Index for March 2014

Volume 13, Issue 3

  • (Herald Sun, Melbourne, 18 March 2014) Mining giants BHP Billiton and Rio Tinto have been granted a $110 million “soft loan” from taxpayers to help expand the world’s biggest copper mine, in Chile. Australia’s export credit agency, the Export Finance and Insurance Corporation, has extended the $US100 million ($110.5 million) loan to the miners — the world’s biggest by market value. The funds will help cover the cost of a $US3.8 billion equipment upgrade being carried out by BHP and Rio at the Escondida mine, in Chile’s Atacama Desert. The latest deal by the credit agency — a little-known government de facto bank — has spark renewed criticism that it is favouring the big end of town over smaller exporters struggling to break into global markets. Jubilee Australia chief Brynnie Goodwill said the agency should be supporting small and medium-sized enterprises rather than “well-endowed companies which have access to global capital through their shareholders or the markets”.

    A 2004 Chilean study showed that, with 0.25% of the earth's surface, Chile holds 37% of known copper reserves, and that neoliberal denationalization of mining in the 1990s, followed by a tripling of production by foreign transnational corporations, led to a drop in prices and a fall in government revenues from U$1.8 billion a year at the end of the 1980s to US$300 million in 2000.

  • (Business Spectator, Melbourne, 21 March 2014) Gina Rinehart has secured backing from a group of global banks and export credit agencies for a new $US10 billion ($A11.0bn) iron-ore mine that can feed Asian steel demand, just as miners like BHP Billiton scale back investments amid a broad decline in commodity prices. Australian and international counsel Allen & Overy has worked closely with the export credit agencies, namely Export-Import Bank of Korea, Korea Trade Insurance Corporation, Japan Bank for International Cooperation, Nippon Export and Investment Insurance and Export-Import Bank of the US, and the 19 commercial banks to negotiate, document and complete the transaction.

  • Centre for Aviation, Melbourne, 26 March 2014) UK Export Finance head of aerospace Gordon Welsh, speaking at the CAPA – Airline Fleet & Finance Summit 2014, stated the export credit agency will sell the last of 40 aircraft returned after 9-11 “hopefully next week”, ending 13 years as operating lessor. He also said the UK Export Finance’s objective is to keep a level playing field, stating “frankly we take risks that others cannot.” He also said there must be rules to ensure that export credit agencies in each country all work in a similar way.

  • (Centre for Aviation, Sydney, 20 March 2014) Boeing stated it expects the market for financing new aircraft to remain strong as airline customers continue to demand for new, fuel-efficient airplanes. Boeing Capital Corp VP/general manager for aircraft financial services Tim Myers said the globally the liquidity balance "looks good as the industry rebalances itself to move away from export credit support, with its more expensive pricing, and more toward reliance on the commercial markets.” Boeing said that airplane financing globally is experiencing a rare balance among primary delivery financing sources – leasing companies, commercial banks, the capital markets, export credit agency support and private equity and hedge funds among them – as global aircraft deliveries are expected to require USD112 billion in financing for 2014.

  • (Space News, Washington, 11 March 2014) Commercial launch services provider International Launch Services (ILS) expects to conduct 4 or 5 commercial campaigns this year, compared with 7 in 2013, as demand for Russian government launches, not handled by ILS, consumes most of the rocket’s 10-launch manifest this year. In what they called a potentially major boost to ILS’s competitiveness, ILS said the Russian government has created an export credit agency whose mandate is to be much more active than its predecessor organization in giving financial assistance to Russian exports. The Export Insurance Agency of Russia (EXIAR), whose operating terms are being vetted by Western banks, will not provide direct loans as the U.S. Export-Import Bank does, but rather provide government guarantees for loans provided by commercial banks — in this case, denominated in dollars, euros or rubles. The French export-credit agency, Coface, operates in a similar manner.

  • (Hindu Business Line, Chennai, 5 March 2014) India's state-controlled Export Credit Guarantee Corporation that covers exporters against credit risk is closely looking at the turmoil in Ukraine to determine whether the situation calls for a risk upgrade, Though, theoretically, India stands to benefit from a depreciating hryvnia, the political turmoil may affect movement of goods, and the currency benefit may not be realised. ECGC has tie-ups with agencies and industry bodies abroad to gauge the situation.

  • (TwoCircles, New Delhi, 9 March 2014) A new Exim Bank Line of Credit for Africa has been introduced to speed up infrastructure project development in the continent, Commerce Minister Anand Sharma said here Sunday. "We've also introduced another Line of Credit, added to the Exim-Bank. The finance ministry has put it together under the Export Credit Guarantee Corporation (ECGC) and the National Exports Insurance Authority (NEIA), for which Buyer's Credit is available for infrastructure projects in Africa," Sharma said at the 10th CII-Exim Bank (Export-Import Bank of India) conclave on India Africa Project Partnership.

  • (Business Standard, New Delhi, 5 March 2014) The Competition Commission has rejected allegations of unfair trade practices against Export Credit Guarantee Corp related to credit insurance for exporters. A complaint filed by Tavoy Apparels and its group firms had alleged that even after one-time settlement with Union Bank of India for export credit loan taken from it, Export Credit Guarantee Corporation of India (ECGC) refused to delete the name of the complainants from the defaulters list known as 'Special Approval List'.

  • (Marketwired, Ottawa, 26 March 2014) - Export Development Canada (EDC) today announced that it has provided a USD 10 M line of credit to Turkish leasing company Ak Finansal Kiralama (AkLease), which will be used to provide financing to Turkish companies leasing equipment from Canadian manufacturers. "EDC's partnership with AkLease is about making it easier for Canadian companies to win new equipment leasing business in the booming Turkish market," said Zenon Woychyshyn, EDC's Chief Representative in Turkey. "EDC has been working with AkLease and their customers for many years, and we see this formal financing agreement as the next logical step in connecting Canadian equipment with new Turkish buyers."

  • (USNewswire, Washington, 18 March 2014) The Export-Import Bank of the United States (Ex-Im Bank) today announced its cross-marketing partnership with thousands of credit and finance professionals who are represented by the Finance, Credit and International Business Association (FCIB), a division of the National Association of Credit Management.  The Bank and FCIB signed a memorandum of understanding that expresses their mutual interest in providing information to business owners about how they may finance and expand export sales while sustaining U.S. jobs.
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  • (The National, Abu Dhabi, 19 March 2014) Dubai is studying plans to establish the world’s first fully Sharia-compliant export credit agency in a bid to double trade flows over the next five years.