dnb nor – latin american set up international corporates and institutions – project and trade...

DnB NOR – Latin American set up

International Corporates and Institutions – Project and Trade Finance

Latin America, Africa and Middle East desk

DnB NOR Bank – International Corporates and Institutions2

Agenda:

I. Who are we?

II. How can we contribute?

III. Latin American competence

IV. Solutions & Experience


Who are we?

Intl. Financial Institutions

Products/responsibilityArea

Project & Trade Finance

Risk Analyses Group

•Relationship managers for international financial institutions and insurance companies within OECD

•Serving clients of other banks

•Multi-sourcing, (structured financing solutions involving external financing, TF instruments and country-risk expertise.)

•Trade Finance

•Relationship manager for banks outside the OECD area

•Responsibility for countries in emerging markets

• Analysis of banks and country for credit purposes


DnB NOR – International Presence

DnB NOR offers reliability, long-term commitment


Agenda:

I. Who are we?





How can we contribute?

• Geographical specialisation,dedicated specialists covering emerging markets

– Asia, Central and Eastern Europe

– Latin America, Africa and Middle East

• Extensive network in local markets

– Banks

– Lawyers

– Consultants

– Governmental institutions

– Local business environment


How can we contribute?

• Trade Finance and guarantees

• Multi-sourcing: structured financial solutions using external hedging and funding sources

– Multilaterals and regional development banks

– ECAs

– Credit insurance

– Local banks

• Advisory services to customers and account officers

– Providing advice on political risk and financial services to clients who trade with or operate in these areas

– Issuing regional market updates on regular basis

– Cash management


Agenda:

I. Who are we?





Latin American competence

• Latin American team

• Several skilled associates in Norway covering the regions

• A representative office in Rio de Janeiro, Brazil covering Brazil.• Since 1970

• In September 08 DnB NOR opened a branch in Santiago, Chile

• Market advising

• Experience and an extensive network

• Language and cultural knowledge

• Watch the markets closely, distribute bi-monthly market reports and frequently arrange seminars

• Products

• Administrative handling, financing, risk management, currency services and cash management.


Agenda:

I. Who are we?





Good financial incentives in Brazil - Merchant Marine Fund

• Created in 1958.

• Purpose: to finance the yard & shipping industry.

• Funding source: tax on freight charged on imports (lately also directly from Ministry of finance)

• FMM is part of the Ministry of Transportation

• Three agents for the fund:• BNDES, • Banco do Brasil • Banco do Nordoeste


Good financial incentives in BrazilFMM - regulations

Currency: USD (linked)

Interest rate: 2,5%-5% p.a. dependent on rating/guarantee structure (Depends on local content)

Disbursement/Grace: Up to 48 months

Tenor: Up to 20 years

Participation: Up to 90% of project funding

Disbursement: Monthly, according to financial and construction schedule

Security: Mortgage

Bank SBLC/corporate guarantees

Charter contracts


Good financial incentives in Brazil• Typical structure of transactions with DnB NOR

• 90 % financing

• Tenor 14 – 17 years

• Interest rate 3 % fixed + DnB NOR margin

• Security – Stand By Letter of Credit(SBLC) from DnB NOR with 4-5 years tenor

• SBLC covering approx 110% of the loan(loan + 6 months interest + penalties etc)

• Timing – 6 months from application until disbursement with FMM/BNDES, but dependent on board meeting in FMM


Good financial incentives in BrazilDnB NOR experience

• Long term financing of 11 vessels together with BNDES/Banco do Brasil

• Total exposure with BNDES approx USD 500 mill

• DnB NOR largest international partner bank with BNDES


Trade Finance

• All Trade Finance instruments• Bid bonds• Performance bonds • Letters of Credit• Cash against documents• Discounting of drafts


Relationship with Petrobras

• Approved issuer of guarantees/SBLCs

• Relationship between Rep. Office & Petrobras

• Petrobras renewing focus on ECA financing• Good potential from Norway

• Approved by ANP


Export Credit Agencies (ECAs)• Based on an OECD agreement

• The countries offer their respective export industries similar financing terms• Fixed interest rates determined by the OECD – the so-called CIRR

• In general all countries have the same main principles with regards to;• Loan amount (up to 85% for capital goods and 80% for ships)• Tenor: minimum 2 years• Repayment in semi-annual, equal installments

• In Norway, the systems is based upon two institutions• GIEK, state owned and offering guarantees, and Eksportfinans, owned by banks

(85%) and state (15%), offering CIRR funding• Normally 50% of the contract value should be Norwegian content

EXPORT CREDITS


The structure

100%

Contract valueCapital goods: 85 %

Ships: 80%

CIRR loan from Eksportfinans

Up to 95%(of loan) guaranteed by GIEK

15% / 20% prepayment

Maximum financing is 85%/80% of the contract value, while GIEK can cover up to 95% of the commercial and political risk of the loan. The additional part (5% or more), can be covered by an other financial institution such as DnB NOR.

5% guaranteed by DnB NOR

Contract content

EXPORT CREDITS


What else have we done in Latin America- some examples

• Chile – Financing of hydro electric power plant together with IFC

• Peru – Financing and syndication of loan together with GIEK for Norwegian owned fishing company

• Nicaragua – Securing delivery of wind mills in cooperation with Cabei – regional development bank

• Uruguay – In cooperation with Finnvera and IFC, financing of pulp & paper plant

• Brazil – Financing of Norwegian equipment to shipyards together with GIEK

• Panama – Financing of terminal together with IFC and local banks


Latin America, Africa and Middle East

• Arne-Christian HaukelandE-mail: [email protected]: + 47 55 21 19 53

• Karen KosbergE-mail: [email protected]: + 47 22944659

• Kjetil HøydalE-mail: [email protected]: + 47 22481534

• Lars KvammeE-mail: [email protected]: + 47 55 21 18 11

• Tom Ringseth (Brazil)E-mail: [email protected]: + 55 21 22 85 17 95

dnb nor – latin american set up international corporates and institutions – project and trade...

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