Index for April 2015

Volume 14, Issue 4

  • (Thomson Reuters ZAWYA, Jeddah, 15 April 2015) The Managing Director of Atradius Dutch State Business paid a business visit to the Islamic Corporation for the Insurance of Investment and Export Credit ( ICIEC ) in Jeddah, Saudi Arabia on April 13, 2015. During the visit, the two institutions exchanged ideas on enhancing the cooperation between them in order to support business between the Netherlands and ICIEC 's member countries. Atradius and ICIEC have covered joint projects in the last two years for over US$2 billion, where ICIEC has reinsured Atradius for over US$500 million. [Atradius DSB apparently needs the said reinsurance on Egypt, and therefore is using this contract with ICIEC. This has become even more important as last February Atradius DSB also insured two Dutch dredging companies for their activities in expansion of the Suez canal with an additional maximum insured amount of about € 512 million.]

  • (GAO, Washington, 15 April 2015) In six reports on the U.S. Export-Import Bank issued since March 2013, GAO presented findings and made 16 recommendations to improve Ex-Im's operations, summarized in this testimony in three broad areas: (1) risk management, (2) underwriting and fraud prevention, and (3) forecasting its exposure and reporting on its estimates of its impact on U.S. jobs. In September 2014, GAO found that Ex-Im had implemented many key aspects of its underwriting process but identified weaknesses in the design, implementation and documentation of some procedures. For example, GAO found that Ex-Im did not have mechanisms to verify compliance with certain loan guarantee eligibility procedures and had not documented its overall processes related to fraud.

  • (US Justice Dept., Washington, 22 April 2015) A former loan officer at the Export-Import Bank of the United States (Ex-Im Bank) pleaded guilty in federal court today for accepting more than $78,000 in bribes in return for recommending the approval of unqualified loan applications to the bank, among other misconduct. Johnny Gutierrez, 50, of Stafford, Virginia, pleaded guilty before U.S. District Judge Gladys Kessler of the District of Columbia to one count of bribery of a public official.  A sentencing hearing is scheduled for July 20, 2015.

  • (McGraw Hill Financial, Rio de Janeiro, 20 April 2015) Brazilian state-run oil company Petrobras approved a series of financial agreements with local and international banks that will meet its financing needs in 2015, the company said Friday. In a filing with local stock regulators, Petrobras said that the financing deals will provide the company with access to about $6.2 billion. The agreement follows a $3.5 billion financing contract Petrobras reached with China Development Bank on April 1. Petrobras was cut off from global capital markets typically used to fund operations and investments last year and has been under a financial squeeze after federal prosecutors uncovered an alleged bribery and kickback scheme involving former company executives, local politicians, many of Brazil's largest construction and engineering firms, affecting UK, Dutch and perhaps other ECA financing.

  • (The Hill, Washington, 15 April 2015) During congressional hearings, Republicans criticized Treasury Department officials for not negotiating with foreign governments to end subsidized export credit programs, as was mandated in the 2012 reauthorization bill. The Secretary of the Treasury had been ordered to initiate and pursue negotiations with other major exporting countries, including members of the OECD and non-OECD members, to substantially reduce, with the ultimate goal of eliminating, subsidized export financing programs and other forms of export subsidies, especially on commecial civil aircraft. [Annex I of the WTO Agreement on Subsidies, Article (k) exempts the terms of the OECD managed Arrangement on Exports Credits from the definition of subsidies. However, it is well known that the Arrangement is a cozy club where national ECAs only loosely monitor the so-called level playing field. For example, in a moment of transparency, the UK's ECDG in 2005 admitted that it subsidized exports to the tune of some US$271 million per year.]

  • (TxfNews, Beijing, 2 April 2015) Airbus China Aircraft Leasing lands its first ECA-backed financing Chinese aircraft lessor China Aircraft Leasing Group (CALC) has completed its first aircraft financing backed by an export credit agency (ECA) guarantee – a $224 million facility guaranteed by UK ECA UK Export Finance (UKEF). The UKEF guarantee will cover the purchase of five Airbus A320-200 aircraft, which will then be leased to Air India this year. Lenders on the transaction are ING Bank , who are also the facility agent and co-arranger, and TD Bank.

  • (, Moscow, 13 April 2015) Russian energy firm OAO Novatek (NVTK.MZ) may secure $5 billion from export credit agencies for its $27-billion natural-gas project in the Russian Arctic by mid-year, according to the company's chief executive, Interfax news agency reported Monday. Financing for the project has been hampered by U.S. sanctions imposed against Novatek as a result of Russia's actions in Ukraine. Novatek Chief Executive Leonid Mikhelson and Patrick Pouyanne, head of Total SA (TOT) which is Novatek's partner on the Yamal LNG project with a 20% stake, said on Monday they were optimistic about the project's financing and that intentions expressed by the export agencies are valued at $5 billion.

  • (TxfNews, Rome, 27 April 2015) Italian export credit agency SACE is set to expand activity with Cuba and has raised the ceiling for the support of Italian exports and investments in the country. As one of the first export credit agencies to announce such an initiative, SACE has approved a significant increase - from €10 million ($10.9 million) to €100 million ($108.7 million) - in the country ceiling for supporting exports and investments in Cuba.

  • (ECNS.CN, Beijing, 4 April 2015) China is to pilot the removal of preconditioned government approval for offshore corporate bonds, part of a national arrangement to lower the financing cost of enterprises expanding overseas. The move, along with the government's efforts to speed up the growth of China-funded financial institutions and introduce more long-term export credit insurance, will make it easier for Chinese companies to get credit by mortgaging overseas assets, help them manage risks and hence facilitate the export of excess but advanced industrial capacity to countries in need of upgrading.

  • (Hurriyet Daily News, Washington, 7 April 2015) The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, has announced that it will help Turkish Eximbank provide medium- and long-term funds to Turkish exporters. “MIGA is providing guarantees of $333 million to a syndicate of banks jointly led by Citibank N.A. and Norddeutsche Landesbank Girozentrale of Germany, against the risk of non-honoring of financial obligations by a state-owned enterprise on their 10-year loan facility to Turkey’s official export credit agency,” it said April 7. Société Générale S.A. of France is also participating in the loan facility, and the two-tranche facility will complement Turkish Eximbank’s other funding sources.