmarks for much shorter tenors. Market sourcesindicated an all-in pricing of approximately 260bp for thirteen-year debt including fees,thought to be 100bp – incredibly attractive pricing given the context of the market.Impressively the borrower was also able to raise the funding in its own name without anexplicit Department of Finance guarantee.Piers Constable from structured trade and export finance at Deutsche Bank says:“The DEWA deal came to the market at a challenging time for export finance banks,with credit committees cautious about any new exposure for UAE names. The fact thatthis deal constituted the first major multi-ECA financing for a sovereign related entityin the UAE, and achieved a long tenor and competitive pricing, says everything aboutthe client and its clear and strong connection to the government of Dubai and itsstrategic importance in the wider economy. It is a great example of how ECA financecan assist top names in more established markets when other funding streams are hardto access.”This was a complex fund raising exercise which involved four mandated leadarranger, three ECAs, and around twenty European, Asian and Middle Eastern suppliersto achieve one of this year’s most talked about deals.Simon Lee, director, project and export finance, Middle East and North Africa atHSBC, says: “This was the first ever ECA-supported financing for DEWA so it wasalways going to be a landmark financing with a number of notable features. Sace,Hermes and Coface provided support on a standalone basis, recognising the strength ofDEWA’s business and the strategic importance of DEWA to Dubai. In addition, ECAsupport was provided in respect of existing contracts, effectively providing a refinancingof these, in recognition of DEWA’s substantial future capex programme and theopportunity for new contracts.”“Multiple facilities were structured through a framework agreement, added to whichother ECAs have also provided support for the deal through partial reinsurance to Sace.This was an outstanding example of where ECA support has added substantial value fora high profile entity in the region. HSBC was delighted to act for DEWA not only asmandated lead arranger but also as documentation bank and Sace agent,” adds Lee. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 89

DEALS OF THE YEARSantander flies high for Abu DhabiEADS Casa – ECA-backed financingMLA: Santander. Borrower: MRTT Finance Company BV. Amount: $1.078 billion. ECA: Cesce. Tenor: 15-years. Lawyers:Clifford Chance. Equipment supplier: EADS Casa.The government of Abu Dhabi has not been an active user of export credit in the past, butstep by step they are accessing several national programmes to support their substantialinvestment necessities. And in this high-profile transaction, the Gulf state signed a $1.078billion buyer’s credit facility with sole mandated lead arranger (MLA) Santander to financethe purchase of three A330 multi-role tanker aircraft (MRTT) from the Spanish companyEADS Casa in late 2009.The buyer credit is covered by Spanish export credit agency Cesce, and is arrangedand fully underwritten by Santander. This is the first deal done by Cesce in the UnitedArab Emirates (UAE). Other banks participating in the loan are: BBVA, BNP Paribasand Deutsche Bank. The margin is at the commercial interest reference rate.Apart from being an ECA-backed transaction in the UAE, the deal is unique in otherways. It facilitates the purchase of MRTT aircraft by the UAE Armed Forces (UAEAF)from EADS Casa under a commercial contract signed in 2008, but one that the UAEAFonly decided to finance in mid-2009. The commercial contract is denominated in eurosand the financing is granted in US dollars, as required by the borrower.Due to previous commitments under the commercial agreements between the parties,the transaction required a swift and efficient execution in a very limited time frame. Thiscalled for all parties, including Cesce, Santander and legal counsellors, to work around theclock to set up a legal structure which would meet the government of Abu Dhabi’srequirements. Clifford Chance acted as legal advisers to the parties.The structure, rather unique for a defence-related contract, involved setting up aspecial purpose vehicle (SPV) – MRTT Finance Company BV – to channel thefinancing, plus a tailor-made guarantee from the government of Abu Dhabi. Cesceprovided 99% cover not only for political and commercial risk, but also for principaland interest.José Luis Vicent, executive director, head of export finance Iberia, Italy & Nordiccountries at Santander, comments: “This is one of very few examples, outside ofinfrastructure deals, where the government of Abu Dhabi has provided a quasiguaranteeon a SPV and used export credit agencies. This is the first deal done by Cesceand one of only a handful of export credit agency backed buyer-credit deals ever doneby Abu Dhabi.” ■90 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARMeeting the needs of Iraqi powerTrade Bank of Iraq – export letter of creditAdvising/confirming bank: JP Morgan. Issuer: Trade Bank of Iraq. Borrower/Purchaser: Government of Iraq. Legaladvisory: DLA Piper (Chicago) advised Iraqi Ministry of Electricity. Amount: $3 billion.The size, scope and purpose of this deal has certainly grabbed our attention, and it is safeto say that this is indeed a landmark transaction with JP Morgan at the helm.In December 2008, The Iraqi Ministry of Electricity and GE Energy signed anagreement for the purchase of power generation equipment and services valued at nearly$3 billion. The announcement was a significant milestone in Iraq’s economic developmentas the country seeks to rapidly develop its energy infrastructure and increase its electricityproduction.Under the agreement, GE Energy is providing heavy-duty frame 9E multi-fuel gasturbines capable of supplying 7,000 megawatts (MW) of electricity. The government ofIraq plans to install the units at key sites around the country to provide needed supportfor the electricity grid. Iraq’s daily power generation output averages less than 6,000MW, while the demand is typically more than 10,000 MW. The GE turbines canprovide a platform for power stability, helping to address electricity shortages andpositioning Iraq for economic growth.As part of the agreement, GE Energy will also provide technical advisory services,performance testing and spare parts to support the reliable operation of the turbines. Inaddition, GE will provide technical and management training in order to help Iraqstrengthen its power sector workforce. Because of the bank’s relationship with GE and itshistory of advising and confirming large transactions for the company, JP Morgan wasnominated to handle this important transaction.In April 2009, The Ministry of Electricity of Iraq, through the Trade Bank of Iraq,issued the documentary letter of credit covering the sale of the equipment. JP Morganadded its confirmation and advised the letter of credit to GE. JP Morgan rarely advisesand confirms such a large transaction for a single client, and is proud to have been a partof this historic agreement.Iraq’s Minister of Electricity, Dr. Kareem Waheed al-Aboudi, notes: “My ministry isdedicated to meeting the electricity needs of all the people of Iraq and to support ourgrowing economy. The complex agreement with GE was concluded duringchallenging times. It could not have been achieved without the tireless efforts of mystaff, the financial advice and support provided by the professionals of JP Morgan andthe legal advice from our international law firm, DLA Piper. We look forward toattracting independent power developers and investors to Iraq to help build and operateplants with the GE equipment that we have purchased. God willing, progress will bemade every day as security continues to improve and additional fuel supplies becomeavailable.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 91

DEALS OF THE YEARECA debut in MauritaniaGuelb II – ECA/DFI-backed financingMLAs: BHF-Bank, BNP Paribas, KfW IPEX-Bank, Société Générale. DFIs: African Development Bank, Agence Françaisede Développement. European Investment Bank, Islamic Development Bank. Borrower: Société Nationale Industrielleet Minière (SNIM). Amount: $748 million. Overall amount of debt financing $599 million, Commercial bank exportcredit $134 million, DFIs direct funding $465 million. ECA: Euler Hermes. Tenor: 13-years for commercial banks.15-years for DFIs. Legal counsel: Lovells, White & Case.This deal is the first ever long term ECA-covered financing in Mauritania and, being partof a total $1 billion investment programme, is the largest in the history of the country. Itdemonstrates how important ECA-backed financings are going to be in African marketsand is likely to act as a catalyst for many other investments in Mauritania.Project ‘Guelb II’ finances the expansion of Société Nationale Industrielle etMinière’s (SNIM) existing Guelb iron ore mine, the construction of a new mineral portat Nouadhibou, and the construction of a new iron ore beneficiation plant for theproduction of an additional four million tonnes of high quality iron ore concentratesper year. The overall $599 million financing package includes $134 million of exportcredit financing, funded by commercial banks BHF-Bank, BNP Paribas, KFW IPEX-Bank and Société Générale.This financing is covered by German export credit agency Euler Hermes. “This is thefirst time that SNIM has had access to ECA cover and long term loans from commercialbanks. It is a very important development for the company and vital for the Mauritanianeconomy,” states Beate Bischoff, head of structured export finance, BHF-Bank.Development financial institutions (DFI) facilities make up the remaining $465million provided by African Development Bank, Agence Française de Développement,European Investment Bank and Islamic Development Bank – the latter putting in placean Islamic lease structure. The ECA-backed commercial bank facilities have a tenor of13-years door-to-door, including three years of disbursement and 10-years ofrepayment, while the DFI facilities have a tenor of 15-years door-to-door, includingthree years of disbursement and 12-years of repayment.“Along the original group of arrangers and lenders of the transaction, including bothhistorical partners and newly involved commercial banks, the financing plan designedfor the Guelb II Project was inspired by both project financing and corporate lendingpractice, to highlight both the challenges inherent to such large scale projects and thespecific track-record of the company, which has been operating for more than 35years,” says Patricio Malone, structured export finance, BNP Paribas.Hatch Corporate Finance acted as adviser to SNIM throughout the deal. SNIM is theworld’s seventh largest seaborne iron ore producer, the largest company in Mauritania andthe only producing iron ore company in West Africa.Detlev Riesenkampff, structured export finance BHF-Bank, comments: “The projectitself is no doubt anti-cyclical. The extended mining operations will come intoproduction at a time when the global economy is expected to have recovered from thecrisis and demand for iron ore will then be high, not only from China but throughoutSNIM’s traditional sales markets.” This successful operation highlights the fact that invery specific and atypical environments, innovative structures can attract financierswhilst supporting the expansion of sponsors who are successful in their markets. ■92 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARTapping new liquidity for aircraftDAE – ECA capital markets guaranteeMLA: Citi. Borrowers: Dubai Aerospace Enterprise (DAE). Amount: $438.8 million. ECA: US Ex-Im. Issuer & Lessor:Gate Capital (Cayman) Two Limited. Lessee Parent: DAE Capital. Lawyers: Milbank, Tweed, Hadley & McCloy.Equipment supplier: Boeing.Citi has a solid reputation for aircraft financing and a longstanding relationship with theExport-Import Bank of the United States (US Ex-Im), so it came as no surprise to see anumber of ECA-backed aircraft finance transactions submitted this year. One deal inparticular stood out – or rather one structure stood out.The Export-Import Bank of the United States (US Ex-Im) has been lauded for itsinnovative crisis response, and its capital markets guarantee programme made asignificant impact in lowering the cost of borrowing for airlines around the worldlooking to buy Boeing aircraft.While not quite the first use of the structure – that honour goes to the CréditAgricole and Goldman Sachs arranged facility for Emirates Airlines that signed theprevious day – the Dubai Aerospace Enterprise deal represents how a longstandingrelationship between an agency and a bank’s export finance team can make sure thatdeals get done in difficult times.In demonstrating how the structure works, the DAE deal provides an excellent casestudy. DAE is a global aerospace, manufacturing and services corporation made up of sixdivisions, including DAE Capital. This deal is DAE’s first US-Ex-Im aircraft financing,and under the capital markets guarantee the deal was first structured as a loan facilitywith the flexibility to convert to a capital markets structure. Citi acted as the sole leadarranger, guaranteed agent and indenture trustee and through the Govco vehicle,provided DAE attractive interim financing during the aircraft delivery period to rampup to a suitable facility size for a capital markets note placement.The purpose of the deal is to finance the acquisition of one 777 and eight 737 familyaircraft from Boeing, allowing DAE to continue to expand, and securing US jobsduring a recession.The structure is documented under an indenture to provide the issuer the flexibilityto refinance the notes in the capital markets. The issuer benefits from any cost savingsthat can be achieved without any need to amend the documentation. In the eventcapital markets distribution is not possible, Citi provides financing for the full 12-yearterm of the transaction. The structure also provides the borrower price certainty for thelife of the deal.While export credit has been used to finance aircraft for over 30 years this structure isthe first time any airline or lessor has financed the government guaranteed debt byissuing bonds. While bonds will only be an option for more sophisticated airlines orlessors – with large deliveries in a single period and the ability to wait for the market toprice deals after delivery – this looks set to be a significant new asset class. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 93

DEALS OF THE YEARFinding a solution for Saudi powerSEC Power – ECA direct loanAdvisor & ECA Agent: Crédit Agricole. ECAs: US Ex-Im; EDC. Borrower: SEC Power generation Project – SaudiElectricity. Amount: $1.12 billion. Tenor: 12-year. Lawyers: Allen & Overy (for SEC); Clifford Chance (for the ECAs).Equipment supplier: General Electric (GE).The year 2009 saw a number of groundbreaking export credit agency deals sign – asignificant number of them in the Middle East – and this transaction represents a first inmany respects. It is the borrower’s first export credit agency loan; it is the first corporateloan into Saudi Arabia for either of the export credit agencies involved; it is the firstdirect loan co-financing provided by the Export-Import Bank of the United States (USEx-Im) and Export Development Canada (EDC) under single documentation; and it isGeneral Electric’s (GE) largest single transaction supported by the two ECAs.Until recently Saudi Electric Company (SEC) borrowed primarily from the domesticmarket as well as the Islamic Sukuk bond market. It is also financed by the Saudigovernment, though this is diminishing as the company becomes more independent.When it came to purchasing new US-manufactured GE gas turbines, the company lookedto the commercial market. When the global economy began to slow, lending rates went upand commercial bank loans were no longer an option. At this point Crédit Agricolecontinued offering financial advice to SEC on how to progress, but without offering a loanitself. Various options were explored by SEC and Crédit Agricole and a direct ECA loanwas selected.94 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSEC secured a 12-year facility with $912 million from US Ex-Im and $200 millionfrom EDC totalling $1.103 billion. Crédit Agricole acted as the payment agent. SECborrowed at the commercial interest reference rate (CIRR), which will be determinedon the draw-down date.The deal is split between three projects, each with an EDC tranche and a US Ex-Imtranche, and each with different start dates of repayment. The majority of theequipment has already been delivered and the repayment period of 12 years amortisessemi-annually.Funds come from the two ECAs and are funnelled through Crédit Agricole, so SECpays off one loan. From the SEC perspective this looks co-financed because there’s justone loan and one agreement.Although EDC has worked with US Ex-Im in the past, this is the first time EDC hasco-lent with US Ex-Im. In this market, EDC has a strong working relationship withGE, who purchases significant goods and services from GE Canada and many otherCanadian suppliers.Legal advice came from Allen & Overy for SEC and Clifford Chance representedboth ECAs. US Ex-Im and EDC assumed the risk on SEC as they are comfortable withthe financial situation through its shareholding, its strong balance sheet and its AApublicrating.The funds were for the purchase of 23 GE Energy 7FA gas turbines with a nameplatecapacity of 2.9MW, for use in three power plants. The US Ex-Im loans break down bypower station: Faras, received a loan of $150.7 million, which will support the sale offour generator sets to expand the plant’s capacity by 500MW. Power Plant 8 in westernRiyadh received a loan of $151.1 million for four generators, which will increase theplant’s capacity by 492MW. A new power station to be located near an existing plant atAl Qurayyah received a loan of $611.1 million, which will support the sale of 15generator sets, resulting in a total installed capacity of 1,890MW.André Gazal, managing director and group head export and trade finance at CréditAgricole in New York, says: “We are very pleased to have successfully delivered to SaudiElectricity Company its very first export credit financing. This is an important landmarkfor the company as it sought to diversify its funding sources from local bank and Sukukfinancing and extend tenors.“This financing allowed SEC to secure alternative long term financing on attractiveterms in a very tough environment. We are appreciative of US Ex-Im and EDC’ssupport throughout the process.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 95

TOP REGIONAL BORROWERS & LENDERSTop 10 borrowers for Middle Eastern and North African tradefinance (including bilateral) 1 Jan - 29 Nov 2010Deal valuePos. Borrower US$ m No. %Share1 Saudi Aramco Total Refinery &Petrochemical Co (SATORP) 8,210 1 37.42 Egyptian Refinery Co - ERC 2,598 1 11.83 Dhuruma Electricity Co 2,047 1 9.34 Egyptian General Petroleum Corp - EGPC 2,000 1 9.15 Emirates Aluminium - EMAL 737 1 3.46 Al Suwadi Power Company SAOC 704 1 3.27 Al Batinah Power Co SAOC 657 1 3.08 African Export-Import Bank - Afreximbank 650 2 3.09 Oceanus Maritime Ltd 588 1 2.710 Salalah IWPP 500 1 2.310 General Holding Corp - GHC 500 1 2.3Total 21,957 56 100.0Source: DealogicTop 10 MLAs for Middle Eastern and North African trade finance(including bilateral) 1 Jan - 29 Nov 2010Deal valuePos. Arranger US$ m No. %Share1 Saudi National Commercial Bank 1,839 2 8.42 HSBC 1,689 17 7.73 Standard Chartered Bank 1,589 22 7.24 Deutsche Bank 868 8 4.05 KfW 842 5 3.86 Credit Agricole CIB 829 14 3.87 JPMorgan 678 5 3.18 SG Corporate & Investment Banking 628 9 2.99 Samba Capital 558 2 2.510 Total SA 498 1 2.3Total 21,957 56 100.0Source: Dealogic96 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

ASIA PACIFICAsia Moves Onward and UpwardSteven Beck, Head of Trade Finance, Asian Development BankThis has been an extremely active year for the Asian Development Bank’s (ADB) tradefinance business. It has been so active that we will very likely need to ask our Board –which represents ADB’s 67 shareholder governments – early in 2011 for moreheadroom capital to be dedicated to the Trade Finance Programme (TFP).Volumes for the year are expected to come in at around $2.4 billion, around 25% higherthan in 2009. When you consider that ADB’s trade finance business does not assumeIndian, Chinese, Korean, Thai or Malaysian risk – given that we focus on the region’smore challenging markets where the private sector has less appetite – the programmehas provided substantial support to trade, and it is poised to grow further in 2011.While the TFP is market driven and operates much like a commercial business,providing guarantees and loans in a day and working with a broad mix of private andsome state-owned commercial banks, its mandate is to reduce poverty. Most mediaattention focuses on how Asia is steaming ahead to prosperity, and in the context of allthis exuberance it is easy to forget that over 900 million Asians still live on less than$1.25 a day. In boosting trade in the region’s frontier economies, the TFP aims, to makea dent in that huge number.Leveraging off Asia’s rapidly developing nations to support development in theirpoorer and economically stagnant neighbors is a major benefit of intra-regional trade.This is a trend we have increasingly seen in 2010 and expect to continue in 2011.Without forcing the issue, around half of the TFP portfolio supports intra-Asian trade,mostly between developing member countries.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 97

ASIA PACIFICChina plays a significant role in the rise of intra-Asian trade and we have started to seethe nature of this role shift somewhat over the course of the year, no doubt thebeginning of a trend. China established itself as a hub for much of Asia’s exports,assembling parts, many of which were supplied from other Asia countries, for export todebt-laden Western consumers. But China the assembler of Asian parts for export tothe West is increasingly becoming China the final consumer. As China’s middle classgrows at an exponential rate, it increasingly consumes Asian products. So out of theglobal financial crisis, we have seen an acceleration of intra-Asian trade withcompanies re-aligning or diversifying export destinations within the region with aview to selling finished products to Asia’s increasingly affluent population.Growing intra-Asian trade is a positive development both for Asia and the globaleconomy. From Asia’s perspective, less reliance on the West as the primary buyer of itsproducts mitigates the risk of falling demand from the struggling Western economies.For the rest of the world, greater intra-Asian trade represents an opportunity. It helpsAsia become wealthier, supports the growth of the middle class and, along with it, anappetite for consumption. As such, more intra-Asian trade represents an opportunityfor the rest of the world to tap new markets in Asia.But, at the same time, if poverty isn’t addressed, the gains made in Asia could comeunder threat. ADB places some focus on providing financial resources to these povertystricken, often isolated areas, by linking them to more prosperous centers withinfrastructure -- such as roads, bridges, ports, energy – critical to trade links andtherefore opportunities for investment, growth, and jobs. Supporting intra-regionaltrade through the TFP is another vehicle used by ADB to encourage these linksbetween prosperous and poor regions within Asia.The TFP’s four largest markets in the first 10 months of 2010 by dollar value werePakistan, Indonesia, Viet Nam and Bangladesh respectively. But by number oftransactions, TFP’s largest markets were led by Bangladesh, Pakistan, Sri Lanka andNepal. Demand for guarantees in Bangladesh and Pakistan were very high in 2010, aswas the case in 2009.In an effort to meet the huge demand in Bangladesh, ADB teamed up with theNetherlands Development Finance Company, or FMO, in a risk-sharing agreement,which started in 2010 and will come into full effect in 2011. Similar arrangements arecurrently being discussed with other bilateral and export credit agencies which wehope to implement in 2011.In Pakistan, we initiated a number of steps to meet greater demand from there. Weincreased limits substantially for most of the TFP’s 11 Pakistani bank partners. We alsocreated special oil facilities, so that the chunky oil transactions TFP supports would noteat into support for business in other commodities and capital equipment. These oilfacilities have been well used. Finally, following the devastating floods there this98 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

ASIA PACIFICsummer, ADB created a Special TFP Flood Relief Facility comprising a short-termfacility to support more commodities imports that may arise from the floods and amedium-term facility to support capital equipment needs for infrastructure and otherreconstruction efforts. As such, the TFP has proved to be an excellent crisis-responsemechanism even beyond the global financial crisis.The TFP had trouble, at the beginning of 2010, keeping up with Viet Nam’s hugeappetite for trade loans. But by middle 2010 we were able to increase lines substantiallyin that market too.In 2011, the TFP will expand to at least more countries, including Armenia, Georgia,Kyrgyzstan, Kazakhstan, as well as into countries in the Pacific. By the end of 2011, weanticipate the TFP will be offering risk mitigation in approximately 20 countriesthroughout Asia and the Pacific.As well as offering increasing trade support last year, ADB has also worked hard in theregulatory arena.The financial crisis precipitated a tightening of banking regulation in the form of theimpending Basel III guidelines. Because Basel III makes little-to-no distinctionbetween high-risk forms of finance and trade finance, banks would require the sameamount of capital to do a risky (high margin) transaction as it would for a low-risk(lower margin) trade finance transaction. This would make provision of trade financeless attractive for financial institutions, meaning less would be available to tradingcompanies and at a significantly higher cost.Because of the importance of this issue, ADB teamed up with the International Chamberof Commerce (ICC) to create the ICC-ADB Trade Finance Default Register. Thisregister set out to prove, with figures, what we all know intuitively: that trade finance has alow risk profile. The ICC-ADB Register compiled data from over 5 million transactionsgoing back 5 years and the figures show a 0.02% probability of loss on this data set.ADB and ICC met with the Basel Secretariat in October 2009 to discuss the findings ofthe register and to outline our concerns about the upcoming Basel III rules. The meetingwas constructive and we look forward to continuing our discussions to arrive at aregulatory environment that creates a more robust and stable global financial system, butdoes not threaten to grind trade – a huge engine of global economic activity, prosperity,jobs and development – down. We all need to be vigilant on this issue in 2011.Our hard work resulted in TFP winning two industry awards this year, including "bestdevelopment bank in trade". No doubt this was mostly due to the excellent clientservice provided by our middle office and the TFP's strong market orientation. Manythanks to our 200 financial institution partners for all their support and confidence. Welooking forward to another exciting and very active year in 2011. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 99

DEALS OF THE YEARStyled performance for ErdenetErdenet – pre-payment financingMLAs: Banco Espirito Santo (BES); Rabobank International. Borrower: Ocean Partners – onlending to Erdenet.Amount: $55 million. Tenor: 1-year. Lawyers: Denton Wilde Sapte. Offtaker: Ocean Partners.At a time during 2009 when ‘new’ metals financings deals were non-existent,Rabobank International brought a new pre-export financing deal together forMongolia’s Erdenet Mining Corporation (Erdenet) in conjunction with Banco EspiritoSanto (BES). This was the first big ‘new money’ metals deal for an emerging marketproducer in 2009. At the time the deal was the largest pre-financing ever arranged forErdenet and for that matter the largest ever concluded in Mongolia. It also marksRabobank’s inaugural entry into the country and in doing business with Erdenet. It is aworthy winner of a Deal of the Year award.Of crucial importance to this transaction was the leading role taken by OceanPartners UK (OP), acting as trader/offtaker, when they approached Rabobank withtheir requirements. In addition, what also makes this deal so sweet is the closerelationship of all the players involved, their immense experience in metals financingsand the smooth way that the deal was structured in the City of London.The deal in question is a one-year, $55 million trader-led pre-payment financing forMongolia’s Erdenet copper mine, located some 400 kilometres north-west of the capitalUlaanbaator. The deal is a club arrangement, with Rabobank acting as coordinatingarranger and providing $42 million of the funding. BES is providing the remaining $13million.OP is the borrower of record, which on-lends to Erdenet. As such, there is a passthroughrisk, with performance risk being taken on Erdenet to produce and delivercopper concentrate to OP at the Chinese border. Pricing on the deal was not disclosed.The deal was signed on 15 May and full drawdown took place on 22 May. DentonWilde Sapte (DWS) acted as legal counsel for the lenders.In the climate of early 2009 putting such a transaction into place was nothing shortof exceptional, and relationships between all the main parties proved key.Leading the deal for OP were Paul Smith and Siva Pillay. The latter, in former years,was a structured commodity finance (SCF) banker with Standard Bank andFortis/MeesPierson. OP has been doing business with Erdenet for many year, and isone of the largest offtakers of concentrate product from the mine.Leading the deal for Rabobank from London was Paul Lodwick, director, metals andminerals, CEEMEA and South America. Before joining Rabobank, Lodwick was atKBC in London, a bank which over many years had arranged and provided finance forErdenet. Also within Rabobank London is Mital Patel, head of the metals and mineralsteam for CEEMEA and South America. Patel was also at KBC and before that atWestLB – another bank which has good experience and history with Erdenet goingback to the late 1990s.At BES, David Wightman, director, structured trade finance in London led the bank’sinvolvement having previously worked with traders of Ocean Partners in 2001 when atKBC, and both Ocean Partners and Erdenet at WestLB in 2004. Assisting Wightmanwas Chris Brown formerly of VTB Bank Europe.At DWS, senior associate Veronika Koroleva led the firm’s activity on the deal,100 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARoverseen by Geoffrey Wynne, partner and head of trade banking.Lodwick explains: “This was a relationship driven deal. Ocean Partners are anexisting client through a traditional trade finance facility that the bank provided tothem approximately a year ago. Rabobank has a very strong relationship focus and giventhe team’s previous experience of Erdenet, this was an ideal opportunity to assist ourclient. It helped that the various parties involved in the transaction know each otherwell and have all worked on Erdenet deals in the past. Erdenet, which is a parastatal, hasalways produced consistently and we believe there are strong arguments as to why it willcontinue to do so. Ocean also has very close relationship with Erdenet. These factors allhelped in getting credit approval.”This deal was the first financing for Erdenet for some considerable time. The collapsein price towards the end of 2008 meant the mine needed additional working capital.OP, as one of the principal lifters of concentrate from Erdenet approached commercialbanks, although it was Rabobank who then took up the mantle of arranging. OPsubsequently invited in BES to make up the financing to the required level of $55million.Erdenet was looking for a fast response on the deal. Comments Lodwick: “Rabobankobtained its approval for the deal in early April, and BES two weeks later. So withdrawdown taking place on 22 May, this deal was put together in under two months.Documentation by Denton Wilde Sapte was seamless. And, importantly, it helped thatwe are all within a few streets of each other in the City of London – this allowed us tohold a number of good old fashioned face-to-face meetings, which made negotiationon documentation much more efficient and saved immense amounts of time.”At BES, Wightman also explains: “The whole deal took two-months from beginningof negotiations to documentation sign off. Both banks were very happy with the speedof the deal. Rabobank now has a full metals desk, which makes deals a lot easier toachieve. Working with Rabobank on this was a delight.”At OP, chief financial officer, Siva Pillay, comments: “While there had generally beena positive response from all of the banks that had been approached about this deal, itwas always clear that the level of understanding and familiarity with Erdenet from thepeople at Rabo and BES made them front runners. Both banks obtained creditapprovals in a short period of time and, as has been commented earlier, proximityenabled us to work through documentation very effectively. These factors combined toenable us to meet Erdenet’s demanding time frame for completion. Being able to doso, in a challenging market context, speaks volumes for the value of relationships andthe old-school SCF structures.”The deal is structured as a limited recourse pre-payment facility rather than a preexportfinance. OP is the borrower of record and it retains a reasonable interest in thedeal by way of a full recourse portion. As borrower, OP uses the loan proceeds to makea $55 million commercial prepayment to Erdenet under its export contract. Although aone-year deal, the export contract that underpins it is for three years providingadditional comfort to the lenders. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 101

DEALS OF THE YEARAdding value for Chinese producersYanggu Copper – structured trade financeMLA: Standard Chartered Bank. Borrower: Yanggu XiangGuang Copper Company. Amount: $7.3 million and$14.6 million. Tenor: 1-year pre-finance; and 90 days inventory. Lawyers: King & Wood.This inventory-backed part pre-financing transaction arranged by Standard CharteredBank for China’s Yanggu XiangGuang Copper Company (Yanggu Copper) is acomplex tightly structured financing, and it breaks many ‘firsts’ in meeting the financingsolutions for a new borrower metals producer in China.Yanggu Copper is newly established in the copper industry and was looking to boost itsliquidity backed by its offtake contract from local copper trader, Shanghai Jin HuiCheng International Trading Company – an existing client of Standard Chartered. Thebank was approached for a pure pre-finance loan, but given the client’s short productionhistory, improved security was necessary.The facility arranged by Standard Chartered and signed on 11 November, 2009,consists of three parts. First, there is a one-year, RMB50 million ($7.3 million) prefinanceloan. Second, a 90 day, RMB100 million ($14.6 million) inventory finance loan.And third, a commodity derivatives hedging facility. The purpose of the facility is aimedat efficiently improving Yanggu Copper’s liquidity through financing the purchase andstorage of copper concentrates and copper cathodes.A spokesperson at Standard Chartered states: “The creative nature of this deal wentwell beyond fulfilling our client’s objective of superior liquidity to also mitigate theirkey risks and gives the bank additional security for a client without a substantial priortrack record. A straightforward pre-finance deal would not have been sufficient toachieve these. A part pre-finance structure, backed with a floating charge over thecompany’s copper concentrates held at the third party warehouse was proposed,together with a financing facility for their import and storage of copper cathodes as rawmaterial.“In addition, a hedging facility was included, allowing the client to hedge its copperexposure on the LME through Standard Chartered. By doing this, they mitigated theirexposure to price volatilities in the copper market, and also helped reduce their marginrequirements on the physical financing, by offsetting the hedge position as collateralagainst the inventory.”This creative solution for the structure allowed the bank to offer one all-in packagefor trade, lending, and hedging, whilst at the same time reducing the client’s risk andallowing them to drive their business forward with additional liquidity. It also set up thepossibility for further expansion and/or rollovers in 2010, as well as further hedgingpossibilities depending on the market situation.Commenting on the deal, Ian Mote, regional head, commodity traders andagribusiness, China, at Standard Chartered, says: “This deal demonstrates the flexibilityin Standard Chartered’s structuring abilities, meeting the client’s pre-finance needswhilst retaining a security position for the bank. We have considerably grown ourexposure in the non-ferrous sector in China and we expect to use more of such creativesolutions in the future to enable us to expand further in this market.” ■102 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARChallenging pre-export conventionsBurwill Group – pre-payment loanMLA: Standard Chartered Bank. Borrower: Burwill Resources. Amount: $30 million. Tenor: 3-years. Lawyers: Baker &McKenzie.This pre-payment loan for the financing of strategic, long-term iron ore purchasescaught our eye because it challenges conventional thinking around pre-exportfinancing. The usual flow of funds on this deal for the steel trader Burwill Resources hasbeen reversed – a purchase in an OECD country is funded from a developing economy,instead of the other way around.Standard Chartered’s financing solution allowed Burwill to push the envelope and bethe first trading company to secure a 5.5 year supply contract from Fortescue MetalsGroup Limited (FMG), the third largest iron ore producer in Australia. It is rare for asteel trading company to obtain long-term iron ore supply from a mining company, butunder this arrangement, Burwill is able to secure at least one million tons per year forChinese steel mills and at the same time secure supply from those mills for its core steeltrading products.Standard Chartered acted as sole arranger and lender on the $30 million, three-yearpre-payment loan to secure the purchase contract. All iron ore purchase and sales are byletters of credit routed through Standard Chartered. The accompanying interest rateswap and forward freight agreement are structured to hedge the interest rate risk andvolatility of freight. The loan repayment is made through sales proceeds from thedelivery of iron ore to the Chinese steel mills. Burwill Resources’ parent companyBurwill Group is acting as guarantor.This deal achieves a win-win situation for not only the borrower and the bank, butfor the supplier as well. By securing a long-term iron ore source, Burwill in turn ensuressupply of steel products from offtakers for its core steel trading business. StandardChartered captures the entire logistics and trade flow of this deal – by capturing the LCflow. Also FMG’s cost of funding is lowered by obtaining pre-payment for a long termsupply. The supplier now does not need to raise debt to fulfil its investment needs formining or infrastructure facilities. In addition, the external funding allows Burwill tokeep buffer cash amid financial market turmoil as well as to diversify into non-steeltrading.Commenting on the deal, Alan Lee, regional head of commodiuty traders andagribusiness, Hong Kong at Standard Chartered, says: “Our deal structure creates a winwinsolution for both Burwill and the iron ore supplier. Burwill secures new resourcesfrom the iron ore producer, which enjoys no-cost financing. With a secured supply ofiron ore from the producers, Burwill is able to strengthen its relationship with majorChinese steel mills, which in turn commit a steady volume of steel products toBurwill.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 103

DEALS OF THE YEARStandard Bank pioneering in MongoliaEnergy Resources – pre-export financingMLA: Standard Bank. Borrower: Energy Resources. Amount: $30 million. Tenor: 2-years. Lawyers: Denton WildeSapte; Lynch & Mahoney. Technical consultant: Tasman Mining.Originating new transactions in the emerging markets was certainly not an easy taskthrough 2009. But in this instance, Standard Bank pioneered a pre-payment facility inMongolia for Energy Resources, a private Mongolian mining company founded in2005. This transaction is the first ever pre-export finance facility made available withinthe private sector in Mongolia.The financing is a $30 million coking coal pr-payment facility arranged and fundedby Standard Bank. The facility has a tenor of 18 months with a six-month repaymentgrace period. The loan was signed on 27 October, 2009. Repayment will be throughthe future production and sale of coking coal with preapproved buyers, assigned to theLenders, and paid through a charged offshore collection account.Energy Resources holds the mining licence for the Ukhaa Khudag coking coaldeposit located in the Amnugobi Aimag region of Mongolia, which has a coal resourcein excess of 400 million tonnes. Mining of the deposit commenced in June 2009 withLeighton Asia appointed on a term contract to undertake all mining activities. Thecompany will use the proceeds of the facility to support the continued ramp up of themine. Raw coal production is exported to China for ultimate sale to the steel sector.The deal closed within eight weeks of being mandated. The short time line forclosing the facility is all the more remarkable given the pre-feasibility status of the mineat the time and the level of technical due diligence that was required to be undertaken.Mine production commenced just six months before disbursement of funds.Besides the working capital nature of the facility, there is additional flexibilityincorporated into the facility terms to allow for the separate funding and constructionof a coal handling and processing plant during the term of the facility.In addition to the above, the facility is supported by the assignment of future cokingcoal receivables from China, where a large supply deficit in coking coal is forecast overthe coming years.Martin Huxley, director, sales and structuring, Standard Bank Asia, Hong Kong,comments: “This first structured pre-export facility within the private sector ofMongolia further demonstrates Standard Bank’s continued strong commitment to theMongolian market. The transaction was possible on the back of active relationships witheach of the individual Mongolian shareholders and understanding of the quality of theUkhaa Khudag coal asset.”He adds: “Standard Bank has been supporting the private sector in Mongolia for fiveyears, developing an excellent working relationship with both Mongolian andInternational counsel that has worked together on many deals, and built up a deepunderstanding of the legal and operating framework. Nevertheless, the early stage of themine operation meant extensive due diligence was required; making the time period tocomplete, structure, and document within a period of eight weeks all the moreremarkable.” ■104 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARKorean steel deal stands firmHyundai Steel – ECA-backed financingCoordinating MLA: Citi. Additional MLAs: BBVA, Crédit Agricole, HSBC, LBBW, Mizuho. Borrower: Hyundai SteelCompany (HSC). Amount: ¥24 billion ($260 million). Tenor: 7-years. ECAs: The Export-Import Bank of Korea (Kexim).Legal counsel: Linklaters, Kim & Chang.This was an impressive deal that saw Citi arrange a key buyer credit for a South Koreancorporate. Not only was the deal the largest foreign currency syndicated loan in Korealast year, but also the largest syndicated loan in Korea across all currencies in 2009.Citi arranged a ¥24 billion ($260 million) financing buyer credit facility for SouthKorean steel company Hyundai Steel. The transaction financed Japanese imports linkedto the construction of the borrower’s new integrated steel mill project in Dangjin. Thetransaction was supported by a club of international banks including, BBVA, CréditAgricole, HSBC, LBBW and Mizuho who joined the transaction as mandated leadarrangers.The deal was fully guaranteed by the Export-Import Bank of Korea (Kexim) withCiti acting as the facility agent. The new mill is a key investment for the producer andwill help the producer’s parent company Hyundai-Kia Automotive group with itsexpansion plans. In addition to the size of the loan this deal stands out due to thechallenging financial environment in which the financing took place.Ravi Saxena, Citi’s Asia-Pacific trade head, says: “Citi was awarded with the mandateto arrange the 100% Korea Eximbank covered facility, in spring of last year when themarket conditions were extremely volatile. During this time the Korean wondepreciated more than 50% against the US dollar and appetite for term financing wasvery limited. Despite these considerable challenges, Citi successfully closed the largestsyndicated foreign currency loan transaction in Korea post-Lehman, in June 2009.”Grace Li, head of structured trade finance Asia at BBVA comments: “It is an honourfor us that this transaction receives a Deal of the Year award. For our customer, HyundaiSteel, it is an important achievement as it represents the cornerstone of the financingpackage for the construction of its Dangjin Project (an integrated steel mill). FromBBVA’s perspective, it is yet another good example of the bank s commitment to Asia,and marks a milestone in the strengthening of our relationship with Kexim,highlighting the great potential of the cooperation agreement signed between both ourinstitutions.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 105

DEALS OF THE YEARBBVA electrifies China connectionChina Railways – structured tradeMLA: BBVA. Borrower: CITIC Bank. Amount: e75.5 million ($102 million). Tenor: Bridge loan: 7 months; FAD loan: 11years grace period plus 36 years amortisation; Buyer’s credit: 17 months drawdown and 10 year amortisation. ECA:Cesce. Exporter: Balfour Beatty Rail Ibérica -Cobra.This was an inspiringly novel financing that saw BBVA as sole mandated lead arrangerprovide a mixed long-term structured trade finance arrangement to support a buyercredit, a bridge loan and a development loan. BBVA engaged in an extremely imaginativeuse of different financing instruments to offer an unbeatable package to its Chinese client.BBVA arranged a a75.5 million buyer credit to the Chinese Ministry of Railways tofinance a contract with Balfour Beatty Rail Ibérica – Cobra to electrify the railwayalong the Xinxiang-Heze-Yanzhou-Rizhao routing in China.BBVA secured backing from Spanish export credit agency Cesce for the deal andalso succeeded in arranging part of the facility to be paid through the pool ofdevelopment loans, Fondos de Ayuda al Desarrollo (FAD), available between theSpanish and Chinese government.BBVA had to convince both governments to use the funds for CITIC, who was thedirect borrower in the transaction – despite the fact the CITIC was a private borrower.This was the first time that the funds had been used for a non-public Chinese borrower.As a direct consequence the negotiations behind the deal were incredibly complex.BBVA showed real commitment to the deal and agreed to offer a seven-montha49.2 million bridge loan to CITIC that had to be rapidly concluded due to financialand commercial pressures. The final loan package consisted of a38.5 million of FADfunds, with an additional a38.5 million buyer credit which enjoyed 99% cover fromCesce.The benefit of the FAD loan lies with the long tenor which has an 11-year graceperiod followed by a 36-year amortisation. BBVA also signed an interest rate swap withSpanish state agency Instituto de Crédito Oficial (ICO) who agreed to acting ascounterpart in the IRS.José Luis Serra, BBVA’s head of STF Spain and Portugal, comments: “We believe thisdeal is a groundbreaking transaction and are happy to see it recognised as Deal of the Yearby Trade Finance Magazine. It stands out not only by the complexity of its structure (whichincludes a bridge loan, a Spanish development fund (FAD) facility and a buyer’s credit), butalso by the fact that it was the first time FAD funds were granted to a non public borrower,in this case CITIC.”“In addition, for BBVA, the deal comes as a particularly rewarding recognition of thevalue added of our strong partnership with CITIC and the group’s global coverage.” ■106 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARStanChart sweetens inroads into ChinaGuangxi Yongkai Sugar – pre-financingMLA: Standard Chartered Bank. Borrower: Guangxi Yongkai Sugar Manufacturing Company. Amount: RMB150 million($22 million). Tenor: 300 days.Acting as mandated lead arranger, Standard Chartered Bank arranged an inventorybackedpre-financing for China’s Guangxi Yongkai Sugar Manufacturing Company(Yongkai Sugar), a supplier to big name food producers in China, in a deal signed on 5November, 2009. This transaction is the first time that an inventory-backed finance dealhas been done for sugar stocks domestically in China, and as such breaks new ground inthis difficult market.The financing is a RMB150 million ($22 million) bilateral revolving facility, with atenor of 300 days. The facility is a risk-mitigating, customised solution, includingextending the allowable tenor out for 300 days, to match the client’s physical stock period.The facility was aimed at financing Yongkai Sugar’s working capital requirements,whilst matching the seasonal nature of their business. Yongkai Sugar buys sugar canedirect from the farmers during harvest season, and processes this directly into whitesugar, before storing the sugar and then selling it during the following year. Theyrequired a solution that matched this business cycle.Sugar companies are closely linked within one area of the country, and theirfinancing has traditionally been dominated by the local banks, on a relationship basis, atcheap rates without security.Standard Chartered made a breakthrough by offering a risk-mitigating, customisedsolution to best suit the needs of the client, which also secured the bank withoutimpacting on the commercial and logistical requirements of Yongkai Sugar. StandardChartered also presented a one-stop-shop by combining the bank’s financingcapabilities with its ability to market and execute equity capital markets products.The bank used stocks held at the client’s own storage locations so as not to disrupttheir existing logistical operations, relying instead on a third-party collateral manager. Inaddition to the physical sugar held as inventory, the bank received extra comfort withYongkai Sugar’s regular offtake from big name food production buyers and largedeliveries through the Guangxi Sugar Market Network, giving them numerous salesopportunities and outlets.This deal also contained an element of corporate social responsibility; by allowing thecompany access to greater working capital, could then advance more funds directly to their200,000 supplying farmers during the growing season. This increases the ability of the farmersto access products to improve their yield, and hence the commercial return to the client.The clear benefits to Yongkai Sugar from the tailored structure and other uniqueproduct offerings also allowed Standard Chartered’s commodity team to close this dealin record time. Commenting on the deal, Willem Klaassens, managing director and globalhead, commodity traders and agribusiness, at Standard Chartered in Singapore, says: “Thisis Standard Chartered’s first structured deal in China for soft commodities and marks ourambition to become more involved in China ‘s domestic agricultural businesses,particularly in sugar, cotton, and fertilisers. There is a huge potential in these markets andthis partnership with Yongkai illustrates that local producers are becoming more willing tolook at structured deals in order to improve their liquidity position.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 107

DEALS OF THE YEARFlexible response and rapid deliveryUS Ex-Im/Korea – LC programmeArranger/credit supporter: Export-Import Bank of the United States. Provider: Bank of America Merrill Lynch.Amount: $270 million. Tenor: Up to 360 days. Clients: Major Korean banks/corporate importers.Given the severe dislocations evident in the global financial markets in late 2008/early2009, it was critical that major trade finance providers establish programmes whichwould allow cross-border flows to continue despite the difficulties in raising funds andmitigating increasing market risks. This programme shows how banks and export creditagencies can work together to make sure trade keeps moving.In order to address these issues relative to US exporters doing business with Koreanbuyers, the Export-Import Bank of the United States (US Ex-Im) created a facilitywhich would insure up to $2.9 billion of lenders’ confirmations for major Koreancommercial banks’ LCs under their export letter of credit policy.A number of banks took up the opportunity, and in accordance with this framework,Bank of America Merrill Lynch designed a structured trade finance solution whichprovided confirmation limits to eight Korean banks, as well as import financing (underbankers’ acceptances) for their key corporate clients. The bank extended a total of $270million under this programme with tenors up to 360 days.Key benefits of this programme include the provision of sufficient issuing bank creditlimits to support critical trade financing needs; the opening up of export salesopportunities despite a severe shortage of credit availability in developing economies;enhancing exporters’ financing structures and allowing them to better manage theircash flows; and reducing cross-border political and economic risks for exporters at avery difficult time in global markets.The programme also generates liquidity for Korean importers at favourable ratesencouraging them to source goods from the US, while improving their working capitalpositions and countering pressures to tighten payables terms.Bruce Proctor, trade and supply chain product management executive at Bank ofAmerica Merrill Lynch, notes: “The flexibility and responsiveness demonstrated by thetrade and supply chain team at Bank of America Merrill Lynch and our partners at theUS Ex-Im Bank resulted in the rapid delivery of this important financing facility forour Korean clients, despite very difficult market conditions.”The comprehensive financing programme offered by the bank generated significantmarket opportunities for participants throughout these important international supplychains. Due to its ability to work quickly with buyers, sellers and the financialinstitution intermediaries, Bank of America Merrill Lynch stood out as a provider ofsubstantial amounts of essential financial support to key Korean corporates, at a timewhen world trade had been sharply curtailed and commercial financing was verydifficult to obtain.A total of 10 US confirming banks approved $1.96 billion under the programme in2009. ■108 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARLocal and large for Chinese aluminiumEast Hope – pre-financing facilityMLA: Crédit Agricole. Borrower: East Hope San Men Xia Aluminium Company. Amount: RMB900 million (approx. $132million). Tenor: 3-years. Lawyers: Zhong Lun Law Office.This landmark deal is a RMB900 million ($132 million) pre-export financing forChinese aluminium producer East Hope San Men Xia Aluminium Company (EastHope), structured by sole mandated lead arranger Crédit Agricole. Signed on 18 March,2009 it was the first large scale renminbi (RMB) denominated structured commodityfinance (SCF) successfully syndicated in China.Crédit Agricole was mandated on the back of its existing relationship with theborrower. The mandate was won thanks to the work on the ground done by seniorCrédit Agricole banker Didier Ong, together with Hong Kong-based natural resources,infrastructure and power’s (NIP) head of natural resources Annie Chan, and LondonbasedNIP’s head of Asia and Africa for SCF, Gilles Sayer.The financing is to fund working capital requirements, particularly the purchase ofbauxite, as well as plant improvement capital expenditure. The three-year, financing issupported by a long-term offtake contract with a related aluminium smelter and astandby offtake with an international trading house.With both the producer and offtaker being onshore entities in China and the facilitydenominated in RMB, the financing is a successful adaptation of internationalstructured commodities financing being applied to domestic trading in China. Alsoparticipating in the loan were Bank of China, Bank of Communications China (thecollection account bank), Luoyang Commercial Bank and Standard Chartered Bank. Asyndication of this scale to predominantly Chinese banks is quite unique.Explaining the deal, Gilles Sayer at Crédit Agricole in London says: “East Hope hadraised a loan on the structured commodity finance syndicated market in US dollars forwhat was essentially a domestic pre-production finance of alumina with an in-housesmelter acting as offtaker. This exposed the company to currency risks.“In the second half of 2008, CA-CIB offered East Hope the opportunity to diversifytheir source of funding by way of an RMB loan secured by an assignment of an offtakeagreement with EH Baotou, the group smelter, and an assignment of a stand-by offtakecontract with Trafigura Trading Shanghai. The stand-by offtake contract provides theexternalisation of the source of debt service, should it become necessary, by granting theagent an option to trigger this contract.”He adds: “Syndication of the loan was launched at a challenging time with the crisisunravelling, commodity prices dropping, but yet a liquidity tightening in China –remember this was before the mega RMB4 trillion policy boost decided by the PRCgovernment. Notwithstanding the challenges, we successfully closed syndication atRMB900 million.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 109

DEALS OF THE YEARSG and Hansen blow into Chinese marketHansen Wind – ECA-backed financingMLA: Société Générale (SG). Borrower: Hansen Wind Energy Drives (China) Limited. Amount: e66 million ($88million). ECAs: Euler Hermes; ONDD. Tenor: 7-years door-to-door. Lawyers: Allen & Overy – legal adviser to SG.This is a highly unique transaction in the renewable energy sector which sees Europeanwind energy equipment being sold to China under a framework financing agreement.The financing, arranged by Société Générale (SG), sees over 16 European suppliers –mainly German and Belgian – finding a financing route for their exports to buyer andfacility borrower Hansen Wind Energy Drives (China) Limited.The total deal amount is a66 million ($88 million), with a seven-year door-to-doormaturity, in favour of the borrower Hansen Wind Energy Drives (China). Guarantor isHansen Transmissions International. Significantly, the Hansen transaction is one of thefirst ECA-related structures originated in the Chinese market without theintermediation of a local bank. To make this deal happen, SG structured two debtframework agreements with support from the German export credit agency (ECA)Euler Hermes, and support from ONDD, the Belgian ECA.The first was a German foreign debt framework agreement financing the equipmentpurchased from German suppliers. This consists of two tranches: (i) a Euler Hermes 95%covered tranche financing up to 85% of the purchased goods, and (ii) an ‘uncovered’tranche financing the downpayments up to 15% of the purchased goods, in whichONDD has an 80% participation.The second is a foreign debt framework agreement financing the equipment purchasedfrom Belgian and other European suppliers, in which ONDD has an 80% participation.The equipment will serve the growing demand for wind power in China. As part ofthis, Hansen Transmissions International is expanding its production capacity in Chinawith a new plant located in the Tianjin Beichen Hi-Tech Industrial Park. Theproduction started in early 2009 and the plant is expected to reach an annualproduction of 3,000MW by the first half of 2011. The entire integrated plant representsan investment of a131 million. Hansen’s involvement in China is perfectly in line withthe Chinese authorities willingness to expand the use of renewables.Edith Hellemans, managing director – head of export finance Belgium for SGcomments: “To secure the financing of Hansen’s new implantation in Tianjin, SG CIBhas succeeded in overcoming the complex Chinese legal environment by setting up aframe agreement structure. Such a bold arrangement would not have been possiblewithout the support from both ONDD and Hermes, the bank’s local presence in Chinaand the help of the law firm Allen & Overy.” ■110 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARStrong Hermes support for Korean pulpDonghae – ECA-backed financingMLAs: Commerzbank, KfW IPEX-Bank, LBBW and Voith Financial Services. Borrower: Donghae Pulp Company.Amount: e126 million ($168 million). Tenor: 8.5-years. ECA: Euler Hermes. Lawyers: Kim & Chang, Korea. Exporter:Voith Paper, Heidenheim, Germany.This deal is an example of a nimble ECA-financing introduced to a new market.Commerzbank, KfW, LBBW and Voith Financial Services deserve full credit forarranging a debut ECA-backed financing for Korean pulp producer Donghae PulpCompany.The deal financed the construction of the first unique pulp and paper integrated millin Korea. Construction of the project is due to start in June 2011, and once built theplant will produce 450,000 tonnes of paper per year.In total the project is estimated to cost approximately a345 million. Banks begindiscussing the financing with the borrower in May 2009. The long tenor needed for thefinancing prompted banks to persuaded Donghae to use a long-term ECA-covered loan.In total the construction is estimated to take 10.5 years with the ECA-backed financingset at eight years. Banks approached Euler Hermes who agreed to cover a a126 millionloan for the importer to finance the goods and services from Germany’s Voith Paper.The deal financed 85% of the costs for deliveries and services as well as the full cost forEuler Hermes and the capitalised construction period interest on the loan. Donghae has theoption to utilise up to 50% of the loan amount in US dollars.Considering the number of firsts the deal structure was closed fairly quickly. Banksbegin discussing the financing with the borrower in May 2009 and had convincedDonghae to use a long-term ECA-covered loan by June.Commenting on the win Hans-Ulrich Betzoldt at Commerzbank’s corporate bankingstructured export and trade finance division says: “The banks had to meet a very tight timeschedule to achieve financial close after being mandated by the client in June 2009. ECAsupport was requested under the provision to accept as much corporate risk as possible andtherefore reducing in the same amount the requirement of local bank guarantee. Such riskwas to be reflected in the pricing structure dividing between corporate and KDB [KoreaDevelopment Bank] risk which was the subject of intensive discussion with the client. Thereceipt of long-term ECA support was a decisive factor for the client’s investmentdecision.”The loan is set to be repaid in 17 equal and consecutive semi-annual instalments, thefirst of which being due six months after the date of end of the start-up certificate.Stephan Boehlich, MD and head of structured export and trade finance atCommerzbank says: “Without the designation of a formal lead bank the three banksequally shared the responsibility to arrange this financing and worked mostprofessionally to achieve financial closing within an ambitious time schedule, as agreedin the delivery contract to meet the first payment dates with disbursements already fromthis facility, and not make payments from more expensive local bank lines.He adds: “Voith Paper also gave their support necessary when applying Euler-Hermesfor accepting to a certain portion pure Donghae risk without KDB guarantee.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 111

DEALS OF THE YEARBanks swarm to Noble transactionNoble Group – syndicated credit facilityBookrunning MLAs: Agricultural Bank of China; BTMU; China Development Bank; Commerzbank; DBS Bank; HSBC;ING; JP Morgan; RBS; Société Générale; Standard Chartered. Borrower: Noble Group. Amount: $2.4 billion. Tenor: 3tranches: 1-year for $645.2 million, 2-years for $877.4 million and 3-years for $877.4 million.The importance of this mega-loan for Hong-Kong headquartered global commoditytrading and logistics company Noble Group can not be underestimated. The $2.4 billioncorporate facilities raised by the company in this deal demonstrates just how strong thecompany has become and how highly regarded it is by the international bankingcommunity.The loan is the largest completed US dollar syndicated corporate loan in Asia-Pacificin 2009, and the largest ever syndicated facility for Noble. In addition, with a total of 63banks from 26 countries across five continents joining the transaction, of which 32banks were new participants, the deal also reflected Noble’s truly global business profileand illustrates the syndication capabilities of the bookrunning mandated lead arrangers(BMLA) on a global scale.Noble Group’s CEO, Ricardo Leiman comments: “We appreciate this specialrecognition and thank Trade Finance Magazine for their selection of this deal. Thistransaction was a landmark deal for Noble and the unprecedented take-up reflects ourongoing strength as a growing supplier and producer of many of the world’s importantraw materials. It bodes well for Noble’s future fund-raising efforts given our continuingstrong business growth.”BMLAs on the deal were: Agricultural Bank of China, BTMU, China DevelopmentBank, Commerzbank, DBS, HSBC, ING, JP Morgan, RBS, Société Générale, andStandard Chartered Bank.112 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARAdditional MLAs were: AXIS Bank, BES, Santander, Banco do Brasil, BangkokBank, Bank Leumi Le-Israel, Bank Mandiri, Bank Negara Indonesia, Bank Sinopac,Bank of Ayudhya, Bank of China, Bank of East Asia, Bank of Taiwan, Banque Cantonalede Geneve, BNP Paribas, British Arab Commercial Bank, Cathay United Bank, ChangHwa Commercial Bank, China Minsheng Banking Corp, CITIC, Credit Suisse, DZBank, Fifth Third Bancorp, First Gulf Bank, Habib Bank, Hua Nan Commercial Bank,ICBC, Industrial Bank of Taiwan, Intesa Sanpaolo, Jih Sun International Bank, KBC,Land Bank of Taiwan, Lloyds Banking Group, Maybank Investment Bank, MegaInternational Commercial Bank, National Bank of Abu Dhabi, National Bank ofGreece, Natixis, Rabobank, Sal Oppenheim & Cie, Scotia Capital,Taishin Financial,Taiwan Business Bank, UOB, Westpac, Yuanta Commercial Bank, ZuercherKantonalbank.The facility is a $2.4 billion committed revolving credit facility (RCF) with threetranches, $645.2 million over one year, $877.4 million over two years and $877.4 millionover three years. Its purpose at launch was to refinance the $1.2 billion RCF closed inJuly 2007, while adding a new $600 million one year RCF, in order to help tap liquidityfrom new lenders. Thus, the transaction was actually launched to the market at $1.8billion.General syndication was launched on 27 August 2009 by the 10 originalbookrunners (excluding China Development Bank – CDB). Syndication remainedopen for around six weeks. The total facility size was finally increased to $2.4 billion,due to the oversubscription, but no scale-back took place as Noble maximised theliquidity raised.Total commitment from the 10 original bookrunners was $1 billion. A few newlenders came in with big tickets under Noble’s relationship push, mainly CDB ($200million), China Minsheng ($100 million), BAML ($50 million) and Fortis Nederland($50 million), representing 29% of general syndication commitments. Most existinglenders rolled over or upsized their previous commitments. The total commitment fromexisting lenders (other than the original bookrunners) was $591 million, accounting for42% of general syndication commitments.The other new lenders are very diversified, including European banks, Middle Eastbanks, Taiwanese banks and banks from the rest of Asia, and accounting for 29% of thegeneral syndication commitments.A spokesperson for Noble says: “Despite the large bank group, execution, includingdocumentation and signing, was conducted in an effective and seamless manner toensure a timely conclusion of the transaction.”At the time, Noble’s chairman David Eldon commented: “This is an excellent resultfor Noble, a clear sign of the strong institutional interest in our company, and anendorsement of our sound credit fundamentals. The successful conclusion of theserevolving facilities underscores Noble’s access to a diversified capital base and positions uswith the necessary financial support to continue our growth strategy.”Noble’s strategic importance is further enhanced by this highly successful deal. And, itsstrong relations and trading operations with China is further evidenced by the $850million invested in the company in late 2009 by the Chinese sovereign wealth fund,China Investment Corporation, for a 15% stake. This now makes CIC the second largestshareholder in Noble. Significantly, during syndication of this deal, S&P and Moody’supgraded Noble to investment grade. ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 113

DEALS OF THE YEARANZ innovations for Indonesian coalLeighton – ECA-backed lease financingMLA: Australia and New Zealand Banking Group (ANZ). Borrowers: PT Leighton Contractors Indonesia and PT ThiessContractors Indonesia. Amount: $176 million. Tenor: 5-years. ECAs: EFIC. Lawyers: Freehills, for ANZ and EFIC;Clayton Utz, for Leighton; Soemadipradja & Taher (Indonesian advice and document preparation).In this transaction, Australia and New Zealand Banking Group (ANZ) acted as solemandated lead arranger to structure a tailor-made operating lease financing package forAustralia’s Leighton Holdings associated companies and their coal mining operations inIndonesia.The resultant structure is a $176 million export credit agency (ECA) backedoperating lease/lease receivables financing package in favour of PT LeightonContractors Indonesia and PT Thiess Contractors Indonesia. Both companies aresubsidiaries of Leighton Holdings and are involved in contract coal mining operationsin Indonesia, primarily in Kalimantan. The funds are being used to buy miningequipment from Germany and the USA. The deal, supported by indemnity fromLeighton Holdings, was signed in late January 2009.The structure is quite unusual as very few ECAs are supporting operating leasestructures outside of the aircraft sector. It also provided a listed Australian corporatewith access to credit capacity and liquidity for its offshore operations at the height ofthe global financial crisis. It was the first lease finance in Indonesia for EFIC, theAustralian ECA, which is covering 85% of the lease financing.In a number of ways the transaction can be seen as an innovative application of114 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARexport finance. For instance, the collaboration between ANZ and EFIC produces a dealstructure incorporating credit and liquidity support from EFIC. The structure couldalso be taken to be applied in other sectors and jurisdictions.The groundwork for the deal started back in mid-2008 when ANZ’s relationshipteam worked with Leighton Holdings to arrange equipment finance for the twoIndonesian subsidiaries, helping the company expand its Indonesian contract miningoperations.Leasing is Leighton’s preferred financing method in Indonesia, and ANZ’s structuredasset and export finance team has extensive knowledge and experience in working inIndonesia, having previously arranged facilities for a range of companies.A European bank that had previously partnered with ANZ withdrew from a fundedparticipation in September 2008 due to the Lehman Brothers collapse and marketconditions, thus leaving a hole in a proposed financing. Credit and liquidity capacitywere severely constrained in the face of the global financial crisis, and some foreignbanks that had previously been active in Australia were retreating to their homemarkets.As such, ANZ and Leighton approached EFIC to fill a market gap and to support theequipment financing proposal. The basic rationale for EFIC support was that therewould be an export of mining services to Indonesia – proceeds of financing would beapplied to equipment leasing for carrying out mining contracts.To deliver the necessary lease product to Leighton’s Indonesian subsidiaries, ANZarranged a licensed Indonesian lessor to front the leases, with ANZ purchasing the leasereceivables. EFIC provided a loan to support the receivables purchase. In addition to thisVAT uncertainty associated with Indonesian sale and leaseback transactions meant ANZhad to work with equipment suppliers and the lessees to ensure title transferred directlyto the lessor.ANZ global head of structured export finance Paul Richards comments: “This istruly a landmark transaction – utilising export financing for equipment procurementworking in developing countries on the basis of an export of mining contractingservices. Our insight into the customer and their requirements, our relationship withEFIC and our ability to partner with each were critical to the transaction’s success. TheLeighton Group is a longstanding ANZ customer and we’re delighted to havesupported the company with such an innovative solution at what was a very difficulttime in the market.”A spokesperson for EFIC states: “EFIC has a long-standing relationship with theLeighton Group and was delighted to be able to support the company in this importanttransaction. Constricted credit markets during the GFC [global financial crisis] ledEFIC to look more closely at how it might execute its mandate to support Australianexporting activity.“Against a background of reduced demand for classic buyer finance transactions, wehave focused our attention on structured transactions such as this where we support thecontracting services performed overseas, and on the working capital needs of Australiancompanies in Australia where they are engaged in the exporting chain.”The spokesperson concludes: “EFIC complements rather than replaces privatemarket capacity and working with strong relationship banks, such as ANZ, provides apowerful solution for export oriented financing requirements.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 115

DEALS OF THE YEARA breakthrough for Chinese shippingTORM – ECA-backed financingMLAs: Bank of China; Société Générale. Borrower: TORM A/S; TORM Singapore. Amount: $167.3 million. Tenor: 10-years post delivery. ECA: Sinosure. Lawyers: White & Case (lenders). Shipbuilder: China State ShipbuildingCorporation Group.This deal is a breakthrough in the shipping industry for Chinese export credit insurerSinosure, and a breakthrough in supporting Chinese shipbuilding export market as well.A number of factors stand out. The financing structure includes Sinosure credit andcommercial credit, which is more flexible to the borrower and lender. The deal alsocultivates a close relationship between Bank of China (BoC), Sinosure and Danishshipping company TORM. In addition, in the Chinese market it is the first timeSinosure has lent to a foreign ship owner to support the exports of China StateShipbuilding Corporation (CSSC), the largest shipyard in China and a key client ofBank of China.BoC and Société Générale (SG CIB) acted as mandated lead arrangers on the dealwith SG CIB also acting as coordinating bank, Sinosure agent, commercial agent andhedging bank. Together they arranged a $167.3 million co-financing, consisting 50% ofa Sinosure buyer credit and 50% of an uncovered commercial loan. The post deliveryship financing represents 60% of the total shipbuilding contract price of six newmedium range product tankers. The financing has a 10-year tenor post delivery. TheSinosure buyer credit benefits from 95% comprehensive cover and the whole financingbenefits from the standard shipping security package (mortgages of the vessels,insurances assignment, and earnings assignment).TORM Denmark is guaranteeing the borrower, its subsidiary, TORM Singapore.The tankers are being built at Guangzhou Shipyard International Company, part of theChina State Shipbuilding Corporation Group.A spokesperson for TORM in Singapore says: “This deal is an excellent example ofthe combination of export credit finance and commercial finance in the Chinesemarket. Through comprehensive communication, lenders, borrower and Sinosurequickly reached an agreement on the financing structure which is flexible to all parties.For the borrower, the financing problem is solved with comparatively low cost offunding. For the exporter, Bank of China supports its business with competitivefinancial service.”Representing SG CIB, Valérie Mace, director of multisource, and Isabelle Deng,managing director and head of export finance China, comment: “SG’s reputation as worldleader in arranging export finance, and notably Chinese export finance, combined with SGexpertise in structuring complex shipping finance made the difference to win the mandatewith this strategic client. The very close and trusting relationship developed with Bank ofChina, and the strong support from Sinosure, were key to achieving the successful closing ofthis very cost effective deal for the benefit of TORM A/S.” ■116 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARA landmark for ship financePacific International – ECA-backed financeMLA: Bank of China. Borrower: Pacific Ship Investment Limited. Amount: $517 million. Tenor: 10-years afterdrawdown. ECAs: Sinosure. Insurers: Jardine Lloyd Thompson; The Britannia Steam Ship Insurance Association; TheStandard Steamship Owners’ Protection and Indemnity Association (Asia); The North of England Protecting andIndemnity Association. Lawyers: Stephenson Harwood. Builder/exporter: Dalian Shipbuilding Industry Company.This Bank of China-arranged Sinosure buyer credit for Singapore’s Pacific InternationalLines (PIL) is a landmark transaction for both the global shipping finance market andthe Chinese export credit market.The deal is innovative in that it utilises a lease financing structure for both the preandpost-delivery financing. It was also the first time Sinosure’s foreign leasing insurancewas applied to a ship financing, creating a new model for asset-based vessel financing.Bank of China (BoC) worked closely with Sinosure in structuring the term loan for14 container ships from Dalian Shipbuilding Industry Company for PIL, the secondlargest shipping operator based in South-East Asia and among the top 20 container shipoperators in the world.The post-delivery facility is for $100 million and the pre- and post-delivery facility isfor $417 million. On both the borrower is listed as Pacific Ship Investment, and bothhave Sinosure insurance covering 95% for political and commercial risks, tenors of 10years after drawdown, and unconditional and irrevocable guarantees from PIL.BoC provided key structuring support to PIL and developed a careful balance in termsof pricing and structure to the best possible terms during the shipping market recession.The provision of the $517 million facility to a single containership operator showedsignificant confidence in the industry.A spokesperson for Pacific International Lines comments: “During the wholeprocess, Bank of China, Sinosure and PIL, with the assistance of Stephenson Harwood,worked as a real team to achieve the ultimate goal – BOC alone to provide $519million with Sinosure’s insurance when the container ship industry was experiencing agreat recession. In addition to several months’ constant hard work, each partyconsidered each problem from the perspective of the overall project and thus waswilling to compromise which was the key success factor in this project.“The design of the facility structure to contain both post-delivery finance and predeliverynot only observed the relevant principles of the People’s Bank of China’s rigidsupervision, but also shows great flexibility. Exercising Sinosure’s foreign leasinginsurance on the pre-delivery facility also greatly reduced the cost of the facility.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 117

DEALS OF THE YEARDB lift for Vietnamese rice exporterVinafood – accounts receivable financingArranger: Deutsche Bank. Loan volume: e84 million. Client: Vietnam Southern Food Corporation (Vinafood II).Tenor: 180 days.In April 2009, Deutsche Bank (DB) structured an a84 million ($112 million) nonrecoursediscounted export bills facility for Vietnam’s Vinafood II’s rice export contractwith the National Food Authority of Philippines (NFA). The deal was a triumph forDeutsche Bank, Vinafood II, and the NFA as it not only secured the vital supply of rice,but it was also the first ever without recourse deal for Vinafood II.As a Vietnamese state-owned enterprise for food trading, Vinafood II, the biggest riceexporter in Vietnam, has a number of local banking relationships and ample creditfacilities with local banks. The local banks support Vinafood II’s local financing needs viaan export bill discount with full recourse. Vinafood II was mandated by the NFA toexport 1.5 million metric tonnes of rice, with payment terms of documents againstacceptance (DA) of 180 days.But under under a new Vietnamese government directive, Vinafood II had to find away to discount the DA bills on a non-recourse or limited recourse basis with a selectedinternational bank, as local banks are unable to do so due to their limited offshorenetwork. Addressing the client’s needs, Deutsche Bank, using its network in Vietnamand Philippines, delivered to Vinafood II a 180 day non-recourse discount export bill ofapproximately a84 million which was partially backed by credit insurance, and therebymitigated Vinafood II’s risk.NFA pre-arranged part of the import financing with two of its local banks andemployed Deutsche Bank Philippines to provide the rest of the financing through trustreceipt loans to settle against NFA’s discounted bills upon maturity. Thanks tocollaboration between Deutsche Bank Vietnam and the Philippines, Deutsche BankPhilippines also acted as the collecting agent for Deutsche Bank Vietnam, enablingbetter control over document flow and improved risk mitigation measures. Byleveraging its Philippines office, Deutsche Bank was able to play a dual role insupporting the client’s request and deliver a tailor made risk-free solution within a tighttimeframe.Commenting on the deal, Roger Packham, regional trade finance head for DeutscheBank in Asia-Pacific, states: “This deal was significant because it was the first withoutrecourse deal for Vinafood II in Vietnam. The buyer was looking for longer credit termsat the height of the global financial crisis. Given the sizeable financing requirement themajor challenge was to be able to secure credit insurance at a time when theunderwriting market was very tight against the backdrop of the ongoing financialturmoil.“The team managed to source a highly rated insurance company to cover 90%payment and political risks, and was also able to fix the discount rate against the upwardtrend of rising US dollar cost of funds at that time. Deutsche Bank was able to leverage itsextensive international network by banking both sides of the transaction. We also usedour robust financial standing and strong trade financing expertise to deliver a bespokeaccounts receivable facility for the client. This reflects our commitment to the region andclient focused approach in delivering best-in-class solutions.” ■118 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARSustaining the financing lineAP Macao – pre-payment facilityMLAs: WestLB; Credit Suisse. Borrower: AP Enterprises (Macao). Amount: $300 million. Tenor: 4-years. Lawyers:Wong Partnership.Given the global economic conditions of last year, the coordinating mandated leadarranger and bookrunner in this transaction – WestLB – did a remarkable job instructuring a $300 million financing facility for Asian pulp producer AP Enterprises (APMacao). The financing displays unique structural features and strong covenants.This deal structure is a combination of structured commodity finance with a prepaymentfacility for four years, and a commodity trade finance feature that captures acontinuous annual export trade flow of a minimum of 825,000 tonnes of pulp annually.The entire pre-payment financing is supported by the world class annual pulpproduction capacity of 1.4 million tons from Indonesia’s PT Riau Andalan Pulp &Paper, a company owned by the same borrower’s group. The entire cashflow fromexport sales/proceeds is available for first priority repayments to the lending group asand when needed.Joining the facility as an additional MLA is Credit Suisse International. Leadarrangers involved are: CITIC Ka Wah Bank and Fubon Bank (Hong Kong). WingLung Bank is acting as arranger. Senior managers are: Industrial and Commercial Bankof China, Bank of Taiwan and Taiwan Business Bank (Hong Kong branch).With the plant being located in Indonesia it enjoys the natural competitive advantagesresulting in sustainable low cash operating costs. To ensure business sustainability, theborrower group procures all wood-chip feedstock from their own timber plantations whichare sufficient to support the plant capacity. And given the geographical proximity to thegrowth engines of China and India, the borrower has commercial advantages over otherpulp producers in Latin America.At a time when project sustainability and conservation are very much under thespotlight, it is worth noting that the borrower group adopts the highest standards inconservation, sustainability and environmental global practices. It produces biennialsustainability reports audited by international bodies. It also works actively inpartnerships with responsible NGOs such as WWF.At WestLB in Singapore, Mark Low, managing director, corporates and structuredfinance, commodity finance, Asia-Pacific, states: “This refinancing has proven to be highlyresilient to market conditions. Within the financing structure there is a unique standbycommercial contract feature arranged by WestLB which will permit a standby buyer tostep-in on behalf of the borrower to take delivery of physical pulp if the need arises.Despite difficult market conditions, there was no shortage of interested bankcounterparties to participate, which were invited on a selective basis. Some of the riskparticipants in this deal are new banking counterparties for the borrowing group. Thistransaction itself is a clear sign that workable and resilient financing structures, which worksmoothly during economic downturns, are appreciated as high value-added financing formajor business groups.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 119

DEALS OF THE YEARKorea inks Vietnamese paper dealAn Hoa Paper – ECA-backed financingMLAs: Crédit Agricole, BNP Paribas, Natixis. Borrower: An Hoa Paper. Amount: $144 million Korean export credit$21.9 million commercial loan. Tenor: 10-year KEIC loan, 5-year commercial loan. ECAs: KEIC.This was an impressive deal that salutes the joint efforts of three French banks toarrange the first KEIC-backed project financing for a Vietnamese corporate.Korean exporter Hansol EME won the contract to build the factory and Korea’sstate-run export insurer, Korea Export Insurance Corporaton. (KEIC) agreed to offer a$144 million export credit with a 30-month grace period and a ten-year cover. Thethree banks agreed to sign a $21.9 million five-year commercial loan with a 30-monthgrace period.The project has benefited from having the full support of the Vietnamese authorities.Philippe Massiani, director, export finance Asia at Crédit Agricole, comments: “The AnHoa Paper Project is a priority project for the government of Vietnam which wants todevelop its domestic pulp and paper industry in the country and reduce the reliance onimports.“The three collaborating MLAs needed to be aware of both the private and thepublic angles of the financing. An Hoa Paper belongs to a private group of companiesbut both aspect of the deal, the tied commercial loan and the Korean export creditfacility, were guaranteed by the Ministry of Finance of the Socialist Republic ofVietnam.”The involvement of the Ministry of Finance resulted in a long and tight negotiationbut ultimately the deal was a resounding success for all parties. Commenting on the dealLeopoldine Fron, vice-president export finance transaction group at BNP Paribas(BNPP) explains: “The Vietnam government promotes the industrial development of thecountry through various instruments including the support of key projects implementedby small and medium enterprises. We are glad to have been able to arrange thisfinancing.”The three French banks, Crédit Agricole, BNP Paribas, Natixis, deserve fullrecognition for arranging a new first within export credit agency financing but alsohaving a proven ability to work together to offer a genuinely competitive package. Thisdeal is a testament to a successful partnership between the three different export financedepartments in those banks.Celebrating its win LE Phan Hoai Nam, BNP Paribas’ head of E&C, asset andproject finance for Vietnam says: “This project is the fourth ECA financing and thesecond Deal of the Year for this Group awarded by Trade Finance Magazine in the lastfive years. BNPP is glad to be MLA in both awarded-deals the first one (Thang LongCement plant) was dated in 2004!” ■120 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARStrong structure gives roots for growthApical – borrowing-base facilityMLA: WestLB. Borrower: AAA Oils & Fats (Singapore); Global Advance Oils & Fats (Macao). Amount: $125 million(debt) $151 million (equity). Tenor: 2-years. Lawyers: Rajah & Tan.Within this transaction, WestLB’s Asia-Pacific commodity finance team based inSingapore structured a seamless borrowing-base facility for two trading companiesinvolved in trading oils and fats – namely, AAA Oils & Fats (Singapore) and GlobalAdvance Oils & Fats (Macao), both part of the Apical group. The facility is unique, andwell-structured on a transactional basis with Basel II compliant securities.WestLB is acting as the sole mandated lead arranger to structure on a club basis up to$125 million with a ‘green-shoe option’, a two-year committed commodity tradefinance-secured revolving borrowing-base facility for the two companies.It is a secured facility which will be used strictly to procure commodities (vegetableoils and fats) for temporary custody in tanks, transit, and with an identifiable source ofrepayment from corresponding export receivables under letters of credit/documentarycollections through banking channels pledged to the security agent.The tight structure is secured by a borrowing-base for 125% of outstandings, plus acorporate guarantee from strong parentage, coupled with strong daily market valuationand top-up mechanisms. Participants in the deal include Taishin International Bank aslead arranger, and Taiwan Shin Kong Commercial Bank as arranger.Commenting on the deal, Mark Low, managing director, corporates and structuredfinance, commodity finance, Asia-Pacific, at WestLB in Singapore, says: “This financing is aunique Basel II compliant financing structure within the region, making it a highlyremunerative financing for all participating lenders especially in evolving market conditionswhere proper scarce capital allocation are a priority. The borrowing group committed andworked closely with WestLB as sole arranger and structurer with full appreciation andunderstanding of the requirements for a Basel II compliant financing structure in terms ofsecurity, control and business purposes.”He adds: “For Apical group, they are not only dealing with a bank like WestLB whichis committed to the regional commodity finance business, but also with a team ofcompetent commodity finance professionals with an in-depth understanding of theentire edible oils value chain business activities from originating plantations to the finalconsumer. This remunerative financing structure has enabled the group to attractexisting lenders and add new regional lenders for the group while it expands its totalbusiness activities in the three major growth markets of Indonesia, China and India. It isa clear win-win-win financing structure in 2009 for the Apical group, it’s majorsupplying counterparties and all lenders engaged.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 121

DEALS OF THE YEARRemoving FX exposure in VietnamNokia/Viettel – LC confirmationConfirmer: JP Morgan. Issuer: Bank for Investment and Development of Vietnam. Borrower: Viettel Corporation.Amount: Two export LCs for $9.6 million and $7.2 million. Tenor: Sight and Usance.JP Morgan picks up this award for creating a flexible financing that helped cement itsrelationship with its borrower as well as provide it with a secured export solution.In October last year Vietnam’s leading telecom operator Viettel agreed with NokiaSiemens Networks (NSN) to acquire its turnkey network solution. The two telecomoperators agreed the sale through an exporter letter of credit but under the strictures ofNokia’s credit and risk policy the letter of credit (LC) needed a bank to confirm thepayment.When the deal was being discussed Vietnam faced a US dollar liquidity crunchwhich caused concern as to whether payment to NSN might then be delayed. Toovercome this NSN agreed to use a euro-based payment currency.JP Morgan agreed to confirm the US dollar LC to allow the deal to close and offeredtwo export letters of credit for $9.6 million and $7.2 million. JP Morgan agreed tointroduce some flexibility into the transaction and reimburse the deal in either Euros ordollars on the due date.JP Morgan also succeeded in limiting its FX exposure under the LC throughretaining a portion of the export proceeds under each payment presentation.Sofarianty Agustin, MD, global trade sales Asia at JP Morgan states: “This US dollardenominatedLC has a clause stating that the LC can be paid out in euros by having theapplicant giving prior notice to beneficiary. However, given that JP Morgan hasconfirmed a US dollar LC, this means that our payment obligation is in US dollar andnot euros. This resulted in a FX risk exposure to JP Morgan as the confirming bank.“To eliminate this FX exposure, we worked with NSN and received an agreement thatNSN will bear all FX loss (vice versa, any FX gain will be given back to them) relating tothe LC. In addition, NSN will also allow JP Morgan to retain a portion amount for thoseusance payment to be made on maturity date (as a confirming bank, JP Morgan must payon maturity date, prior to receiving fund from the issuing bank). This solution would alsoallow JP Morgan to use this retained amount to offset any FX loss, if the issuing bankremits euro payment to JP Morgan instead of US dollars.”This deal showed considerable innovation in offering a multi-currency letter ofcredit financing with a structured element to remove any FX exposure and offering JPMorgan additional security. ■122 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARRinging success for IndonesiaTelkomsel – ECA-backed financingMLAs: RBS/ABN AMRO and Standard Chartered Bank. Borrower: Telekomunikasi Selular (Telkomsel). Amount: $318million. Tenor: 6-years. ECAs: EKN, AB SEK. Exporter: Ericsson, PT Ericsson Indonesia. Lawyers: Linklaters Allen &Gledhill; Hadiputranto, Hadinoto & Partners; Advokatfirman Vinge.This deal celebrates the first ECA transaction done for leading Indonesian telecomsfirm Telkomsel since 2002 and used the experience of two well-established exportfinance teams to conclude an award-winning transaction.Telkomsel approached the banks in the summer to arrange a $318 million seniorcredit facility to back a buyer credit financing for the import of equipment andservices from Ericsson in Sweden and PT Ericsson Indonesia. Telkomsel needed thefinancing to expand its 2G and 3G network.What was particularly impressive about the deal was the relatively quick timetablewith which the two mandated lead arrangers, Standard Chartered and RBS, took toarrange the financing before the end of the year.The banks approached Swedish export credit guarantee department EKN whoagreed to back the deal while Swedish Export Credit Corporation (SEK) agreed tofinance the deal for the full amount. EKN covered 95% of the deal with the twobanks sharing the remaining credit exposure.Speaking to Trade Finance, Lena Bertilsson, Nordic head of secured debt marketscomments: “We got the mandate at the end of the summer and we then closed beforethe end of the year, so in that sense it was a relatively quick. The market is stillrecovering and therefore more traditional ECA financing has become attractive forthe stronger corporates. Telkomsel, for example, is a market leader in Indonesia. Thetransaction was arranged by the two banks and EKN agreed to offer cover. SEKprovided 100% of the funding but the deal was structured and the credit exposurethen shared between EKN, RBS and Standard Chartered.” The deal signed at the endof December 2009 and is a good example of a strong corporate returning to the useexport credit agency financing.Bertilsson adds: “The Telkomsel transaction benefited from excellent team workfrom our Nordic and Asian teams, as well as support from our partner banks, StandardChartered Bank, EKN and SEK, which allowed a smooth and quick execution.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 123

DEALS OF THE YEARPNG LNG record breakerPNG LNG – ECA-backed project financingMLAs: ANZ; BNP Paribas; BTMU; CBA; China Development Bank; CIC; Crédit Agricole; DnB NOR Bank; IntesaSanpaolo; Mizuho Corporate Bank, NAB; Natixis, SMBC; Société Générale; Standard Chartered Bank; UniCredit;Westpac. Borrower: PNG LNG Finance. Amount: Commercial debt = $1.95 billion; ECA debt = $8.3 billion (US-Exim$3 billion; Sace $1.85 billion; JBIC $1.8 billion; China-Exim $1.3 billion. EFIC $350 million). ECAs: China-Exim; EFIC;JBIC; Nexi; Sace; US Ex-Im. Tenor: 15-years. Sponsors: ExxonMobil; Oil Search; Santos; PNG government; Nippon OilCorp; PNG landowners through Mineral Resources Development Company and Petromin PNG Holdings. Financialadviser to the sponsors: Société Générale. Lawyers: Latham & Watkins, Blake Dawson – to lenders; Sullivan &Cromwell; Latham & Watkins, Blake Dawson – to ECAs and DFIs; Allens Arthur Robinson – to sponsors. Status:Signed 15 December, 2009. Financial close March 2010.The Papua New Guinea liquefied natural gas (PNG LNG) project is the largest energydevelopment seen in Asia-Pacific involving so many export credit agencies (ECAs) withcommitted funds and commercial banks taking on the commercial debt portion. Theoverall $13 billion project debt taps a diverse set of funding sources including both tiedand untied ECA funding, a 17-strong club of commercial banks as well as sponsor cofinancing.The funds will finance a 6.6 million tonnes-per-year LNG facility in Papua NewGuinea, and 724km of onshore and offshore pipelines, as well as upstream developmentand the associated infrastructure.Esso Highlands, an ExxonMobil wholly-owned subsidiary, is the project operator,and is leading the construction and LNG marketing sides of the project. Sponsors areExxonMobil (33.2%), Oil Search (29%), Santos (13.5%), the PNG government (16.6%),124 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARNippon Oil Corp (4.7%), PNG landowners through Mineral Resources DevelopmentCompany (2.8%) and Petromin PNG Holdings (0.2%). Offtakers are Tokyo ElectricPower Company and Osaka Gas, CPC Corp of Taiwan and China Petroleum &Chemical Corporation.The ECAs are providing guarantees/insurance and/or direct loans. The amountsinvolved are unprecedented. US Ex-Im is providing $3 billion, JBIC $1.8 billion,Australia’s EFIC $350 million, Italy’s Sace $1.85 billion and China Exim $1.3 billion.ExxonMobil will co-lend $3.75 billion, which is distributed across the facilities on a prorata basis, following the terms of each facility.The $3 billion being provided by US Ex-Im is that agency’s largest ever transaction.Société Générale is acting as the US Ex-Im agent.The $1.95 billion commercial loan benefits from a 100% political risk insurance fromJapan’s Nexi, which is also covering 97.5% of commercial risk on $950 million of thedebt, the remainder being taken by the banks.Bank loans are being provided by National Australia Bank (NAB), Australia and NewZealand Banking Group (ANZ), Westpac, Commonwealth Bank of Australia (CBA),Bank of Tokyo Mitsubishi UFJ (BTMU), Sumitomo Mitsui Banking Corp (SMBC),BNP Paribas, Crédit Agricole, China Development Bank, Credit Industriel etCommercial (CIC), DnB NOR Bank, Intesa Sanpaolo, Mizuho Corporate Bank,Natixis, Société Générale, Standard Chartered Bank and UniCredit.The loan has a 15-year tenor and pricing starting at 325bp over Libor, rising to400bp after the 4.5-year construction period and stepping up to 425bp between yearsnine and 15. The commercial loan was heavily oversubscribed, despite the difficultfinancial environment. Final allocations on the commercial portion range from $50million to just over $200 million, with the majority of tickets in the $75 million to $150million range. Banks have been attracted to the deal by the large scale involvement ofthe ECAs, as well as the unprecedented participation of Chinese institutions in aninternational LNG project.The deal features a well-developed commercial structure designed to ensure aworkable risk-sharing mechanism between project sponsors and lenders. On one hand,in order to cover construction/completion risk, the sponsor group has provided acompletion guarantee that works in such a way that stronger members of the group thatare unlikely to default can cover those who may be in danger of doing so. Offtake risk isunderstood as being well hedged due to the diversity of the offtake group. In addition,Exxon’s central presence on the deal has been seen from the start of the process asmitigating any possible operation risk.Commenting on the project, Steven Kane, chairman of the PNG LNG financecommittee at ExxonMobil, says: “The project meets the capital and operatingperformance requirements of the international lending community, and the significantlender commitment we obtained also validates the project’s compliance with thehighest standards for health, safety, environmental and social safeguards. With the hardwork and dedication of external counsels, advisers and ExxonMobil’s finance andproject teams, we were able to successfully negotiate this complex transaction and signloans for a record amount in energy project finance, in a record timeframe in one of themost difficult financial market periods in recent decades.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 125

DEALS OF THE YEARChinese made package to IndonesiaPersero – ECA-backed financingMLA: Bank of China. Borrower: PT PLN (Persero). Amount: $455 million. ECA: Sinosure. Tenor: 10-years. EPCcontractor: Dong Fang Electric Corporation.This high-value transaction is a landmark as a fine example of the export of Chinesemanufactured equipment in a deal led by a Chinese bank – namely, Bank of China –with participating international banks. It is also one of the largest deals ever done in theChinese loan syndication and export credit markets, as well as being one of the biggesttrade transactions in Indonesia in recent years, and the largest in 2009.The financing is a $455 million export credit in favour of the borrower, PT PLN(Persero), the largest Indonesian electricity generating and transmission company. Theexport credit is covered by Sinosure, the Chinese export credit insurer.Bank of China (BoC) acted as mandated lead arranger, facility agent and solebookrunner. In order to win the mandate, BoC had to competed with Chinese policybanks – CDB and China-Exim, Chinese commercial banks (ICBC, CCB and CITIC),and several internationally active banks.The transaction entered general syndication in May 2009. BNP Paribas (BNPP) andSociété Générale (SG) joined the deal in syndication. Final takes saw Bank of ChinaJakarta branch with $191 million, Bank of China Sichuan branch with $191 millionand BNPP and SG each with allocations of $36.4 million.Sinosure is providing insurance covering 95% of political and commercial risks.There is also an unconditional and irrevocable guarantee from the Ministry of Financeof Indonesia, which by all accounts required intensive negotiations to secure with theIndonesian authorities and an adjustment to existing guidelines to gain approval.A spokesperson at BoC says: “In this transaction we provided key structuring andunderwriting support to PLN and developed a careful balance in terms of pricing andstructure to the best possible terms during the credit crunch.“The financing required the involvement of the loan syndication and export creditdeal teams with best expertise and intelligence, and there was seamless cooperationbetween Beijing and Jakarta.” The financing supports PLN’s construction of a 3x315MW coal-fired power plant in Teluk Naga located in Banten. China’s Dong FangElectric Corporation is the EPC contractor. The plant, which is part of the Indonesian‘fast-track programme’ designed to eliminate power shortages, will be in operation in2011. The contract is part of an extensive programme for Chinese companies entitled‘going abroad’ where they are supported by Chinese banks. The commercial contract andfinancing is a high-profile transaction in Chinese-Indonesian relations.The contract is a vital one for Dong Fang Corp, as the company sufferedconsiderable damage to its plants in Sichuan through the earthquake there in May2008. Mr Li, Dong Fang’s chief representative in its Indonesian office, states: “Thesigning of this loan agreement, together with other supports, enables us to recoversooner from the damage caused by the earthquake disaster.” ■126 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARFlagship investment in VietnamPetrovietnam – ECA-backed financingMLAs: BNP Paribas, Crédit Agricole, HSBC. Borrower: Petrovietnam. Amount: $145.7 million. ECA: KEIC. Tenor: 8.5-years door-to-door, including 12 months drawdown. Exporter: Hyundai Engineering Company. Legal counsel: Leadco,Lee & Ko.Significantly, this is the first KEIC supported loan in Vietnam. This transaction, for theconstruction of the 150 thousand tonnes per annum polypropylene Dung Quat Refinerycomplex, receives full support from Korea’s export credit agency (ECA), Korean ExportInsurance Corporation (KEIC).This is the first refinery to be built in Vietnam. It is the flagship infrastructureinvestment project in the central-Vietnam area and the leading tool for the government’sefforts to rebalance economic development across the country.The polypropylene plant requires a total investment of $234 million of which thevalue of the engineering, procurement and construction contract amounts to nearly$175 million. The contract has been awarded by Petrovietnam to a consortium ofcontractors led by Hyundai Engineering Company.Petrovietnam received a $20 million loan from local banks to develop the plant inApril 2009 while the remaining loan of $145.7 million was arranged by the threeinternational banks, BNP Paribas, Calyon (now Credit Agricole) and HSBC, with BNPParibas acting as facility agentThe amortising term loan facility maintains a single tranche with a floating rate.Through the reimbursement structure, the drawdowns are made in reimbursement ofcash costs already incurred by Petrovietnam.On top of a guarantee from Vietnam’s Ministry of Finance, this 8.5-year loan is also100% covered by KEIC. Chol Han Jong, head of KEIC, comments: “The Dung QuatProject is a very successful arrangement of Korean export finance for an industrialproject in Vietnam. Given that KEIC has signed an MoU with Geleximco who is amajor sponsor of this project, I’m pretty sure there will be more big opportunities inutilizing Korean export finance in relevant projects in Vietnam.”This financing is a breakthrough for ECA financing as state-owned Petrovietnamalone accounts for nearly 20% of Vietnam’s GDP and contributes to 30% of the nationalbudget. Moreover, this ECA backed financing will offer a diversification of funds forPetrovietnam.Le Phan Hoai Nam, head of energy and commodities, project and asset financing,BNP Paribas, comments: “As agent and MLA we are glad to have signed withPetrovietnam the first KEIC-supported loan in Vietnam.” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 127

DEALS OF THE YEARAgencies power up in PakistanNorthern Power – ECA-backed financingMLAs: BNP Paribas, China Exim, CIC France, HSBC. Borrower: Northern Power Generation Company (NPGCL).Amount: $250 million. ECAs: Coface, Sinosure. Tenor: 13-years door-to-door for the Sinosure loan. 15-years door-todoorfor the Coface loan. Legal counsel: Norton Rose; Org Dignam.This landmark transaction for Northern Power Generation Company (NPGCL) gainsgreat attention from both the Chinese and Pakistani governments. Not only is it one ofthe few major financings in Pakistan during the recent financial turbulence, but this dealrepresents the first time that the Export Import Bank of China (China Exim) hascooperated with non-Chinese banks under Sinosure cover.BNP Paribas (BNPP) and HSBC were the initial MLAs arranging $250 million ofCoface and Sinosure financing for the Northan Power 450MW Nandipur PowerProject, Pakistan. The EPC contactor for the project is Dongfang Electric Company ofChina, with gas turbines being supplied by General Electric (GE).The funds will be used to finance the construction of a 425MW combined cyclepower project at Nandipur in Pakistan, estimated to cost $329 million.Sinosure is covering $140 million and a6.6 million of the financing, which is 85% ofthe EPC contract price. France’s export credit agency Companie Française d’Assurancedu Commerce Exterieur (Coface) is covering a69 million of the financing which is85% of the GE Turbines Contract price and 100% of the Coface premium.China Exim, as mandated lead arranger, joined BNPP and HSBC in signing thefacility with NPGCL, and CIC France also joined the consortium through aparticipation agreement with BNPP.The tenor for the Sinosure loan is 13-years door-to-door with a three-year drawingperiod and a ten-year repayment period. The tenor for the for the Coface loan is 15-years door-to-door with a three year drawing period and a 12-year repayment period.This is the second cooperation between Sinosure and Coface with both of the ECA’sinsurance policies covering 95% of political and commercial risk. The Pakistan Ministryof Finance provides a full guarantee.It is a testament to the commitment of all the banks in both of the ECA facilities, andto the leadership of both BNPP and HSBC that the financing was successfullyconcluded despite the risk profile of Pakistan.This successful approach by the ECAs has placed the government of Pakistan in arobust position to avail itself of further similar facilities in the future. ■128 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DEALS OF THE YEARMaking hydro power waves in BhutanDagachhu – ECA-backed financingMLA: RZB. Borrower: Dagachhu Hydro-electric Power Plant. Amount: e41.2 million. ECA: OeKB. Tenor: 15-years. Legalcounsel: RZB – in-house; Office of the Attorney General – Bhutan. Eqpt exporters: Alstom Hydro Austria and AndritzHydro.Few big trade deals come to the market in Bhutan, so when they do as in the case of thishydro-power financing by Austrian bank Raiffeisen Zentralbank Österreich (RZB), itinvariably sets some kind of benchmark. Continuing the economic cooperation betweenAustria and Bhutan, this deal helps to foster clean energy development, enhance crossbordercooperation between India and Bhutan and highlight possibilities for futureinvestments in the energy sector.This financing secures the construction, operation and maintenance of the DagachhuHydro-electric Power Plant in the Kingdom of Bhutan. The power plant will reach acapacity of approximately 124 megawatts of clean energy for exports to India and isexpected to be completed and put into operation by 2012.“We are happy to foster clean energy development in Bhutan and help to improvethe living standards of nearly 9000 rural power consumers in India,” states Karl Sevelda,member of the managing board of Austria’s RZB.The Dagachhu hydro power plant will cost approximately $201.5 million, to be split60:40 between debt and equity. RZB is financing the delivery of electrical andmechanical equipment with a total of a41.2 Million ($55.5 million).Asian Development Bank (ADB) is providing a $51 million loan from its ordinarycapital resources with a further $29 million loan from the Asian Development Fund(ADF) under the Green Power Development Project. An additional $45 million offinancing is coming from the government of Bhutan with the Indian Tata PowerCompany providing $21 million.The long 15-year tenor of RZB’s long-term loan based on a fixed interest rate isbroken down into 24 equal consecutive semi-annual repayment instalments, starting sixmonths after the acceptance of the certificate until January 2025.Political and commercial risk is covered by the Ministry of Finance on behalf of theRepublic of Austria through Austria’s export credit agency OesterreichischeKontrollbank (OeKB) and refinancing also by OeKB.The project will help tap the country’s under-utilised hydropower resources andincrease government revenues for development spending.Sevelda continues: “It was quite a challenge to offer such a long-term financing toour client at the peak of the financial crisis but together with the Austrian Ministry ofFinance and Austrian ECA, Oesterreichische Kontrollbank, we managed to succeed!” ■TRADE FINANCE The Guide to Global Trade Finance Markets 2011 129

DEALS OF THE YEARConfirming Pakistani excellenceHubco & MAN – export LCLC confirmer: Citi. LC issuer: Habib Bank (HBL). Borrower: The Hub Power Company (Hubco). Amount: $100 millionLC/ $65 million confirmation amount. Tenor: 10 months. DFI: IFC. Equipment supplier: MAN Diesel.This deal is an excellent example of innovative financing which leveraged the use of aDFI to secure much needed financing in a difficult geography.Citi not only managed to reduce its exposure on a key letter of credit (LC)confirmation but also kept both the borrower and exporter happy in a nationallystrategic financing.Hubco is a publicly owned company that provides about 6% of Pakistan’s totalelectricity generation through its fired thermal plant. The firm was looking to build anew power plant and entered into an agreement with German’s MAN Diesel to supplya 225 MW power plant.Hubco established an LC through HBL in favour of the German firm for $138million. Hubco paid $37.5 million in advance but needed the remaining $100 millionto be confirmed. However, Hubco found very few banks willing to embrace Pakistanrisk thanks to the uncertain economic and political environment last year, and struggledto find a single bank able to solely arrange the credit and cross-border risk fortransaction.Citi stepped in and agreed to arrange and confirm the LC in collaboration with theInternational Finance Corporation (IFC). In response to the challenges, Citi initiateddiscussions with both the buyer and seller and structured a solution that took intoaccount peak flows and runoff schedules under the LC. Under Citi’s structure theexposure was reduced from $100 million to $65 million, but crucially the dealmaintained comprehensive coverage.The IFC co-financed the deal through its Global Trade Facilitation Programme(GTFP). The two institutions performed an admirable task of providing both Hubcoand MAN Diesel with the comfort they needed to ensure a smooth delivery of anessential project.Commenting on the deal Faraz Haider, MENA trade head at Citi in Dubai, says:“Citi Pakistan managed to put a structured offering addressing the critical cross-borderconstraints the country faced. Power shortages, urgent capacity/generation were ofprime importance and the deal required a quick turnaround. We leveraged ourstructuring and distribution capabilities under the IFC’s GTFP programme to close thisin record time.” ■130 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

TOP REGIONAL BORROWERS & LENDERSTop 10 borrowers for Asia Pacific trade finance (includingbilateral) 1 Jan - 29 Nov 2010Deal valuePos. Borrower US$ m No. %Share1 Noble Group Ltd 1,599 1 10.72 National Aviation Co of India Ltd 1,100 1 7.33 China CITIC Bank Corp Ltd 1,063 154 7.14 PT Cirebon Electric Power PT CEP 595 1 4.05 Cathay Pacific Airways Ltd 560 1 3.76 PT Paiton Energy Co 539 1 3.67 PetroVietnam Nhon Trach 2 Power JSC 534 2 3.68 Merah Sembilanbelas Ltd 500 1 3.39 Air India 465 1 3.110 PT PLN Persero 455 1 3.0Total 14,996 291 100.0Source: DealogicTop 10 MLAs for Asia Pacific trade finance (including bilateral)1 Jan - 29 Nov 2010Deal valuePos. Arranger US$ m No. %Share1 BNP Paribas 2,305 24 15.42 BBVA 2,251 215 15.03 Citi 1,803 12 12.04 JPMorgan 1,100 1 7.35 China Development Bank Corp 882 3 5.96 Standard Chartered Bank 871 10 5.87 HSBC 725 9 4.88 Mitsubishi UFJ Financial Group 587 6 3.99 ING 549 5 3.710 Credit Agricole CIB 516 13 3.4Total 14,996 291 100.0Source: DealogicTRADE FINANCE The Guide to Global Trade Finance Markets 2011 131

DIRECTORYDirectoryContentsABN AMRO 134Atradius 135Banco Espirito Santo (BES) 136Bank of America Merrill Lynch 137BMO Capital Markets 141BPL Global 142Citi 143Deutsche Bank 145Europe Arab Bank 146Export Development Canada (EDC) 147Fimbank 148Garanti Bank 149ISBANK 150Islamic Trade Finance Corporation (ITFC) 151Nedbank 152Rabobank 153Scotiabank 156SEB 157SNR Denton 159Société Générale 163Swiss Re 166Uralsib 168Zurich 169TRADE FINANCE The Guide to Global Trade Finance Markets 2011 133

DIRECTORYABN AMRO Bank N.V.Gustav Mahlerlaan 101082 PP AmsterdamThe Netherlandswww.abnamro.comABN AMRO offers a comprehensive package of financial products and services toretail, private, corporate and institutional clients.ABN AMRO’s business line Large Corporates & Merchant Banking serves clientsranging from public sector institutions and multinationals to institutionalinvestors. Our expertise is reflected in first-rate financing products such asacquisition financing, trade financing and structured funding. Large Corporates &Merchant Banking is a worldwide top player in the areas of Brokerage, Clearing &Custody and Energy, Commodities & Transportation (ECT).ECT is active throughout the entire value chain. We tailor our services to theneeds of our clients.Within Commodities, we offer financial services to companies which are active inthe production, primary processing, trading, logistics and distribution of crude oil,refined products, natural gas, agricultural products, metals and steel. Our track recordand proven competence in the commodity markets makes us a leader in this field.Our dedicated professionals combine in-depth knowledge of the Commoditiesmarkets and industries with financial expertise. Within ECT we offer our clientsone-stop access to the bank’s extensive range of products and services includingCash Management, Treasury Products, Commodity Derivatives, Clearing,Syndications, Export & Project Finance, Co-Investments, Equity and DebtCapital markets. Today Commodities is present in all major time zones and hasoffices in Amsterdam, Rotterdam, Dubai, Hong Kong, Singapore, New York andSao Paulo and building up presence in China.For more informationEnergy, Commodities & TransportationHarris Antoniou+31 10 4010722Harris.antoniou@nl.abnamro.comEnergy, Commodities & Transportation – AsiaMaaike Steinebach+852 3653 0888Maaike.steinebach@hk.abnamro.comEnergy CommoditiesBruno Gremez+31 20 5274781Bruno.gremez@nl.abnamro.comMetals CommoditiesPiet Hein Ingen Housz+31 10 4016793Piethein.ingen_housz@nl.abnamro.comAgri CommoditiesRick Torken+31 10 4015361Rick.torken@nl.abnamro.com134 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYAtradius Credit Insurance N.V.Corporate CommunicationsPO Box 8982The Netherlandswww.atradius.comCompany profileAs one of the biggest credit insurers in the world, with more than 80 years ofexperience Atradius helps companies manage their trade credit risks.We offer a comprehensive range of credit management solutions that protectbusinesses of all sizes against the commercial and political risks inherent indomestic and global trade.By insuring trade receivables, our customers reduce exposure to bad debt,ensuring a more stable cash flow and effectively turning risk capital into growthcapital.Our focus is on expanding our product portfolio with innovative creditmanagement solutions and product enhancements.ContactAtradius Credit Insurance N.V.Corporate CommunicationsPO Box 8982The NetherlandsTel: +31 (0)20 553 2047Email: corporate.communications@atradius.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 135

DIRECTORYBanco Espírito Santo (BES)Av. Da Liberdade, 1951250-142 LisboaTel: +351 21 359 7000www.bes.ptBanco Espírito Santo (BES) is the largest listed bank by market cap and thesecond largest private financial institution in Portugal. BES is recognized bothdomestically and internationally as the reference bank in Portugal for TradeFinance activities and practices and has been so for the last decade, with a marketshare of 27%. Since 2005, the redefinition of BES commercial approach resultedin the creation of a team exclusively dedicated to the promotion and sale of TradeFinance Products – an unprecedented initiative in the Portuguese context.This team’s objectives are twofold: (i) to give specific Trade Finance support andtraining to all business divisions within BES Group and (ii) to provide customerswith in-depth knowledge namely whenever BES contribution is requested to helpsetting up specific Trade Finance transactions. This challenge impels BES to providea well-structured know-how sustained by the capabilities of an experienced teamand supported by efficient and reliable systems. BES has also continued tostrengthen the Trade Finance business line, through the offer of traditional TradeFinance products covering import and export financing, documentary processing,and also more complex structures such as pre-export finance, trade risk mitigationand risk participations, structured trade finance, and forfaiting. That is why BES wasdistinguished, for the 4th consecutive year, by Global Finance magazine as the BestTrade Finance Bank operating in Portugal in 2010.To find out more about our product offering and how we can help your company,please contact our Trade Finance team.ContactTeresa CarvalhoExecutive Vice PresidentTrade and Export FinanceTel: + 351 350 10 68tmcarvalho@bes.ptAlexandre VascoSenior Vice PresidentTrade Finance – EAMEATel: + 351 350 88 12amvasco@bes.ptIsabel CottaVice PresidentTrade Finance – AmericasTel: + 351 359 72 27Isabel.cotta@bes.ptGlobal Trade Finance TeamTel: + 351 222 063 510tradefinance@bes.pt136 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYBank of America Merrill LynchCharlotteNCwww.bankofamerica.comGlobal Trade & Supply Chain FinanceCompanies of all sizes find increasing opportunity in expanding their businessinternationally, both sourcing from and selling to an expanded global market. Butwith opportunity comes risk and complexity, and driving an efficient supply chainis more important than ever.Bank of America Merrill Lynch is a leader in global trade and supply chainsolutions. We deliver a range of processing and financing solutions that help clientsdiscover hidden value and drive efficiency. Through our global network, we linkbuyers and suppliers worldwide in an end-to-end process that improves workingcapital efficiency, manages risk, and enhances the visibility and control of strategictrading partners.Bank of America Merrill Lynch trade professionals are trusted advisors who offera competitive advantage through solutions in technology integration, openaccount processing, automated document preparation and presentment services,supply chain financing and physical supply chain visibility. For proven tradeexpertise, trusted advice and a full array of processing and financing solutionsaround the globe, look no further.Our offerings include:Import and export letters of credit – Receive or sell goods internationallywith greater assurance and efficiency.Documentary collections – Bank-controlled payments ensure importers gettitle to goods upon payment and exporters receive funds based on delivery of thetitle documents.Open account payments – Settlement solutions coupled with documentmanagement expertise help importers streamline their trading partner paymentprocessesBanker’s acceptances – Obtain cost-effective financing of international tradefor shipments under letters of credit, collection or open account.Agency financing – We provide expertise and guidance in seeking financingthrough the Export-Import Bank of the United States (ExIm) and OverseasPrivate Investment Corporation (OPIC), among others.Supply chain finance – Utilize value in your supply chain to improve workingcapital and vendor performance.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 137

DIRECTORYBruce B. ProctorSenior Vice PresidentGlobal Trade & Supply Chain FinanceExecutiveOne Bryant ParkNew York, NY 10036USAPhone: 646.855.1120Email: Bruce.Proctor@baml.comMaureen M. SullivanSenior Vice President – Head of NorthAmerican Trade Sales540 W Madison St.Chicago, IL 60661USAPhone: 312.992.8909Email: maureen.m.sullivan@baml.comMichael GoldenbergSenior Vice President, National SalesManager – Large CorporateOne Bryant ParkNew York NY 10036USAPhone: 646.855.2839Email: michael.goldenberg@baml.comRob StigallSenior Vice President, National SalesManager – Commercial Banking600 Peachtree St NEAtlanta, GA 30308-2265USAPhone: 404.607.5298Email: rob.stigall@baml.comMarcia DavisSenior Vice President, Specialized TradeManager1 Landmark SqStamford, CT 06901USAPhone: 203.905.4116Email: marcia.m.davis@baml.comChris BozekSenior Vice President, Product ManagementExecutive65 Gannett DrSouth Portland, ME 04106USAPhone: 207.842.5154Email: christopher.t.bozek@baml.comBrian BrennanSenior Vice President, Senior ProductPlatform Manager100 Federal StBoston, MA 02110Phone: 617.434.8393Email: brian.l.brennan@baml.comDennis DuboisSenior Vice President, Senior ProductManager100 Federal StBoston, MA 02110USAPhone: 617.434.4665Email: dennis.dubois@baml.com138 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

Smooth sailingfrom procurementthrough settlement.Linking more than 150 countries, our global trade and supply chain financesolutions give you a worldwide edge. Let our expertise help you minimizerisk and optimize cash fl ow everywhere in the pipeline.Taking your opportunity further. That’s return on relationship.“ Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives,and other commercial banking activities are performed globally by banking affi liates of Bank of America Corporation, including Bank of America, N.A., memberFDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affi liates of Bank of America Corporation(“Investment Banking Affi liates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and memberof FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affi liates: Are Not FDIC Insured • May LoseValue • Are Not Bank Guaranteed. ©2010 Bank of America Corporation.

DIRECTORYPaul JohnsonSenior Vice President, Senior ProductManager333 S Hope StLos Angeles, CA 90071-1406USAPhone: 213.621.7124Email: paul.a.johnson@baml.comEurope, Middle East, AfricaRoque DamacelaSenior Vice President – EMEA ProductManagement Executive5 Canada SquareLondonE14 5AQUnited KingdomPhone: 44.20.7995.0434Email: roque.damacela@baml.comLatin AmericaJuan Pablos CuevasSenior Vice President – LatinAmerica/Canada Sales701 Brickell Ave.Miami, FL 33131USAPhone: 305.347.2811Email: juan.p.cuevas@baml.comAsia PacificKuresh M. SarjanSenior Vice President – Asia-Pacific SalesTwo International Finance Centre8 Finance StreetHong KongPhone: 85228476838Email: kuresh.sarjan@baml.comAdriano DarivaVice President, EMEA Sales5 Canada SquareLondonE14 5AQUnited KingdomPhone: 442071745595Email: adriano.dariva@baml.com140 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYBMO Capital MarketsTrade Finance1 First Canadian PlaceToronto, ONM5X 1A1Tel: +1 416 867 6413www.bmocm.com/tradefinanceBMO Capital Markets is a leading, full-service North American financial servicesprovider offering corporate, institutional and government clients access to acomplete range of products and services. With over 2,000 professionals in officesin 26 locations around the world, including 14 in North America, BMO CapitalMarkets works proactively with clients to provide innovative and integratedfinancial solutions.Our trade finance specialists have extensive experience helping importers andexporters throughout North America execute their strategies in Asia, LatinAmerica and Europe. We provide full trade finance capabilities – from traditionalimport and export documentary letters of credit, documentary collection, standbyletters of credit and guarantees, to trade receivables, payables processing and supplychain finance, to structured trade finance.Over the years we have made the necessary investments to create the products,services and technology infrastructure required to help our clients build andmaintain competitive advantage. We have imaginative, effective solutions for yourmost complex financing challenges.BMO Capital Markets and Harris N.A. based in Chicago are members ofBMO Financial Group (NYSE, TSX: BMO), one of the largest diversifiedfinancial services providers in North America with US$386 billion total assetsand 38,000 employees as at July 31, 2010.ContactsCraig TravelsteadDirector Trade Finance Sales, North AmericaChicago, Illinois, USATel: 312 461 3345Fax: 312 293 5008craig.travelstead@bmo.comJohn StocktonDirector, Working Capital & Structured Solutions SalesChicago, Illinois, USATel: 312 461 7413Fax: 312 293 5008john.stockton@bmo.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 141

DIRECTORYBPL GlobalEmerging Market Risk150 Leadenhall StreetLondonEC3V 4QTTel: +44 20 7375 9600www.bpl-global.comBPL Global is an insurance broker specialising in emerging market risk operatingacross the four political risk insurance (PRI) market business lines:Pure political risk policies1. Equity Form and Lenders’ Form Investment Insurance.2. Property related PRI policies.Non-payment policies3. Speciality Trade Credit Insurance.4. Credit Insurance for Banks.Since its establishment in 1983, BPL Global has settled over 250 PRI marketclaims, collecting USD1.2 billion in claims payments for its policyholder clients.Our experience of how different PRI market policies and insurers perform whenclaims arise, together with our knowledge of the market, is a major source of ouradded value.We operate from our own offices in London and Paris. We are founding membersof the Global network of independent trade credit and PRI brokers. Our clientsbenefit from our affiliated offices in North America, Europe and elsewhere thatare members of this Global network.ContactsLondonParisAnthony PalmerIsabelle SimonBerry Palmer & Lyle LtdBerry Palmer & Lyle SA150 Leadenhall Street 91 rue du Faubourg Saint-HonoréLondon EC3V 4QT75008 ParisTel: +44 20 7375 9600 Tel: +33 1 5818 6800Fax: +44 20 7929 4499 Fax: +33 1 58 18 59 29anthony.palmer@bpl-global.com isabelle.simon@bpl-global.com142 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYCiti388 Greenwich StreetNew YorkNY 10013USATel: +1 212 816 6000www.transactionservices.citi.comYour Global Partner in a Changing EconomyFrom risk mitigation to financing, settlement to information, Citi’s trade experts –with a market-leading network spanning 73 countries and 126 cities – delivercomprehensive solutions to suppliers, buyers and financial institutions worldwide.Our access to local and global markets, long-standing relationships with exportcredit agencies, development and multilateral finance institutions, and awardwinningtechnology platforms enable clients to act nimbly and efficiently even intimes of restricted market liquidity.Citi offers an integrated trade platform that incorporates Working Capital andSupply Chain Management, Trade Services (including Specialized Tradeprograms) and Export and Agency Finance products, all working together tocreate end-to-end solutions ranging from short- and medium-term financing tocomplex structured trade models.Our Solutions and ServicesWorking Capital andSupply ChainExport andManagement Trade Services Agency FinanceSupplier Finance Export Solutions Export Credit Agency(ECA) GuaranteedProgramsDistribution Finance Import Solutions Untied AgencyGuaranteed FinancingsCommodity Trade Finance Risk Participations Agency Direct LendingExport Credit Agency- Export Credit Agency Private Insurance-Backedsupported working and multilateral- Programscapital programsbacked tradefacilitation programsTRADE FINANCE The Guide to Global Trade Finance Markets 2011 143

DIRECTORYWith Citi as your partner, you’ll benefit from our innovative ideas and advancedtechnology, enabling you to:l Manage risk and inject liquidity into your supply chain;l Improve working capital;l Control trade flows and multiple currency cash flows;l Access information to facilitate the management of your trade activities.If you’re looking to develop a customized solution that matches your unique traderequirements, look to Citi.ContactsUnited StatesJohn AhearnManaging DirectorGlobal Head of TradeTel: +1 212 816 3085john.ahearn@citi.comCraig WeeksManaging DirectorGlobal Head of Trade ProductSalesTel: + 1 212 816 2958craig.weeks@citi.comRoland HartleyDirectorNorth America Trade SalesTel: + 1 212 816 4276roland.hartley@citi.comValentino GalloManaging DirectorGlobal HeadExport and Agency FinanceTel: +1 212 816 1008valentino.gallo@citi.comAekyong ChungManaging DirectorAmericas HeadExport and Agency Financeaekyong.chung@citi.comTel: +1 917 328 8367United KingdomSameer SehgalManaging DirectorEurope, Middle East, AfricaTrade HeadTel: +44 20 7508 0726sameer.mohan.sehgal@citi.comNigel BottrillManaging DirectorEurope Middle East AfricaTrade Sales HeadTel: +44 20 7508 1319nigel.bottrill@citi.comLatin AmericaRenato FariaManaging DirectorLatin America Trade HeadTel: +5255 2226 7580renato.faria@banamex.comCarolina JuanManaging DirectorTreasury and Trade SolutionsSales HeadTel: +571 639 4026carolina.juan@citi.comAsiaRavi SaxenaManaging DirectorAsia Pacific Trade Head andDeputy Global Trade HeadTel: +852 2868 7088ravi.saxena@citi.comSumanta PanigrahiDirector, Asia Pacific HeadExport and Agency FinanceTel: +852 2868 6324sumanta.panigrahi@citi.comYohei YumotoDirector, Japan HeadExport and Agency FinanceTel: +813 6270 9089yohei.yumoto@citi.comSanjay TandonManaging DirectorAsia Head Trade ServicesTel: +852 2868 6484sanjay.tandon@citi.com144 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYDeutsche Bankwww.db.com/gtbgtb.marketing@db.comInternational trade is highly complex and involves a range of risks. With Deutsche Bank,clients can seamlessly manage all their trade needs with one banking partner.Deutsche Bank’s Trade Finance team offers local expertise, a range of international tradeproducts and services, custom-made solutions for structured trade and the latesttechnology across its international network so that its clients can better manage the risks,and other issues, associated with their cross-border and domestic trade.Deutsche Bank’s financial supply chain solutions enable its clients to enhance theirworking capital management, improve their operating efficiencies and strengthen theirrelationships with trading partners. Additionally, Deutsche Bank’s expertise in the world’sfinancial markets and world-wide presence give its trade finance clients access to capitalmarkets and a powerful distribution platform for primary and secondary markets.Recent accolades:t Best Short-Term Trade Finance Bankt Best Trade Bank in Europet Best International Trade Bank in Koreat Best International Trade Bank in Malaysiat Best International Trade Bank in Philippinest Best International Trade Bank in Thailandt Best International Trade Bank in TaiwanTrade Finance magazine Awards for Excellence 2010ContactsKees HovingHead of Trade Finance and Cash ManagementCorporates Germanykees.hoving@db.comPeter KnodtGlobal Head of Trade Finance FinancialInstitutionspeter.knodt@db.comJohn MacNamaraGlobal Head of Structured CommodityTrade Financejohn.macnamara@db.comKlaus MichalakGlobal Head Structured Trade & Export Financeklaus.michalak@db.comShahrokh MoinianHead of Trade Finance and Cash ManagementCorporates Americasshahrokh.moinian@db.comRoger PackhamHead of Trade Finance Asia Pacificroger.packham@db.comDaniel SchmandHead of Trade Finance and Cash ManagementCorporates EMEA (ex Germany)daniel.schmand@db.comKaushik ShapariaHead of Trade Finance and Cash ManagementCorporates Asiakaushik.shaparia@db.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 145

DIRECTORYEurope Arab Bank plc13-15 Moorgate,LondonEC2R 6ADTel: +44 20 7315 8500Fax: +44 20 7600 7620www.eabplc.comEurope Arab Bank (EAB) is a wholly-owned subsidiary of Arab Bank plc. Itopened its doors for business in August 2006 and has a capitalization of somea571m. EAB’s headquarters are in London, England and the Bank has offices inAustria, France, Germany, Italy and Spain.Clients of EAB have access to a comprehensive range of treasury, private,corporate and institutional banking products and services.Trade finance is at the heart of Arab Bank Group’s business. EAB’s mandate is toaugment the organization’s existing trade and export finance track record,focusing on the needs of European-based clients looking to do business in theMENA region.ContactsGerard KeatingAssociate Relationship Director, Trade &Commodity FinanceUKTel: +44 20 7315 8677gerard.keating@eabplc.comMarc MesanaRelationship DirectorParisTel: +33 1 45 61 60 27marc.mesana@eabplc.comJavier RodriguezRelationship DirectorMadridTel: +34 91 702 7922javier.rogriguez@eabplc.comMario SabelliAssociate Relationship DirectorMilanTel: +39 0276 398 521mario.sabelli@eabplc.comLars Von-SchlachtaRelationship DirectorFrankfurtTel: +49 69 2425 9213lars.vonschlachta@eabplc.com146 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYExportDevelopmentCanada (EDC)151 O’Connor StreetOttawaK1A 1K3CanadaTel: +1 613 598 2500www.edc.caContactinfo@edc.caExport Development Canada (EDC) is Canada’s export credit agency, offeringfinancing, insurance and risk management solutions. EDC is constantly lookingfor new, innovative ways to serve our customers. Our goal is to help Canadiancompanies, no matter how big or small, capitalize on all the exciting opportunitiesthat international trade offers.Several of the unique financial and risk management solutions we offer Canadiancompanies are available to companies worldwide seeking to expand their businessby trading with Canada. We are an excellent conduit to the wealth of resources,expertise and technology that Canadians can provide.EDC has accumulated over 65 years of in-depth market intelligence and sectoralexpertise in international markets worldwide. In 2009, EDC facilitated $82.8billion in exports and investments in 187 markets.For more information on the full suite of EDC services available to Canadianexporters and investors and their international partners, contact us.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 147

DIRECTORYFIMBank plc7th FloorThe Plaza CommercialCentreBisazza StreetSliema SLM 1640MaltaTel: +356 2132 2100Fax: +356 2132 2122www.fimbank.comMargrith LütschgEmmeneggerPresidentmargrith.lutschg@fimbank.comArmin EckermannDeputy PresidentHead of Banking Grouparmin.eckermann@fimbank.comA Global Force in Trade Finance.SINGAPORE SÃO PAULO NEW YORK MUMBAI MOSCOW MALTA LONDON ISTANBUL DUBAI CAIRO BEIRUTFIMBank Group – A Global Force in Trade FinanceFIMBank is an international trade finance specialist with an established reputation as adynamic and customer-driven provider of trade finance solutions to corporates, banksand individuals worldwide. Through its offices in Malta, United Kingdom, USA,Brazil, Turkey, Lebanon, Russia, Singapore, Egypt and Dubai the Bank offers a uniqueand flexible environment in which trade finance opportunities are identified,innovatively structured and successfully executed.FIMBank provides a wide range of trade finance and support banking services including:• Letters of credit• Currency accounts and term deposits• Bridging finance facilities • Bonds and guarantees• Ship scrapping finance• Payments/Wire transfers• Syndication/risk participations • Foreign Exchange• Counter/barter trade facilities • FactoringForfaiting services are provided through the Bank’s fully owned subsidiary LondonForfaiting Company Limited - www.forfaiting.comInternational Factoring Joint Venture StrategyFIMBank actively pursues a strategy of establishing factoring joint ventures withprominent institutions in selected emerging markets. The international network ofFactoring Joint Ventures currently includes MenaFactors in Dubai, LCI Factors inLebanon, Egypt Factors in Egypt, FactorRus in Russia and India Factoring in India.148 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYGaranti BankNispetiye Mah. Aytar Cad. 2Levent BesiktasIstanbul – 34330TurkeyTel:+90 212 318 1818Fax:+90 212 318 18 88www.garanti.com.trGaranti is a fully integrated financial services company operating in corporate,commercial, SME and retail banking as well as credit cards, leasing, factoring,mortgage, brokerage, asset management, non-life insurance and pensionbusinesses. The bank provides wide range of innovative products and services to itscustomers in different segments through leveraging on its state-of-the-arttechnology and its competent human resources.As a result of its customer-centric growth model, Garanti’s consolidated asset sizeincreased to over $75 billion, making it the second largest private bank and thelargest lender in Turkey.Garanti serves to over 9 million customers through its strong multi-channeldistribution network with over 820 domestic branches, six foreign branches(Luxembourg, Malta and Turkish Republic of Northern Cyprus) and fourinternational representative offices (Moscow, London, Düsseldorf and Shanghai),around 3,000 ATMs, an award-winning call center, internet bank and a mobilebank. The bank operates three international banking subsidiaries, namelyGarantiBank International NV in the Netherlands, GarantiBank Moscow inRussia and GE Garanti Bank SA in Romania.ContactsTaliye TürkerVP, Trade FinanceTel: +90 212 318 17 20taliyet@garanti.com.trShanghaiNoyan RonaRepresentativeTel: +86 21 5879 7900noyanr@garanti.com.trDusseldorfFahri BirinciogluRepresentativeTel: +49 211 86 222 301fbirincioglu@garantibank.euMoscowErkan KurtRepresentativeTel: +7 495 961 25 21erkan.kurt@gbm.ruTRADE FINANCE The Guide to Global Trade Finance Markets 2011 149

DIRECTORYIsbankTürkiye Is Bankası A.S. (Isbank)Head Office, Is Kuleleri, Kule 134330 Levent, Istanbul, TurkeyTel: 90 212 316 00 00Fax: 90 212 316 09 00SWIFT: ISBKTRISwww.isbank.com.trIsbank is the largest privately-owned bank in Turkey by total assets and deposits, thebiggest bank in total loans and the market leader in mutual funds (as of 30 June2010). On the basis of 2009 year-end consolidated financial statements, Isbankranked 103rd, in the “Top 1000 World Banks” survey of The Banker magazine.The name Isbank connotes high reputation both in the local and internationalmarkets. Besides its 13 branches in Northern Cyprus, Isbank has foreign branches inManama and London, a rep-office in Shanghai and in Cairo and a subsidiary, IsbankGmbh in Germany with 14 branches and maintains a wide array of correspondentbanks covering 124 countries expanding to all continents in the world.Isbank is a major player in international trade finance, international payments andcash management, project finance, loro-vostro account services which makesIsbank a perfect local partner in Turkey for the international banking business.ContactMr Yılmaz ErtürkMrs. Sule AkalınHead of International Banking Division Structured Finance Unit ManagerTel: +90 212 316 28 02 Tel:+90 212 316 28 19Fax: +90 212 316 09 28 Fax:+90 212 316 08 32yilmaz.erturk@ isbank.com.trsule.akalin@isbank.com.trMrs. Ayse Gülenç TunaCorrespondent Banking Unit ManagerTel: +90 212 316 28 21Fax: +90 212 316 09 28ayse.tuna@isbank.com.tr150 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYInternational Islamic TradeFinance Corporation (ITFC)Islamic Development Bank Group (IDB)Headquarter, 14th FloorKing Khalid RoadP.O Box 55335Jeddah 21534Kingdom of Saudi ArabiaTel: +966 2 636 1400Fax: +966 2 637 1064www.itfc-idb.orgThe International Islamic Trade Finance Corporation (ITFC), an autonomous entitywithin the Islamic Development Bank (IDB) Group, inherited the pioneeringmantle of its trade finance expertise and its application of innovative Islamic financeinstruments developed over a period of more than 30 years from its parentorganisation. This rich heritage and savoir-faire positions ITFC at the forefront ofinternational trade to foster socio-economic development through trade solutions.In addition, the ITFC supports the development of markets and trading capacities ofits member countries of the Organisation of the Islamic Conference (OIC) in orderto promote the IDB Group’s strategic developmental objectives.Operating to world-class standards, setting new benchmarks as well as structuringinnovative Shariah-compliant trade solutions; supports the ITFC’s raison d’être tobe a catalyst for the development of trade among OIC member countries andwith the rest of the world. ITFC aspires to be the recognized provider of tradesolutions for OIC member countries’ needs; in order to fulfill its brand promise of‘Advancing Trade & Improving Lives’.ContactsHani Salem SonbolDeputy Chief Executive Officerhsunbol@itfc-idb.orgTel: +966 2 646 7014Mohamed Saleh HebshiGeneral Manager, TradeCooperation & Promotion Program(TCPP)mhebshi@itfc-idb.orgTel: +966 2 646 7023Nazeem NoordaliGeneral Manager, Marketingmnoordal@itfc-idb.orgTel: +966 2 646 7004Nasser Al-ThekairAssistant GM, Marketing (MENA)nal-thekair@itfc-idb.orgTel: +966 2 646 7003Mamadou DiopHead of Structured Trade Financemddiop@itfc-idb.orgTel: +966 2 646 7008Mahanna Sobieh FoudahGeneral Manager, Treasurymsobaih@itfc-idb.orgTel: +966 2 646 7009Ahmed JanAssistant GM, Treasuryajan@itfc-idb.orgTel: +966 2 646 7010TRADE FINANCE The Guide to Global Trade Finance Markets 2011 151

DIRECTORYNedbank Capital GlobalStructured Trade &Commodity Financewww.nedbankcapital.co.zaThe head of Global Structured Trade & Commodity Finance (GSTCF) is SeketeMokgehle, who is based in Johannesburg. The global team now totals 17 with11 people based in the Johannesburg Head Office and six people in the Londonoffice. The business is set up around four separate desks: Softs (Donald Stewart andPatrick Knowles/Johannesburg), Energy (Stewart Makura/Johannesburg), Metals(Mike Marnell/London) and European Traders (Dominic Loveday/London).The focus of the Johannesburg office is around soft commodities – typically beveragecrops, textile fibres and grains and oil seeds, as well as the energy sector includingfossil fuels and refined petroleum products. The London desks support the majorEuropean traders with business interests on the sub-Saharan African continent, aswell as the working capital financings of ferrous and non-ferrous metals.JOHANNESBURGSekete MokgehleHead: Global Structured Trade &Commodity FinanceTel.: +27 11 294 3046Cell: +27 82 805 0147Fax: +27 11 295 3046seketem@nedbankcapital.co.zaStewart MakuraHead: EnergyTel: +27 11 294 3006:Cell: +27 82 772 1928Fax: +27 11 295 3006stewartm@nedbankcapital.co.zaLONDONTim HartSenior Advisor & OriginationCoordinatorTel: +44 20 7002 3443Cell +44 7540 124 123Fax: +4420 7002 3404thart@nedbankcapital.co.uktimothyh@nedbankcapital.co.zaDominic LovedayHead: European TradersTel: +4420 7002 3444Cell: +44 7515 919 840Fax: +4420 7002 3404dloveday@nedbankcapital.co.ukDonald StewartJoint Head: SoftsTel.: +27 11 294 3313Cell: +27 82 466 5294Fax: +27 11 295 3313donalds@nedbankcapital.co.zaWayne KhouryPrincipal: OperationsTel.: +27 11 294 3401Cell: +27 82 904 8832Fax: +27 11 295 3401waynek@nedbankcapital.co.zaMike MarnellHead: MetalsTel: + 44 20 7002 3430Cell: +44 7540 126 154Fax: + 44 20 7002 3404mmarnell@nedbankcapital.co.ukPatrick KnowlesJoint Head: SoftsTel: +27 11 294 3314Cell: +27 82 459 6996Fax: +27 82 459 6996patrickk@nedbankcapital.co.zaNick LangTrade Credit SpecialistTel: +44 20 7002 3466Cell +44 7595 551 180Fax: +44 20 7002 3404nlang@nedbankcapital.co.uk152 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYRabobank InternationalCroeselaan 283521 CB UtrechtThe Netherlandswww.rabobank.comRabobank Group is an international financial services provider operating onthe basis of cooperative principles. It offers retail banking, wholesale banking,asset management, leasing, real estate and insurance services. Strategic focus ison achieving market leadership as an all-finance bank in the Netherlands andon building on the bank's leading position as a food & agri bank internationally.Rabobank Group is comprised of independent local Rabobanks plusRabobank Nederland, their central organisation, as well as a number ofsubsidiaries and associates, including a 39% equity interest in Eureko, aninsurance company. The organisation, which has about 60,000 employees,operates in 46 countries.Rabobank Group has the highest credit rating, Triple A, awarded by the wellknowninternational rating agencies Standard & Poor's and Moody's. In termsof Tier I capital, Rabobank Group is one of the largest banks in the world.The Trade & Commodity Finance (TCF) business unit brings togetherRabobank’s long term expertise in agricultural commodities, export finance aswell as energy and metals commodity finance. TCF’s aim is to be a one-stoptrade flow solution provider. Rabobank offers in depth product knowledge,embedded in a global branch network and professional support for allinternational trade transactions. Rabobank identifies financial product needsalong the supply chain, working with the client to maximize flow efficienciesand minimize financial and operational risks.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 153

DIRECTORYRabobank Internationalwww.rabobank.comContactsDiane BoogaardGlobal Head Trade &Commodity FinanceUtrechtTel: +31 (0)30 71 22606Diane.Boogaard@Rabobank.comKarel ValkenGlobal Head, Agri CommoditiesUtrechtTel: +31 (0)30 71 22609Karel.Valken@Rabobank.comStephan JansmaGlobal Head EnergyLondonTel: +44 (0)20 7809 3808Stephan.Jansma@Rabobank.comSema ZeynelogluGlobal Head, Financial InstitutionsEmerging MarketsUtrechtTel: +31 (0)30 71 22183Sema.Zeyneloglu@Rabobank.comJoep KockmannGlobal Head, Metals & MineralsUtrechtTel: +31 (0)30 71 22610Joep.Kockmann@Rabobank.comHarry WeinandsGlobal Head, Export FinanceUtrechtTel: +31 (0)30 71 22542Harry.Weinands@Rabobank.com154 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYRabobank Internationalwww.rabobank.comContactsJan de LaatRegional Head TCF AmericasNew YorkTel: +1 212 916 7910Jan.de.Laat@Rabobank.comBarbara HylandHead TCF New YorkNew YorkTel: +1 212 916 7878Barbara.Hyland@Rabobank.comKenny WeiRegional Head TCF Asia/PacificHong KongTel: +852 210 2425Kenny.Wei@Rabobank.comDavid CormackHead TCF AustraliaSydneyTel: +61 2 8115 2752David.Cormack@Rabobank.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 155

DIRECTORYScotiabank44 King Street WestToronto, ONM5H 1H1Canadawww.scotiabank.comLocal strength. Global reach.Let Scotiabank draw on our network of branches and offices around the globe toprovide you with comprehensive, integrated trade finance and correspondentbanking services.With over 150 years of experience in international trade finance, we can be yourend-to-end supply chain financing partner, helping to facilitate internationaltrade, minimize trade risk or protect import and export flows. We can provideseamless domestic and cross-border solutions including specialized vendorprograms, cross-border buyer credits and subsidiary financing.Our extensive presence with representation in some 50 countries and over 2,700branches and offices means we can deliver true global solutions.Global Transaction Banking (GTB):Kevin ClarkSenior Vice-President, GTB SalesTel. +1 416 933-1311kevin.clark@scotiabank.comCANADA AND WESTERN EUROPEMike PughVice-President, GTB SalesTel. +1 416 933-1551mike.pugh@scotiabank.comLATIN AMERICA AND MEXICOSalvador CruzVice-President, GTB SalesLatin America and MexicoTel. +52 55 5229-2191scruz@scotiabank.com.mxASIA/PACIFICGary GortonVice-President, Trade Finance & Financial InstitutionsTel. +852 2861-4802gary.gorton@scotiabank.comINTERNATIONAL SALESJim LiddellVice-President, International SalesTel. +1 416 866-7585jim.liddell@scotiabank.comTURKEY, EMERGING MARKETS,EUROPE, MIDDLE EAST & NORTHAFRICANihal OlenikChief Representative & DirectorRepresentative OfficeTel. +90 212 251-0049nihal.olenik@scotiabank.com156 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYSEBKungsträdgårdsgatan 8106 40 StockholmSwedenwww.seb.seTrade & Supply Chain Finance has historically been a vital and instrumental partof our unique overall offering to our multinational customers, helping them totrade all over the world since 1856.All these ventures have made SEB a very strong player in Trade Finance globallyand a dominating one in our key markets in Northern Europe.Competing about being, maybe not the biggest at all markets, but the Best TradeFinance provider in the Nordic region, with a focus on innovative solutions,customer relations and knowledge.Supply Chain Financing is a partnership arrangement between a buyer, hissuppliers and SEB as a bank. After approval from the buyer, SEB purchases thesuppliers accounts receivable issued on the buyer and pays for the approvedreceivable early. The buyer then pays SEB the full amount on the receivables duedate. Since the buyer might negotiate longer payment terms SEB offer anopportunity to ensure improved cash flow for both buyer and supplier andcheaper financing (due to risk transfer to buyer with normally better rating) andoff balance sheet treatment for the supplier.SEB has a long record of providing our customers leases. By using our leasingsolutions customer can use their working capital more effectively.Factoring is a way for companies to quickly release capital from accountsreceivable and thus improve liquidity. With accounts receivable as collateral, theycan finance its growth. SEB offer a wide variety of factoring products as well aspurchase of receviables.Vendor cooperation provides clients with a sales tool which give them anopportunity to offer their customers a financing solution for their investment,normally through leasing or rental products.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 157

DIRECTORYSEBKungsträdgårdsgatan 8106 40 StockholmSwedenwww.seb.seContactContact Sweden:Patrik ZekkarHead of Trade & Supply Chain Financepatrik.zekkar@seb.seTel: + 46 8 763 86 64Contact Estonia:Maarja-Maria AljasHead of Trade & Supply Chain Financemaarjamaria.aljas@seb.eeTel: +370 665 7170Contact Latvia:Evija Putne-PrizevoitaActing Head of Trade & Supply Chain Financeevija.putne-prizevoita@seb.lvTel: +371 (6) 721 5713Contact: Lithuania:Inga PoskienéHead of Trade & Supply chain financeinga.poskiene@seb.ltTel: +370 526 82389Contact Finland:Jarmo SaariHead of Trade & Supply Chain Financejarmo.saari@seb.fiTel: +358 9 6162 8106Contact Poland:Irena Ciodyk-ZemirliHead of Trade & Supply Chain Financeirena.ciodyk-zemirli@seb.plTel: +48 22 395 8112Contact Singapore:Monica LimHead of Trade & Supply Chain Financemonica.lim@seb.seTel: +65 6223 5644Contact United Kingdom:Mark CooperHead of Trade & Supply Chain Financemark.cooper@seb.co.ukTel: +44 20 7246 4440Contact United States:Alan PalmerHead of Trade & Supply Chain Financealan.palmer@sebny.comTel: +1 212 9074807Contact China:Juliette Xue LascouxHead of Trade & Supply Chain Financejuliette.lascoux@seb.seTel: +86 21 5396 6153Contact Germany:Hans-Ulrich OesterreichHead of Trade & Supply Chain Financehans-Ulrich.oesterreich@seb.deTel: + 49 969 250 5146Contact Norway:Stein AaroHead of Trade & Supply Chain Financestein.aaro@seb.seTel: +47-22826657158 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYSNR DentonOne Fleet PlaceLondon EC4M 7WSUnited KingdomT +44 (0)20 7242 1212F +44 (0)20 7246 7777DX242Company profileSNR Denton is a client-focused international legal practice delivering quality andvalue. We serve clients in key business and financial centers from 48 locations in 32countries, through offices, associate firms and special alliances across the US, UK,Europe, the Middle East, Russia and the CIS, South-East Asia, and Africa, makingus a top 25 legal services provider by lawyers and professionals worldwide.Joining the complementary top tier practices of its founding firms –Sonnenschein Nath & Rosenthal LLP and Denton Wilde Sapte LLP – SNRDenton offers business, government and institutional clients premier service and adisciplined focus to meet evolving needs in eight key industry sectors: Energy,Transport and Infrastructure; Financial Institutions and Funds; Government;Health and Life Sciences; Insurance; Manufacturing; Real Estate, Retail andHotels; and Technology, Media and Telecommunications.Main Trade Finance contactsGeoffrey WynneHead of Trade & Export Finance groupLondonT +44 (0)20 7246 7050geoffrey.wynne@snrdenton.comJonathan SolomonPartnerLondonT +44 (0)20 7246 7112jonathan.solomon@snrdenton.comMatthew CoxPartnerSingaporeT +65 6532 6506matthew.cox@snrdenton.comRicardo S. MartinezPartnerNew YorkT +1 212 768 6858ricardo.martinez@snrdenton.comSimon CookPartnerDubaiT +971 4405 4313simon.cook@snrdenton.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 159

DIRECTORYInternational contactsPaul JarvisPartnerAbu DhabiT +971 2612 9401paul.jarvis@snrdenton.comJoel BenjaminPartnerAlmaty (Kazakhstan)T +7 727 258 1950joel.benjamin@snrdenton.comSafwan MoubaydeenSafwan Moubaydeen Law Firm inassociation withSNR DentonAmman (associate office)T +962 776 776 766safwan.moubaydeen@snrdenton.comMarla ValdezPartnerAshgabat (Turkmenistan) & Tashkent(Uzbekistan)T +7 727 258 1950marla.valdez@snrdenton.comChris AylwardPartnerBahrainT +973 1710 2591christopher.aylward@snrdenton.comElias ChedidChedid Law OfficesBeirut (associate firm)T +961 161 5850elias.chedid@chedidlaw.comMartin BrownPartnerDohaT +974 496 7951martin.brown@snrdenton.comMichael LaceyPartnerEgypt (SNR Denton office)T +202 2735 0574michael.lacey@snrdenton.comDavid PfeifferThe Law Offices of Dr Ahmad Al-Samdanin association with SNR DentonKuwait (associate office)T +965 2252 0833david.pfeiffer@snrdenton.comMyles MantlePartnerMoscowT +7 495 916 9636myles.mantle@snrdenton.comPaul SheridanPartnerMuscatT +968 2457 3023paul.sheridan@snrdenton.comE. Lee SmithPartnerNew YorkT +1 212 768 6938lee.smith@snrdenton.com160 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYInternational contacts continuedTrade related SNR Denton contactsStephen S. KudenholdtPartnerNew YorkT +1 212 768 6847stephen.kudenholdt@snrdenton.comStephen WhelanPartnerNew YorkT +1 212 768 5333stephen.whelan@snrdenton.comSena AgbayissahPartnerParisT +33 (0) 1 53 05 1657sena.agbayissah@snrdenton.comAmgad HuseinThe Law Firm of Wael A. Alissa inassociation with SNR DentonRiyadh (associate office)T +966 1 200 8678amgad.husein@snrdenton.comEgor NoskovDuvernoix Legal (associate firm)St PetersburgT +7 812 702 6200egor.noskov@duvernoix.ruRichard de BelderPartnerIslamic Finance – LondonT +44 (0)20 7246 7326richard.debelder@snrdenton.comRichard CairdPartnerFinancial Markets Disputes Group –LondonT +44 (0)20 7246 7262richard.caird@snrdenton.comMarian BoylePartnerInsurance – LondonT +44 (0)20 7320 6918marian.boyle@snrdenton.comJeremy CapePartnerTax – LondonT +44 (0)20 7320 3845jeremy.cape@snrdenton.comTom EldridgePartnerProject Finance – LondonT +44 (0)20 7246 7456tom.eldridge@snrdenton.comNigel BarnettPartnerRestructuring & Insolvencies –LondonT +44 (0)20 7320 5530nigel.barnett@snrdenton.comTRADE FINANCE The Guide to Global Trade Finance Markets 2011 161

DIRECTORYAfrican associate firmsHadj-Hamou/Djouadi –Sid Ali Hadj-HamouAlgeriaT +213 (21) 239 344shadjhamou@assila.netMkono & Co –Gilbert NyatanyiBurundiT +257 2225 6219/20gilbert.nyatanyi@mkono.co.biBentsi-Enchill & Letsa –Kojo Bentsi-EnchillGhanaT +233 21 221171kojo.bentsi-enchill@beonline.orgHamilton Harrison & Mathews –Paras ShahKenyaT +254 20 3258000pshah@hhm.co.keTumi Law firm –Dr TumiLibya (associate firm)T +218 (21)333 2144/2297/9024Trust Law Chambers –Richard MugishaRwandaT +250 503075rmugisha@trustchambers.co.rwGlyn Marais Inc –Willem de VillersSouth AfricaT +27 (0) 11 286 3700wdevillers@glynmarais.co.zaMkono & Co. –Wilbert KapingaTanzaniaT +255 22 211 4664wilbert.kapinga@mkono.comKampala Associated Advocates –David MpangaUgandaT +256 41 344123advocates@kaadvocates.co.ugCorpus Legal Practitioners –Charles MkokwezaZambiaT +260 211 235 479/203cmkokweza@corpus.co.zmNew associate firms under negotiation in Botswana, Mauritania, Mauritius,Morocco, Namibia, Angola, Cape Verde, Guinea Bissau, Mozambique,São Tome e Principe and Portugal.Please refer to: www.snrdenton.com for further ongoing updates.162 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYSociété GénéraleTours Société Générale17, cours valmy, La défense 792800 Puteaux, FranceTel: + 33 (0)1 42 14 20 00Tel: + 33 (0)1 42 13 60 00www.societegenerale.comSociété Générale is one of the largest financial services groups in the euro zone.The Group is present worldwide in three key businesses:• Retail Banking, Specialised Financing & Insurance which serves morethan 32 million individual customers worldwide.• Private Banking, Global Investment Management & Services which isone of the largest banks in the euro zone in terms of assets under custody(a3,073 billion, December 2009) and under management (a344 billion,December 2009).• Corporate & Investment Banking which tailors solutions for its clientsacross sectors by capitalising on its worldwide expertise in investmentbanking, global finance, and global markets.Our mission: to stand by our clientsAs bankers, our purpose is to stand by our clients and serve the banking andfinancial needs of each and every one of them. The day after day objective of our157,000 employees is to work alongside our 32 million clients in 83 countries.Natural Resources & Energy FinanceThe Natural Resources & Energy Financing Group provides a full range offinance structures and solutions for producers, traders, processors and end-users ofmetals, energy, grain and tropical commodities products through four keyplatforms:• Project & Reserve Based Financing for the energy sector;• Structured Commodity & Mining Finance for emerging marketcommodity players as well as small and medium size mining clients toindustry leaders;• Trade & Commodity Finance for commodity players in non-emergingcountries with a special focus on trading companies;• Russia & CIS platform for regional coordination in the energy and metalssectors.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 163

DIRECTORYExport FinanceThe Export Finance Group delivers solutions, risk covers and advisory servicesrelated to import or export contracts of which underlying assets are capital goods,equipment and/or services. SG CIB is able to offer tailored solutions tocompanies and financial institutions around the world. Best Export FinanceArranger for the ninth consecutive year, our expertise relies on the extensiveSociété Générale network, providing highly valued and professional support to allour clients. ECA-backed deals are a reliable source of long-term financingsolutions, benefiting from our well established relationships to make the differencein Export Finance!Trade FinanceThe Trade Finance Group provides a complete range of trade products andservices to help corporates secure and finance their international transactions. SGoffers traditional trade services products such as guarantees and letters of credit, aswell as structured trade solutions capitalizing on the Export Finance expertise ofSG CIB.With an international trade network covering 58 countries, we have developedreal expertise in Global Trade Services and our clients enjoy a privilegedrelationship with the SG Group throughout the world.Worldwide Leadership (Trade Finance Magazine, March and June 2010)• Best Export Finance Arranger• Best Commodity Finance Bank• Best Energy Finance Bank• Best Metals Finance Bank• Best International Trade Bank in Russia• 2nd Best DFI Finance Arranging Bank• 2nd Best Structured Trade Finance Institution• 2nd Best Trade Bank in Eastern Europe & CIS• 2nd Best Trade Bank in Europe• 3rd Best Softs Finance Bank• 3rd Best Short-term Trade Finance Bank• 3rd Best Trade Bank in sub-Saharan Africa164 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYSeveral Trade Finance Magazine 2009 Deals of the Year• IBA Mitaki Windpark (Azerbaijan)• TORM (Singapore)• Norb VIII & IX (Brazil)• Eurocopter (Brazil)• Embratel (Brazil)• Takoradi (Ghana)• Hansen Wind Energy (China)• Hyundai (Russia-Korea)• Vyksa Steel Works (Russia):• TRC Trading Company (US)• Tatneft (Russia)• Lukoil (Russia)• Cocobod (Ghana)• EGPC (Egypt)• Noble (Hong Kong)• SONORA (Cameroon)• Sonangol (Angola)• SNIM Guelb (Mauritania)• NLMK (Russia)• PNG LNG (Papua New Guinea)Contacts:Federico TureganoGlobal Head of Natural Resources &Energy Financingfederico.turegano@sgcib.comTel: +33 1 57 29 11 28Dominique BerettiDeputy Global Head of NaturalResources & Energy Financingdominique.beretti@sgcib.comTel: +44 207 762 4217Jerome JacquesDeputy Global Head of NaturalResources & Energy Financingjerome.jacques@sgcib.comTel: +33 1 58 98 56 84Denis Stas de RichelleGlobal Head of Export Financedenis.stas-de-richelle@sgcib.comTel: +33 1 42 14 31 95Mark HowardDeputy Global Head of Export Financemark.howard@sgcib.comTel: +33 1 42 14 14 59Thierry RoehmGlobal Head of Trade Financethierry.rhoem@socgen.comTel : + 33 1 42 14 77 84Olivier Prod HommeHead of Correspondant Banking andInternational Networkolivier.prodhomme@socgen.comTel : +33 1 42 14 94 08TRADE FINANCE The Guide to Global Trade Finance Markets 2011 165

DIRECTORYSwiss ReMythenquai 50/60PO Box8022 ZurichSwitzerlandT: +41 43 285 2121F: +41 43 285 2999www.swissre.com/btiSwiss Re’s Bank Trade and InfrastructureSwiss Re is one of the world's largest and most diversified reinsurers. Our broadglobal insurance capabilities are tailored to help clients mitigate their mostcomplex risks. Swiss Re has among the highest available capacity in the industry.Founded in Zurich, Switzerland in 1863, Swiss Re has offices in more than 25countries.Swiss Re’s Bank Trade and Infrastructure (BTI) team works together with banksand financial institutions to develop efficient and innovative solutions that fit yourspecific capital management needs and those of your clients. We combine SwissRe’s considerable risk expertise and resources with our team’s specializedknowledge in assessing complex financial structures to develop solutions tailoredto meet your needs. Our risk sharing solutions are based upon our commitmentto building long-term relationships with mutual benefits and understanding. Tolearn more about us, visit www.swissre.com/bti.BT&I overview• Offers alternative capacity to leading trade and project finance banks• Provides a unique, non-competing distribution channel• Delivers innovative solutions combining insurance and banking tools• Utilizes an interactive platform for transaction efficiency and speed ofexecution• Focus areas:– Documentary Trade Finance– Structured Commodity & Trade Finance– Project Finance166 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYStrong track record by a professional team• +7,000 single transactions closed with leading banks• Facultative and treaty contracts in place• Brings deep understanding of local and global markets• Locations: Zurich, Munich and Sao PauloGlobal contactsAndreas HillebrandDirectorHead of Swiss Re’s BTI+41 43 285 5860andreas_hillebrand@swissre.comAsia contactAzman NooraniVice President+41 43 285 6359azman_noorani@swissre.comVolker HandrichDirectorTrade, Export and Supply Chain Finance+49 89 3844 3345volker_handrich@swissre.comAndreas SeubertVice PresidentStructured Commodity, Trade andProject Finance+41 43 285 6205andreas_seubert@swissre.comFor more information on Swiss Re’s Bank Trade and Infrastructureteam and capabilities, visit us at www.swissre.com/btiBTI solutions are offered globally, but only available in the United States through licensed surplus lines brokers. Thisinformation is provided for general information purposes and does not constitute an offer to sell or a solicitation.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 167

DIRECTORYUralsib Bank8 Efremova StreetMoscowRussia119048Tel. +7 (495) 705-90-39www.uralsib.comUralsib Bank is the core company of Financial Corporation URALSIB(www.uralsib.com) - one of the largest Russian private financial groups, offering awide range of financial services including retail and corporate banking, investmentbanking, leasing, brokerage, custody services, asset and wealth management, etc.Uralsib Bank was one of the pioneers that have been offering trade financeservices to clients in Russia in a post-Soviet era, since early 1990s. The experienceand wide foreign partner base that we gained since then do help us very much inmaintaining a stable quality of the products that we offer and efficiently meetclients requirements. Experienced team and strong reputation were the key factorsthat let Uralsib Bank win the 2008 Trade Finance Magazine Best Export FinancingDeal award for the a40 million Finnvera-backed 5-year export-finance facilityarranged in December 2008.ContactsAnton ZurExecutive DirectorInternational Business DepartmentTel.: +7 (495) 723 7095Fax: +7 (495) 705 9060Anton.Zur@uralsib.ruEldar ValievHead of Short Term Trade FinanceInternational Business DepartmentTel.: +7 (495) 705-90-39 (ext. 2596)Fax: +7 (495) 705-90-60Eldar.Valiev@uralsib.ruDmitri LebedevSenior Vice-President,Head of Trade FinanceInternational Business DepartmentTel: +7 (495) 788 6165Fax: +7 (495) 705 9060D.Lebedev@uralsib.ruDenis DodonChief TF ManagerMedium-Term Trade FinanceInternational Business DepartmentOJSC BANK URALSIBTel: +7 (495) 705-90-39 ext. 28-46Denis.Dodon@uralsib.ru168 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

DIRECTORYZURICHInsurance Solutions for Emerging Marketswww.zurich.comThrough its Surety Credit and Political Risk unit, Zurich provides political riskinsurance, medium-term trade credit insurance, and excess of loss short termcredit insurance to help reduce the risks that infrastructure developers,multinational corporations, investors, exporters and international financialinstitutions face in emerging markets worldwide.Zurich collaborates with private insurers, multilateral agencies, internationalbanks and other organizations worldwide to help optimize policy terms, capacityand flexibility for clients. Zurich is an active member of the International Unionof Credit and Investment Insurers (the “Berne Union”), an internationalorganization composed of state-linked and privately owned insurance companies.Zurich provides insurance and risk management solutions for emerging marketsfrom headquarters in Washington, D.C., and offices in New York, Miami,Barcelona, Beijing, Frankfurt, Hong Kong, London, Paris, Sao Paulo, Singapore,Sydney, Tokyo and Zurich.ContactsMichael BondExecutive Vice PresidentSurety, Credit and Political RiskTel: +1 202 585 3101michael.bond@zurich.comGerald F. Haley, CPCUSenior Vice PresidentTel: +1 410 559 8723gerald.haley@zurichna.comAnne Marie ThurberManaging Director - Political Riskand Trade CreditTel: +1 202 585 3104annemarie.thurber@zurich.comThis is intended as a general description of certain types of insurance and services available to qualifiedcustomers through the companies of Zurich in North America. Your policy is the contract thatspecifically and fully describes your coverage. The description of the policy provisions gives a broadoverview of coverages and does not revise or amend the policy.Insurance coverages are underwritten by individual member companies of Zurich in North America,including Zurich American Insurance Company. Certain coverages are not available in all states.Some coverages may be written on a surplus line basis through licensed surplus lines brokers.© 2010 Zurich American Insurance CompanyTRADE FINANCE The Guide to Global Trade Finance Markets 2011 169

The global information sourcefor trade, supply chain, commodityand export finance marketsThrough close contact with those activein the sector, Trade Finance is able tobring you critical news not found elsewhere.Turn our news, knowledge and insightto your advantage with essentialinformation and detail on the globaltrade, export and commodity financemarkets – intelligence vital to exporters/importers, financiers, insurers and otherservice providers.As a subscriber you will benefit from:➨ Trade Finance magazine delivereddirectly to your desk, enabling you toplan your strategies or cooperativeinitiatives with reviews and analysis ofcurrent deals (in negotiation, in processor signed).➨ Full online access towww.tradefinancemagazine.comincluding our fully searchable archivedating back to 1999.➨ Email alerts customisable by regionor sector sent directly to your mobileor PC so you receive the news thatinterests you, keeping you ahead ofyour peers.➨ Trade Finance e-news: A weekly roundupkeeping you informed of all the latestnews in the industry and highlighting thetop stories.➨ All published supplementsSubscribe toTrade Financetoday ➨Start your subscription to Trade Finance byfilling in the form at the back of the directory,or by visiting our website:www.tradefinancemagazine.comAlternatively call our subscriptionsHotline on: +44 (0) 20 7779 8999 (UK)or +1 212 224 3570 (Americas).Quoting code 766We look forward to welcoming you as asubscriber.

GLOSSARYGlossaryACCEPTANCEThe beneficiary presents its documents together with a bill ofexchange payable at a future date stipulated in the credit. The bankaccepts the bill of exchange by signing it, and returns it to thebeneficiary. Acceptance of a draft obliges the acceptor to pay it atmaturity.ACCOUNTS PAYABLEA current liability representing the amounts owed to creditors formerchandise or services purchased on open account or shorttermcredit.ACCOUNTS RECEIVABLEThe amount of money a business expects to receive formerchandise or services furnished by it to others on openaccount.ADVANCE COMPENSATIONA forward purchase.ADVANCE PAYMENT GUARANTEE/BONDA guarantee or bond provided by a bank to the buyer. Theguarantee/bond undertakes to return to the buyer on behalf of thesupplier, usually on demand, downpayments or progress paymentsmade if the supplier fails to complete the contract.ADVISING BANKA bank in the beneficiary’s country - usually a correspondent ofthe issuing bank - through which the issuing bank communicatesthe credit to the beneficiary. It may also be asked to confirmand/or pay the credit.AGENCY FEEAn annual fee payable by the buyer, usually to cover the costsincurred by the lender in administering the financing.AGIOThe price increase over and above the market price of the tradedgoods and attributable to the extra costs involved incountertrading.AMENDMENTAny change made to the terms of a credit. The applicant initiatesthe amendment which then follows the same process as a letter ofcredit.AMORTIZATION1. The provision to pay a debt over a period of time.2. The gradual repayment of borrowings in a series of instalments.3. A transaction or security where the principal reduces over thelife of the agreement.4. The writing off or reduction in value of an intangible asset overtime (c.f.depreciation)5. Allocation of the cost of an asset over itsestimated useful life.APPLICANTThe buyer who applies for a letter of credit.ARBITRAGEA method of taking advantage of the fact that there may bedifferent prices in different markets for identical goods such asgold, foreign exchange or commodities. Simultaneously, one buys inthe lower price market and sells in the higher one.ASSIGNMENT OF POLICYThe assignment of a policy’s rights and benefits from the exporterto a lender.AVAILABILITYThe date by which a set of documents has to, or will, be deliveredto the forfaiter ready for discounting.AVALAn unconditional, irrevocable, divisible and freely transferableguarantee to pay the beneficiary on the due date.AVALISING BANKA bank in an importer’s country which adds its aval to notes orbills in a forfaiting transaction.AVALORAn institution or person acting as a guarantor.AVERAGE LIFEAn evaluation of the average time an asset will be outstandinggiven a specific repayment system.BACK-TO-BACK LETTER OF CREDITTwo letters of credit normally involving the same bank whichcover a single shipment of goods, involving a middleman. Thesecond letter of credit is issued only because its issuing bank ishappy that the first letter of credit represents good security. Inpractice this can be hazardous and many banks are unwilling to beinvolved in back-to-back transactions.BANK GUARANTEEAn indemnity letter in which the bank commits itself to pay acertain sum if a third party fails to perform or if any other form ofdefault occurs. One use is when a bank wants a carrier to release ashipment which it has financed but the original bills of lading arenot yet available for surrender to the carrier.BARTERGoods and/or services are exchanged against other goods and/orservices of equivalent value. No money changes hands betweenthe buyer and seller. (See countertrade).BASIS POINTOne hundredth of one percentage point (0.01%). 100 basispoints = 1%.BENEFICIARYThe person (for example, the exporter) in whose favour the creditis issued.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 171

GLOSSARYBERNE UNIONThe Berne Union is the leading association for export credit andinvestment insurance worldwide, working for cooperation andstability in cross-border trade and providing a forum forprofessional exchange among its members.BID BONDA bond provided by a bank to the buyer promising compensation,usually on demand, in the event that a supplier declines to enterinto a contract in conformity with the bid he has put forward.BILATERAL CLEARING ACCOUNTA trading agreement between two countries, neither of which hasa hard currency, in which transactions are entered in clearing unitsinstead of a fixed currency.BILL OF EXCHANGEAn unconditional order in writing addressed by one person toanother, signed by the person creating it (drawer), and requiringthe addressee (drawee) to pay a certain sum of money to thedrawer at a fixed or determinable future time .BILL OF LADINGIssued by a shipping company to the shipper as a receipt for thegoods, a memorandum of the contract of carriage and a documentof title.BUY-BACKAn agreement to buy products that will eventually be produced bythe capital equipment supplied under the export sales agreement.BUYER CREDITA financing arrangement under which a lending bank in thesupplier’s country lends directly to the buyer or to a bank in thebuyer’s country to enable the buyer to make payments due to thesupplier under a contract.BRIDGE FINANCINGInterim financing replaced by an ECA-backed or pre-exportfinance solution.CAPITAL GOODS1. Durable goods which are used to produce other goods forconsumption: for example machinery, equipment, buildings2. Also, material used or consumed to produce other goods.CAPITAL MARKETThe market for long term investment funds in the form of stocks,bonds, commercial paper etc.CARRIAGE AND INSURANCE PAID TO (CIP)The seller delivers the goods into the custody of the carrier andpays for the costs of carriage to the agreed destination. He alsoeffects insurance of the goods at his own cost. The goods travel atthe buyer’s risk.CARRIAGE PAID TO (CPT)The seller delivers the goods into the custody of the carrier andpays for the costs of carriage to the agreed destination. The goodstravel at the buyer’s risk.CASE OF NEEDThe person or firm to whom collecting banks will refer ifinstructed to do so by collection orders in case of difficulty. Thepowers of case of need may be advisory only or full and must bespecified.CLAIMING BANKThe bank entitled to claim reimbursement of sums it has paid inrespect of a payment, deferred payment, acceptance or negotiationthat it has carried out under the credit.CLEAN COLLECTIONA collection comprising financial documents only, not goods.CO-FINANCINGLoans made by a financial institution, such as an export creditagency or a commercial bank, in association with the World Bankor other multilateral development banks.COLLECTIONSThe provision by a bank of a service to a customer allowingdocuments proving shipment of customers’ goods to betransmitted via itself and another bank to the buyer of the goods.The release of documents to the buyer, thereby giving him title tothe goods, is normally dependent upon payment by him or thepromise to pay.COLLECTING BANKThe bank in the buyer’s (drawee’s) country to whom the collectionorder and documents are directed.COLLECTING ORDERThe set of instructions given to the remitting bank by the principalin a transaction. The remitting bank relays the collecting order tothe collecting bank.COMMERCIAL INTEREST REFERENCE RATE(CIRR)A market rate for the currency concerned plus a margin, set underthe Consensus to establish fixed interest rates which are officiallysupported.COMMERCIAL LETTER OF CREDITA name sometimes given to a variant of documentary credit underwhich the credit is negotiable by any bank. The issuing bankrequires all drawings to be noted on the credit document.COMMERCIAL RISKThe possibility of non-payment arising from commercial causessuch as bankruptcy, insolvency, protracted default and/or failure toaccept goods that have been shipped according to the supplycontract.COMMISSIONINGThe date on which the plant or equipment supplied is deemedcontractually to have been completed according to specification.COMMITMENT FEEA fee, payable usually on a semi-annual or quarterly basis, by thebuyer to reserve the availability of a loan. The fee is payable on theundrawn balances.172 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

GLOSSARYCOMPENSATIONA single agreement under which the exporter agrees to supplygoods and services in exchange for goods and services of anequivalent value supplied by the importer, which the exportermust then sell to finance his original sale.COMPREHENSIVE COVERAGEExport credit insurance or guarantee which covers bothcommercial and political risks.CONCESSIONA grant or licence by a government or relevant authority ofcertain land, premises or other public property, or the right to useor commercially exploit such assets for a specified time.CONFIRMINGThe practice by advising banks of adding their separateundertakings to those of issuing banks and assuming liability underdocumentary letters of credit.CONFIRMING BANKA bank which adds its own independent payment undertaking tothat of the issuing bank. The confirming bank is normally in thebeneficiary’s country. The confirmation protects the beneficiaryagainst the issuing bank defaulting, and political risk with regard tothe country in which the issuing bank is situated.CONSENSUSAn arrangement between OECD (see OECD) member countrieswhich sets the guidelines, including maximum repayment termsand minimum interest rates, for officially supported export credits.CONSIGNEEThe drawee (importer) in a collection.CONSTRUCTIVE DELIVERYThe process of handing an applicant the documents in adocumentary credit.COST AND FREIGHT (CFR)The seller delivers the goods to the ship. Full risk and responsibilitypass to the buyer when the goods cross the ship’s rail. The sellerpays for the contract of carriage to the agreed port of destination.COST INSURANCE AND FREIGHT (CIF)The seller delivers the goods to the ship. All risks and responsibilityin the goods pass to the buyer when the goods cross the ship’s rail.The seller pays for the contract of carriage to the port ofdestination and takes out cargo insurance at his own cost.COUNTER CREDITA variation of back-to-back credit in which a second bank (usuallythat of the original beneficiary) issues a separate documentaryletter of credit in favour of the second beneficiary.COUNTER-INDEMNITYAn exporter’s irrevocable commitment to repay the bank if a bondis called.COUNTERPURCHASETwo separate agreements under which the buyer agrees to buyand pay for goods and the seller agrees to buy and pay for goods ofa (usually) equal value.COUNTERTRADEAn umbrella term referring to a growing number of trading andfinancing techniques in which payment is made either wholly orpartly in the form of goods. (See barter.) .CREDIT APPLICANTThe bank’s customer who requests the issue of the credit. Forexample, in the case of an export sale, the importer.CREDIT INSURANCEInsurance provided in exchange for a premium covering the lossincurred by a supplier in the case of non-payment by the supplier’scustomer, due to the customer’s legal or de facto insolvency orsimple failure to honour its commitments (default), or for politicalreasons or as a result of force majeure.CREDIT RISKRisk that the insured will be unable to recover all or part of thereceivable due to the occurrence of a cause of loss.CUSTOMS GUARANTEEA guarantee providing cover against possible customs duties. It isoften used when goods are imported into the country on atemporary basis. If the goods are not reexported within theprescribed time limit the customs authorities can claim under theguarantee for the customs duties which subsequently becomepayable.DAYS OF GRACEReferred to in forfaiting, days of grace reflect the delay normallyexperienced in the transmission of payments applicable to thecountry risk involved. To calculate net proceeds this grace period isadded to the actual number of days until the respective debtinstrument matures.DEFERRED LETTERS OF CREDITA credit providing for payment at a determinable future datefollowing the presentation of documents which do not include adraft.DEFERRED PAYMENTThe credit sum is payable at a stipulated period of time afterpresentation of documents.DELIVERED AT FRONTIER (DAF)The seller fulfils his obligation to deliver when the goods have beenmade available, cleared for export at an agreed point and placed atthe frontier but before the customs border of the adjoiningcountry. This term is primarily intended for cases where goods areto be carried by rail or road, though it may be used for any modeof transport.DELIVERED DUTY PAID (DDP)The seller fulfils his delivery obligation when the goods have beenmade available at the agreed place in the country of import.The seller bears all risks and costs in the goods up to that point.The agreed point of delivery may, for example, be the buyer’swarehouse or factory. This term represents the maximumobligation on the seller.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 173

GLOSSARYDELIVERED DUTY UNPAID (DDU)The seller fulfils his obligation to deliver when the goods have beenmade available at the agreed place in the country of import. Therisk in the goods passes to the buyer at that point and he isresponsible for clearing the goods through customs.DELIVERED EX-QUAY (DUTY PAID)The seller fulfils his obligation to deliver when he has made thegoods available to the buyer on the quay or wharf at the namedport of destination cleared for import.DELIVERED EX-SHIP (DES)The seller fulfils his delivery obligation when the goods have beenmade available to the buyer on board the ship at the agreed portof destination. The risk in the goods passes to the buyer at thatmoment and the buyer is responsible for clearing the goodsthrough customs.DEMURRAGEA form of rent charged on undeclared goods by, for example, shipowners or port authorities. Also charged by container owners onboxes delayed.DEVELOPMENT BANK or DEVELOPMENTFINANCE INSTITUTION (DFI)A lending agency that provides assistance to encourage theestablishment of productive facilities in different countries.DIRECT PAYMENTPayments due from the buyer to the supplier in cash during thecontractual period, which are not eligible for financing under abuyer or supplier credit financing.DISCOUNT RATEThe rate by which the future value of a negotiable instrument isdiscounted. The discount rate is generally calculated as either adiscount-to-yield or straight discount.DISCOUNT-TO-YIELDThis expresses the discount rates as a true interest cost, usually ona yearly basis. Maturities over 180 days are mostly subject to semiannualcompounding. The discount-to-yield calculation is the yielda present value will achieve as it reaches its future value (facevalue) at maturity.DISCOUNTED BILLAn accepted draft against which a loan is made and the interest isdeducted immediately.DISCOUNTINGBuying accepted term bills of exchange at a discount to allow forloss of interest on the funds until the bills mature.DISCREPANCYWhen documents presented do not agree with the terms of thecredit or with each other.DISHONOURThe refusal to pay or accept a bill of exchange.DOCUMENTARY COLLECTIONA collection concerning goods and entailing commercialdocumentation.DOCUMENTARY CREDITA letter of credit that calls for the presentation of specifieddocuments, issued to effect payment during a business transaction.It usually provides exporters with an independent bank promise ofpayment against presentation of shipping documents.DOCUMENTS AGAINST ACCEPTANCE (D/A)Where payment is to be made on documents against acceptance(D/A) terms, the presenting bank releases the documents to theimporter against his acceptance of a bill of exchanges. Sometimesthe buyer must sign a promissory note. The importer gainspossession of the goods before making payment and can sell thegoods immediately to get funds to pay the bill of exchange, therebyobtaining a period of credit. Payment terms are usually between30- to 180-days after sight.DOCUMENTS AGAINST PAYMENT (D/P)Where payment is to be made on documents against payment(D/P) terms, the presenting bank is authorISed to release thedocuments to the importer only against immediate cash payment.DOWNPAYMENT(Sometimes referred to as an initial direct payment.) The paymentdue from the buyer to the supplier in cash before entry into forceor effectiveness of the contract. (Usually ineligible for exportcredit agency support.) .DRAFTSee bill of exchange.DRAWDOWN PERIODThe period during which the financing is available to be drawn.DRAWEEThe party on whom a bill of exchange is drawn and which owesthe indicated amount. In a collection this is the buyer.DRAWERThe party that issues or signs a bill of exchange and stands toreceive payment from the drawee.EQUIPMENT BONDSSometimes under projects such as construction contracts thebuyer or employer buys and delivers the necessary equipmentinstead of making the contractor an advance cash payment. Theissuance of equipment bonds may cover the transaction.ESCROW ACCOUNTA bank account set up in hard currency in the joint names of thebuyer and seller and in which the various monies involved in thecountertrade agreement (usually a forward purchase) are held intrust.EVIDENCE ACCOUNTSA record of all imports and exports by the parties involved in anagreement that over a fixed period of time a specific ratio of salesto purchase must be achieved.EXCHANGE CONTROLSRestrictions that are applied by a country’s monetary authority, orcentral bank, to limit the convertibility of the local currency intoother specific foreign currencies.174 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

GLOSSARYEXPORT CREDITA loan to help the financing of the sale of capital goods and/orservices eligible for a minimum repayment period of two years,which is officially supported under the OECD Consensus.EXPORT CREDIT AGENCY (ECA)The organISation which provides official support to facilitateexports from its country. Its main function is to provide insuranceagainst the commercial and political risk of non-payment for theexports. Commercial risk cover includes eventualities such as thebuyer going into liquidation. Political risk cover includes theeventuality of war, or a change in the importing government’sforeign exchange controls which might prevent the importer fromeffecting payment. Some export credit agencies provide insurancecover only; others provide both insurance and medium- and longtermfinance for capital goods. For a full list of the ECAs see TradeFinance’s annual World Official Agency Guide.EXPORT FINANCEThe provision by government or privately-owned companies offinancial help to exporters designed to encourage the export ofgoods. The help may be via the insurance of export receivablesand/or guarantees/insurance of export-related loans. Exportfinance applies to large transactions where credit over a period ofyears is required. Export finance is required when an importerneeds deferred payment terms for the product or services that anexporter seeks to provide.EXPORT FINANCE LEASESometimes referred to as full payment leases. Such leases arewritten on a net basis with taxes, insurance and maintenance paidfor by the lessee. The lease may include an option for the lessee tobuy the item at the conclusion of the lease term at a nominal valueof the equipment.EXPORT OPERATING LEASEA lease which exchanges the right to use property over a specificlimited time period in return for a series of rental payments. Theowner or lessor pays any taxes, any insurance and any maintenancecharges but also retains the tax benefit of any depreciation and anyinvestment tax credits.EXPROPRIATION RISKRisk of loss of an investment due to expropriation, nationalISation,or confiscation by a foreign government. This risk is typicallycovered by political risk insurance.FACTORINGThe purchase from a company of some or all of its tradereceivables with or without recourse to the company itself in theevent that the receivables are unpaid. The service may also involveadministration of the sales ledger for the company.FATINGQuerying the status of a collection in relation to the exporter’sinstructions to the remitting bank.FINAL DELIVERYThe date on which final delivery is effected.FINAL MATURITYThe date on which the final repayment of principal is due.FIXED PRICEA fixed sum agreed at the outset of a contract, payable by thebuyer for a specified task (also referred to as lump sum).FIXED RATEAn interest rate fixed throughout a set period of the loanfinancing.FLOATING RATEAn interest rate usually consisting of a variable market rate plus afixed margin.FORCE MAJEUREEvents over which none of the parties to a transaction has controlor influence (acts of God).FORFAITINGThe purchase (without recourse to any previous holder of thedebt instrument) of negotiable trade instruments resulting fromthe export of goods and services.FORWARD PURCHASEA compensation agreement under which the buyer’s goods aredelivered to the exporter in advance to enable him to raise theforeign exchange to pay for his own sale.FREE ALONGSIDE SHIP (FAS)The seller places the goods alongside the vessel on the quay or inlighters at the named port of shipment. The buyer bears all costsand risks of loss and damage from that moment.FREE CARRIER (FCA)The seller hands over the goods cleared for export to a carriernamed by the buyer at the place agreed by the buyer and the seller.The buyer is responsible for the contract of carriage and all otherformalities.FREE ON BOARD (FOB)The seller delivers the goods to the ship and he is considered tohave fully carried out his side of the bargain when the goods passover the ship’s rail. The buyer bears full responsibility from thatmoment onwards.FRONT END FINANCE (DOWNPAYMENTFINANCING)A commercial loan under which separate credit facilities areprovided to finance the downpayment and/or other directpayments not covered under a buyer or supplier credit financing.GRACE PERIODThe period during which no repayments of principal (or principaland interest) are due from borrowers to lenders.GREEN CLAUSEA form of credit where the goods awaiting shipment are requiredto be stored in the advising bank’s name.HEDGINGReducing or mitigating risk, for example protecting against adverseforeign-exchange movement.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 175

GLOSSARYICC (International Chamber of Commerce)The voice of world business championing the global economy as aforce for economic growth, job creation and prosperity.Because national economies are now so closely interwoven,government decisions have far stronger internationalrepercussions than in the past.ICC activities cover a broad spectrum, from arbitration anddispute resolution to making the case for open trade and themarket economy system, business self-regulation, fightingcorruption or combating commercial crime.IJARAIslamic leasing. An ijara or lease financing involves the Islamicinvestor (or a special purpose vehicle) purchasing an asset andleasing it to the lessee for a rent that is either agreed in advance oradjusted regularly throughout the lease period, by consent, byreference to an “expert” or, in some cases, by reference to aninterest-based index.An ijara is an operating lease with the lessor retaining ownershipof the asset after the lease expiry but can be turned into a higherpurchase arrangement by the grant of an option for the lessee topurchase the asset on a specified date (ijara-wa iqtina). Shari’ausually requires that the management, maintenance and insuranceof the leased assets are the responsibility of the lessor so as tojustify the profit made by the lessor, although mechanisms exist forthe responsibility for these to be effectively passed back to thelessee.IMFThe International Monetary Fund (IMF) is an organISation of 185countries, working to foster global monetary cooperation, securefinancial stability, facilitate international trade, promote highemployment and sustainable economic growth, and reducepoverty around the world.INCOTERMSAn ICC published set of rules which define the responsibilities ofbuyers and sellers concerning who pays which expenses in thetransit of goods from seller to buyer, over and above the originalcost of the goods.INDEMNITYAn undertaking issued by a beneficiary or his bank to reimburse asettling bank if the applicant rejects the documents.INTEREST DURING CONSTRUCTION (IDC)(Pre-commissioning interest.) Interest payments due during theperformance of the supply contract, which might be capitalISedand added to the principal amount outstanding.INTEREST MAKE-UP AGREEMENT (IMU)An arrangement whereby a fixed rate loan is officially supportedso that the lenders receive an agreed margin over the cost of thelending.INTEREST RATEThe rate at which interest is payable on any obligation.IRREVOCABLE CREDITThe issuing bank and any confirming bank undertake an irrevocablepayment obligation towards the beneficiary. The undertakingcannot be cancelled or amended unless the beneficiary agrees.ISLAMIC FINANCEIslamic finance is based on the principle that money must neverspontaneously generate money. Instead, capital must be fecundatedby labour, material or intellectual activity, or be invested in a wealthcreating activity. Interest is replaced by a return obtained fromwealth-generating activities. Islamic banking is regulated by theSharia Law, Islamic law. The Sharia law encourages the use of profitsharing and partnership schemes and prohibits interest on money.Sources are the Qur’an and the Sunna (teachings from the ProphetMohammed’s acts and paroles).ISSUING BANKThe bank which issues a documentary credit. It may also bereferred to as an opening bank.JUST IN TIMEThe principle of production and inventory control that prescribesprecise controls for the movement of raw materials, componentparts and work-in-progress. Goods are expected to arrive whenneeded for production rather than arriving prior to need andbecoming inventory,LETTER OF CREDITA document established by the buyer for the purpose of financinginternational trade via substituting the bank’s credit for that of thebuyer. A letter of credit is usually subject to the ICC UniformCustoms and Practice (UCP600) for documentary credits.The document states the amount and the terms under which thebank will pay the exporter when documents are presented to thebank.LETTERS OF INDEMNITYLetters of indemnity, or guarantees, are sometimes issued by bankswhen bills of lading or other transport documents go missing ongoods shipments. Typically, such guarantees are issued for between100% and 200% of the value of the goods.LIBORLondon Interbank Offered Rate (Libor) of interest on depositstraded between banks. These rates are commonly quoted on aone-month, three-month, six-month and twelve-month basis.LINE OF CREDITA buyer credit arrangement set up to finance multiple contractssubsequently entered into and nominated to the lender by thebuyer and accepted by the lender as eligible for finance under theline. Lines of credit may either be for miscellaneous capital goodspurchases (usually known as general purpose lines of credit) or formultiple contracts associated with one project (usually known asproject lines of credit).LOCAL COSTSThose expenses incurred in the buyer’s country which areprovided by the supplier. The export credit agencies do not usuallyfinance or guarantee these costs but may do so up to 15% of theexport value.176 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

GLOSSARYLOAN GUARANTEES AND GUARANTEES FORLEGAL PROCEEDINGSBank loans are often made conditional on security provided by theborrower or a third party. A bank guarantee is one of the means bywhich the lender can obtain assurance that the loan will be repaid.Bank guarantee instruments are also issued in respect of legalprocedures, for example: legal costs guarantees and distraintguarantees.LONG TERMUsually any credit period over five years.LUMP SUMA fixed amount agreed at the outset of a contract, payable by thebuyer for a specified task.MAINTENANCE BONDA bond issued to support a maintenance contract to assure thebuyer that the supplier will meet his obligations under themaintenance contract.MANUFACTURING PERIODThe period during which goods are manufactured, usually lastingbetween signature of the contract and shipment of the final terms.MATCHINGThe ability of one export credit agency to match the credit termsand conditions of another, under the arrangement on guidelinesfor officially supported export credits.MATURITYThe date on which a bill of exchange, promissory note or otherdebt instrument becomes due for payment.MEAN COMMISSIONINGUsually the date on which 50% of the buy value of the units to becommissioned, and thereupon to be handed over to the buyer foruse, are commissioned.MEAN DELIVERYUsually the date by which 50% by value of goods to be delivered orthe services to be rendered have been delivered or rendered.MEDIUM TERMUsually any credit period between two and five years.MIXED CREDITExport financing that includes a combination of export creditagency credit and concessional financing. Under the OECD if thesubsidy element (concessional) is greater than 35% the entire loanis considered aid. This is also referred to as tied aid.MULTILATERAL LENDING AGENCYFinancial institution jointly owned by a group of countries designedto promote international and regional economic cooperation.These lending agencies are designed to help develop productivefacilities and to further social and economic growth in membercountries. Examples are the Asian Development Bank (ADB), theInter-American Development Bank, the International FinanceCorporation (IFC), and the European Bank for Reconstruction andDevelopment (EBRD). For a full list see Trade Finance’s annualWorld Official Agency Guide.MULTI-SOURCINGAn expression used to describe the provision of goods or servicesfrom a number of different countries.MURABAHAA type of Islamic finance, Murabaha deals found in trade financetypically involving the purchase and sale of commodities togenerate a profit, which is a substitute for interest payments on acommercial loan.NEGOTIATION FEE (MANAGEMENT FEE)Additional amounts payable to lenders. A once-only fee payable onestablishment of the finance.NEGOTIATING BANKA bank buying the documents which obtains the right to deal withthe documents any way it must to ensure repayment.NOMINATED BANKA bank designated by the issuing bank to which the beneficiarypresents its documents and from which it obtains payment of thecredit sum. Depending on the terms of the credit, this may be theissuing bank, the advising bank or some other bank.NOSTRO ACCOUNTUsed to facilitate international payments, this is the account of abank with its agent or correspondent in a foreign country which isrecorded in the currency of that country.OBLIGORA buyer obligated to pay (debtor).OECDThe OrganISation for Economic Cooperation and Development.OECD brings together the governments of countries committedto democracy and the market economy from around the world to:• Support sustainable economic growth• Boost employment• Raise living standards• Maintain financial stability• Assist other countries’ economic development• Contribute to growth in world tradeThe organisation provides a setting where governments comparepolicy experiences, seek answers to common problems, identifygood practice and coordinate domestic and international policies.OECD ARRANGEMENTAn agreement by members of the Organisation for EconomicCooperation and Development (OECD) to limit creditcompetition among member governments in officially supportedexport credits. This is commonly known as the arrangement onguidelines for officially supported export credits.OFF-COVERUsed by export credit agencies to describe importing countries towhich they will no longer extend insurance cover.OFFSETOffset is one type of countertrade trading relationship. Offsetagreements are usually practised by governments and covermilitary and important civil procurements. Governments awardbusiness to a company in another country, and in return for thecontract, the price paid is offset by the company producing theproduct in the buying country.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 177

GLOSSARYOPEN ACCOUNT TRADINGTrading in which the importer pays after the exporter hasdispatched the goods.PARIS CLUBMeeting of public-sector creditors in Paris to negotiate therescheduling of sovereign debts.PAYMENT METHODSSight payment: The credit is payable immediately againstpresentation of documents.Negotiation: The credit sum is available immediately againstpresentation of documents and negotiation (purchase) by the bankof (normally) a bill of exchange (draft) drawn up by the beneficiary.PERFORMANCE BONDA bond provided by a bank or an insurance company on behalf of acontractor in favour of the buyer promising compensation, usuallyon demand for bank bonds, in the event that the goodssupplied/services performed do not meet the agreed contractualspecifications.POLITICAL RISKRisk that execution of a contract will be prevented by politicalcauses such as political violence, expropriation or currencyinconvertibility. Political risk also covers default by a public-sectorbuyer.PRE-EXPORT FINANCEFinancing that takes place before the product is ready for export.For example, an edible oil exporter might receive pre-exportfinance to enable it to buy seeds which it will eventually use tomake the oil. This term is most often used in relation to thepetroleum sector.PRE-SHIPMENT RISKEvent causing loss which occurs after contract signature butbefore shipment of the goods.PREMIUMThe amount or amounts paid by the insured as consideration forcovering the risks.PRIPolitical Risk InsurancePRINCIPAL (VALUE)Contract value (does not include interest).PROGRESS PAYMENTPayments due from the buyer to the supplier during thecontractual period, which might be financed under a buyer orsupplier credit financing.PROMISSORY NOTEThe debt instrument evidencing an obligation of the importer(buyer) to pay the exporter (seller) or lender in the case of abuyer credit. These notes can be transferred by endorsement.PROTESTA legal document showing that a bill of exchange was presented tothe drawee for acceptance/payment and was refused.PURCHASE ORDERA purchaser’s written offer to a supplier formally stating all termsand conditions of a proposed transaction.PURE COVER LOANA loan where the interest rate is not officially supported, butwhere insurance/guarantees are provided to the lenders coveringprincipal plus interest.RECEIVABLESMoney owed to a business for merchandise or services sold onopen account. Receivables are a key factor in analyzing a company’sliquidity.RECOURSEThe lender’s right to recover funds (including interest whereappropriate) from borrowers if they fail to pay.RED CLAUSEA credit where the advising bank makes pre-shipment advancepayments to the beneficiary to help with the beneficiary’s preexportfinancing.REIMBURSEMENT AUTHORISATIONThe authorisation or request to reimburse provided by the issuingbank to the reimbursing bank.REIMBURSEMENT UNDERTAKINGAn independent undertaking to reimburse provided by thereimbursing bank in favour of the claiming bank in accordance witha request to that effect by the issuing bank.REIMBURSING BANKA bank designated by the issuing bank from which an authorISedbank that has made a payment under the credit may obtainreimbursement.REMITTING BANKThe bank instructed by the exporter/seller in the handling ofcollections. The remitting bank will, in its turn, instruct thecollecting bank.RESIDUAL RISKThe proportion or percentage of the financed amount (principalplus interest), which is not insured/guaranteed by an export creditagency.RETENTION BONDA guarantee to a buyer that, if problems occur in a contractsubsequent to its completion, retention funds will be callable.REVOCABLE CREDITA credit which can be cancelled or amended unilaterally by theissuing bank.REVOLVING CREDITA credit where the amount of available drawings is reinstatedautomatically after a stated period of time.RIBAThe Islamic finance term for interest.SECURITISATIONThe transformation of the loan asset into a liquid security which isthen distributed to investors via the capital markets.178 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

GLOSSARYSHARIAIslamic law.SHORT TERMUsually any credit period up to two years.SOFT LOANA loan made at a concessional rate and term.SOVEREIGN BUYERA buyer that is owned by a national government and carries thefull faith and credit backing of that government when entering intosales and credit agreements.SOVEREIGN RISK1. The risk to a lender that the government of a sovereign statemay default on its financial obligations.2. Also, the risk to a lender that unfavorable changes in theborrowers overall currency exchange position might imperil thepayment of a loan.3. Also the risk to a lender that unfavorable political events in thecountry of the debtor might imperil repayment.SPECIAL PURPOSE CORPORATION (SPC)An independent corporation with nominal capital which is a partyto an export or project financing for purposes of holding title as anominee or acting as a conduit of funds.STANDBY LETTER OF CREDITA letter of credit that provides for payment to the beneficiaryevidenced by certification that certain contractual obligations havebeen fulfilled.STRAIGHT DISCOUNTThis expresses the discount rate as a percentage discounted fromthe face value given the life of the specific maturity or maturities. Astraight discount does not represent a true interest cost.SUKUKAn Islamic bond financing. A sukuk (which works in a broadlysimilar way to a conventional securitISation) is a bond orcertificate that provides an investor with ownership or partownershipin the underlying asset, usufruct, or service.A sukuk is often combined with other Islamic structures such as anijara, a mudaraba or a murabaha. The nature of the underlying assetand terms of the sukuk must be agreed on the subscription date.The sukuk represents beneficial ownership of the underlyingassets and therefore entitles its holder to receive a pro rata shareof profits generated by the asset (not a fixed return tied to theirface value). A Sukuk can also be issued in tradable form and listedon applicable investment exchanges.SUPPLIER CREDITA financing arrangement under which the supplier agrees to acceptdeferred payment terms from the buyer, and funds itself bydiscounting or selling the bills of exchange or promissory notes socreated with a bank in its own country.SWIFTSwift is the Society for Worldwide Interbank FinancialTelecommunication, a member-owned cooperative through whichthe financial world conducts its business operations with speed,certainty and confidence. Over 8,300 banking organisations,securities institutions and corporate customers in more than 208countries trust Swift every day to exchange millions ofstandardised financial messages.SWINGSwing is the term used to describe the amount of imbalance whichmay arise on a bilateral clearing account.SWITCH TRADINGThis is when a third party buys the imbalance that has arisen on abilateral clearing account in hard currency but at a discountedrate.TAKE-AND-PAY CONTRACTA contract that requires the buyer to take and pay for the goodsor services only if delivered.TAKE-OR-PAY CONTRACTA contract with an unconditional obligation on the buyer to payeven if no goods or services are delivered or provided by theseller.TENDER BONDSTender bonds (or bid bonds) are often stipulated by governmentsand other public sector agencies in connection with internationalpublic invitations to tender. Tenderers must post a bond. This ishoped to deter companies from rejecting the contract when it isawarded to them because they have lost interest in it.TENDER TO CONTRACT PERIODThe period of time between submission of a tender and signatureof a contract.TENORThe term fixed for the payment of a draft or debt.TOLLINGIn a tolling deal the customer provides the raw material (forexample, steel ingots) and hires the capacity of the factory to turnit into the final product (for example, steel tubes). The final productis then supplied to the customer, who pays in cash. Throughout theprocess, the customer retains ownership of the raw material.TRANSFER RISKThe risk or inability to convert local currency into the currency inwhich debt is denominated and/or the ability to transfer the fundsto the country of the lender/exporter. Also known as conversionrisk.TRANSFERABLE CREDITA credit which allows the beneficiary to transfer part, or all, of thecredit rights to a third party, or parties, if part shipments areallowed.TRANSIT CREDITThis is where a bank in a third country acts as an intermediarybetween the issuing bank and the advisory bank.TRADE FINANCE The Guide to Global Trade Finance Markets 2011 179

GLOSSARYTRANSPORTATION BONDSThese cover advance payments made by the employer to thecontractor for the specific purpose of importing capital goods ormaterials. Normally they operate from the moment the materialsarrive in the port or airport of destination until delivery on site.UNFAIR CALLING INSURANCEInsurance to protect the exporter against a bond being calledwithout good reason.UNIFORM COMMERCIAL CODE (UCC)The Uniform Commercial Code (UCC) provides comprehensivestandard rules of commercial law that are adopted at state level bynearly all the individual states in the US.The UCC is drafted by the National Conference ofCommissioners on Uniform State Laws in coordination with theAmerican Law Institute.UNIFORM CUSTOMS AND PRACTICE FORDOCUMENTARY CREDITS (UCP)A set of rules and guidelines, drawn up by the ICC primarily forbanks, relating to the issue and handling of letters of credit. It isapplied virtually worldwide. The latest revision is UCP600 whichcame into effect on July 1 2007.UNIFORM RULES FOR COLLECTION (URC)A code of practice for banks regarding collections drawn up by theICC. It is observed by most trading nations.USANCE LETTER OF CREDITA deferred letter of credit without bills or notes issued under it.VALIDITY DATEThe date on which a bond or guarantee expires.VOSTRO ACCOUNTUsed to facilitate international payments, this is the account of abank with an agent or correspondent in a foreign country which isrecorded in the currency of the bank’s own country.WAREHOUSE RECEIPTSWarehouse receipts provide evidence that specified physical assetsof a creditor are being held in storage. They may be used as a formof guarantee in countertrade operations.WAYBILLA document prepared by a transportation line at the point ofshipment for use in the handling of the shipment showing the pointof origin, destination, route, consignor, consignee, description ofshipment and amount charged for the transportation service andother services connected with the transport It is similar in point ofinformation to a bill of lading..WORLD TRADE ORGANISATION (WTO)The WTO is the only global international organization dealing withthe rules of trade between nations. At its heart are the WTOagreements, negotiated and signed by the bulk of the world’strading nations and ratified in their parliaments. The goal is to helpproducers of goods and services, exporters, and importersconduct their business.180 TRADE FINANCE The Guide to Global Trade Finance Markets 2011

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