18 August 2016
Borrower Briefing Bahraini borrowers making a comeback Oman (rated Baa1) has been the growth market in the Gulf for ECA-backed and export loans this year – spearheaded by PDO’s $4 billion jumbo pre-export loan closed at the end of June and Orpic’s $3.8 billion 15-year Liwa Plastics project debt facility signed on 2 March. However, Bahrain - rated Ba2/BB/BB+ after a string of downgrades this year – is also adapting to lower oil income and making a resurgence with both project debt borrowings and corporate liquidity facilities. The growth in borrowing to the market is borne out by the increase in ECA lending across the region (see chart). At the end of June Bahrain Steel returned to the market after a two-year break to refinance a term loan and credit facility. The seven-year deal priced at 340bp over Libor, an increase of 90bp on its previous facility signed in 2014. Aluminium Bahrain (Alba) is also nearing close on a $750 million seven-year loan. Launched to the bank market in June, the deal refinances a 2014 facility and will part fund Alba’s Line 6 expansion project. The loan is being self-arranged by the borrower with financial advisory from JP Morgan, GIB Capital and National Bank of Bahrain. Alba will be raising an additional $3 billion to finance the scheme via bank and ECA loans, and an international bond or sukuk issue. Bank appetite for the Alba debt has been very strong and the final loan will almost certainly be upsized from $750 million. But despite the lender appetite, pricing on the Bahraini deals is, in general, coming in higher than those of similar facilities for Omani borrowers. Margin on the PDO facility was a very competitive 160bp over Libor, while Orpic attracted an all-in price of up to 300bp. Conversely, Alba is expected to price at an allin of 300bp-plus and the Bahrain Steel deal priced at 340bp over Libor, an increase of 90bp on its previous facility signed in 2014. The difference between the two markets, sovereign ratings aside, means that Bahrain remains a potential market for regional lenders which are now looking at a minimum margin of 250-300bp over Libor following an increase on their cost of funding. With Bahrain LNG having recently issued an (RFP) for a 20-year commercial bank/ECA facility to partially fund its $655 million receiving and regasification terminal project in the Hidd industrial area, it will be interesting tosee what difference to the pricing the ECA input will have: Around 80% of the debt is expected to be provided by Kexim and K-Sure on the back of an EPC contract with GS Engineering and Construction.
Mandate mill Stanbic Bank Uganda is rumoured to be approaching lenders for a $50 million three-year club loan to fund its trade-related lending. The deal will replace an $85 million 18-month club loan that Stanbic signed in January 2015. The previous loan was provided by Emirates NBD, Al Ahli Bank of Kuwait, Standard Chartered, Al Khalij Commercial Bank and the Commercial Bank of Qatar. The deal paid a 250bp margin and 90bp in fees. Sponsors of the 344 MW Bridge Power CCGT project in Ghana – Endeavor Energy (60%), Sage Petroleum and General Electric – are planning to bridge finance construction of Phase 1 of the scheme and then go to the DFI and multilateral markets for a long-term funding solution. Financial close is expected by December 2016. Agri-trader and processor Cofco Agri (previously Noble Agri) has sent out a request for proposals for a $2.7 billion dual-tranche refinancing.The deal – which is expected to comprise one- and three-year tranches – will expand and extend a previous one-year $1.7 billion facility signed in September 2015 by Noble Agri. Bahrain LNG WLL – jointly owned by Nogaholding (30%), Teekay LNG Partners (30%), Samsung C&T (20%) and Gulf Investment Corporation (20%) – has issued a request for proposals (RFP) for a 20-year commercial bank/ECA facility to partially fund its $655 million receiving and regasification terminal project in the Hidd industrial area of Bahrain. Responses are due by the end of August. Around 80% of the debt is expected to be provided by Kexim and K-Sure on the back of an EPC contract with GS Engineering and Construction.
Top Stories Banks keep faith with Noble despite Moody's downgrade Despite a two notch downgrade by Moody’s and appalling interim results, banks are still optimistic about a turnaround in Noble’s fortunes, even recently waiving a covenant on its annual revolver in a show of faith.
BBVA launching debut export finance covered bonds programme In an interesting twist on what constitutes ancillary business from export finance loans, BBVA has launched the first liquidity programme whereby it will use its export finance portfolio to back covered bonds pledged as collateral for repo transactions.
Macquarie closes multi-source funding for Tees Biomass project The financing comes with significant lender comfort in the form of a UK government contract for difference (CfD) subsidy priced at an inflation-linked £125 per MW/h.
Ocean Partners downsizes borrowing base facility The UK-based firm's loan was $5 million larger last year and retains a one-year tenor maturing in July 2017.
Louis Dreyfus Asia closes $600m revolver The loan is guaranteed by parent Louis Dreyfus Co and offers same pricing as the borrower’s previous annual borrowing despite the parent’s profits dropping by around two-thirds in 2015.
Bank of America and HSBC announce trade blockchain solution The new technology could “change the way businesses around the world trade with each other,” according to HSBC.
News in Brief NCC raises $133m murabaha to fund MR chemical tankers The first and second tankers were delivered in March. The third, NCC Masa, joined the fleet in April, while the fourth and fifth tankers were received in May.
EBRD takes a piece of Oksut gold mine project financing OMAS will use the loan to finance a substantial portion of the construction, development and operation of the Öksüt gold mine and its related infrastructure in the Kayseri region of central Turkey.
EDC finances Bombardier sale to Imperial Jet The borrower took delivery of the aircraft on July 26.
CerradinhoBio raises R$150m expansion loan from IFC The Brazilian ethanol and biomass-based electricity producer is expanding its mill in Chapadao do Ceu.
KfW provides major support for Merkur offshore wind financing KfW is providing €360 million under the umbrella of its Offshore Wind Energy Programme, while KFW-IPEX is contributing a further €97.4 million.
ADB tries dual tranche appeal for green bond fundraising A more sophisticated offering than the DFI’s $500 million 10-year debut green issue in 2015, the $1.2 billion fundraising features three- and 10-year tranches designed to appeal to a broader range of investors.
Belarusky Narodny raises $20m for on-lending to SMEs Belarusky Narodny Bank (BNB) has raised a $20 million two-to-four-year fundraising from international lenders, the EBRD and FMO. According to an EBRD statement, BNB will use the loans to provide local SMEs with long-term funds.
Just Fun Toys seals factoring loan and PO financing FSW Funding has provided a $2 million factoring loan for the South African toy seller.
Enbridge Inc slashes revolver to $1.3bn The Canadian hydrocarbon distributor and electricity generator’s loan size fell by $850 million
Bangladesh Shipping to get Chexim loan for newbuilds order The procurement comprises three oil tankers and three bulk carriers, each with 39,000DWT capacity.
Neo Solar Power signs standby L/C Taiwan-based solar cell and module manufacturer Neo Solar Power Corporation has raised a $123.6 million three-year standby letter of credit to provide credit enhancement for its third issue of overseas credit enhanced convertible bonds.
ONGC Videsh out to banks for second Vankorneft bridge ONGC Videsh Vankorneft (OVVL) - a Singapore-based subsidiary of ONGC Videsh - has issued a request for proposals for an $800 million bridging loan to support its acquisition of an additional 11% stake in Russian oil field operator JSC Vankorneft.
NBG closes first Greek SME loan securitisation since 2007 According to a statement from NBG, “the transaction primarily aims to enhance the access of Greek SMEs & mid-caps to affordable financing."
Indonesia Exim final allocations confirmed Indonesia Eximbank has announced final allocations for its latest fundraising – a $725 million dual tranche facility launched to general syndication at the end of May.
Taiwan Cement closing on new working capital facility The deal offers three levels of commitment, although lenders have to participate in both tranches.
Talbot forms $115m political risk insurance binder for US 100% will be undertaken by various underwriters at Lloyd’s and led by Talbot Underwriting, Syndicate 1183.
Aon poaches Collett from Willis Towers Watson Collett has a broad experience of the trade finance sector. Prior to joining Willis he was head of Asian loan syndication and sales at Standard Bank.
SMBC expands Palanca's role in Asia Palanca joined SMBC in 2010 and prior to that held senior roles at Merrill Lynch Asia and ING Bank.
HSBC loses project and infrastructure finance veteran Trevor Sturmy, director of project and infrastructure finance at HSBC in London since 2006, has left the bank following the restructuring of its infrastructure and real estate operations earlier in the year.
Larsen rejoins Gazprom Marketing & Trading He is returning to GM&T having worked at the company for eight years until January 2015.
KUKE appoints new vice president Wladyczak Joins from PKO TFI, a Warsaw-based investment manager, where he served as director of the investment products business.
Gerber Finance adds McGarry as chief credit officer In his new role, McGarry will be responsible for managing the loan portfolio.
Archer Daniels adds to its structured trade finance team Lynch joins from Noble Americas, where he was Americas regional head of commodity enhanced finance.
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