Competitive export financing within ocean industries

Transcription

1 Competitive export financing within ocean industries Green Maritime Seminar Rio de Janeiro, 10th of February 2017

2 Our mission is to provide competitive financial solutions to buyers of Norwegian Capital Goods and Services

3 Agenda 1. Export Credit Norway 2. Competitive interest rates 3. Maritime financing 4. The application 3

4 Export Credit Norway

5 We provide loans to the clients of Norwegian exporters LEGAL SET-UP: OWNERSHIP: FUNDING: CREDIT RISK: Limited liability company Norwegian Government State Treasury GIEK / Acceptable banks Created by a special law Total Lending Portfolio approx. NOK 75 bn bn) 5

6 Export Credit Norway offers STABLE LONG TERM FINANCING FUNDING FROM THE NORWEGIAN GOVERNMENT COMPETITIVE INTEREST RATES 6

7 General terms REPAYMENT PERIOD Generally: up to 8½ years Ships: 2 12 years Renewable energy: up to 18 years LOAN AMOUNT Capital goods: up to 85% of contract value Ship financing: up to 80% of contract value NORWEGIAN CONTENT Must account for at least 30% of the contract amount OECD All loans must comply with the OECD Arrangement 7

8 Eksportkreditt in Brazil Cooperation with IN in Brazil since beginning of 2015 Brazil is important international market for ECN Purpose: continuous following up of existing and potential clients Increase ECNs market knowledge in key markets Following up of leads and projects in the early sales phase client and loan responsibility remains in Norway 8

9 Competitive interest rates CIRR rates Market rates Free interest rates option

10 Two attractive choices between interest rate alternatives CIRR MARKET LOAN CIRR loan (Commercial Interest Reference Rates) Fixed interest rate for the whole period The rate is adjusted by OECD on the 15th of every month Export Credit Norway quotes CIRR rate before contract award a free-of-charge fixed interest rate option All OECD currencies available CIRR qualified market loan Priced in accordance with prevailing market conditions Floating rate (IBOR) Most convertible currencies available Compliance with state aid regulations The interest rate choice may remain open until shortly before final drawdown of the loan. The borrower may compare the fixed CIRR rate to the market-based interest rate and choose the most attractive option. 10

11 CIRR Loans CIRR - Fixed rates for the period in % pa. < 5 years 5½ 8½ years 9-12 years NOK 2.18% 2.18% 2.18% USD 2.48% 2.92% 3.23% EUR 0.34% 0.64% 0.98% 11

12 Attractive interest rate option: The CIRR rate 7 CIRR development year fixed rate NOK USD EUR Jan Jan Jan Jan Jan Jan Jan Jan Jan.16 12

13 Market Loans Indicative price levels as of August 2016 for loans with 100% ECA guarantee Margin over IBOR in basis points (bps) Market binding period 3 years 5 years 7 years 12 years USD 3 Months Libor EUR 3 Months Euribor NOK 3 Months Nibor Floating rate as of (3 Months IBOR) USD: 0.82%, EUR: -0.32%, NOK: 1.12% 13

14 The free interest rate option The free interest rate option Interest rate (%) CIRR-quote Fixed date Market interest rate (fixed or floating) Application date Contract signed Delivery Repayment period Time 14

15 Contract Financing equipment and services Norwegian content must account for at least 30% of the amount of Norwegian supplier contracts. FINANCING 15% equity GUARANTIES CONTENT Scenario 1 Scenario 2 Scenario 3 Local Max 30%* 85% Export Credit Norway GIEK 70-90% B A N K 100% Norwegian 70% Foreign Min. 30% Norwegian 40% Foreign Min. 30% Norwegian or 100% bank * Max. 30% of eligible contract from Norway and Foreign

16 Guarantees All ECN loans shall be 100 % guaranteed Co-operation and preferred partner (75%) GIEK Financial institutions are typically commercial banks, but may also include insurance companies Acceptable Norwegian and international banks at least BBB and approved by ECN 17

17 GIEK - Norwegian Guarantee Institute for Export Credits GIEK is owned and issues long-term guarantees on behalf of the Norwegian State Politically independent board, office in Oslo, approx. 80 employees GIEK offers financial guarantees in order to promote Norwegian exports GIEK guarantees for export to countries across the world in all industries Strict CSR policies no competition with banks 18

18 GIEK - Buyer Credit Guarantee Up to 85% of the value of the sale contract may be loan-funded GIEK may guarantee up to 90% of the loan amount The guarantee is issued for a period of between 2 and 10 years, for ships, the max. 12 years, renewable energy & cleantech max. 18 years At least 30% of the export contract must comprise Norwegian goods, services or value creation Market based p.a. premium plus commitment fee, arrangement fee etc. it s good to involve GIEK as early as possible 19

19 Maritime financing Ships Parts of Ship Retrofit

20 Three types of financing within the maritime industry NEW VESSELS PARTS OF SHIP RETROFIT Ships built in Norway for: Foreign owner. Norwegian owner within the offshore sector. Ships built at Norwegian owned yard outside Norway Shipyard in Country A =>owner/buyer in Country For Norwegian content in ships to be built by yards outside Norway Repayment period up to 12 years. Retrofit equipment is defined as capital goods considered as depreciable capital equipment Repayment up to 8½ years. Minimum 30% Norwegian content. Export Credit Norway can finance up to 80% of the shipbuilding contract. Export Credit Norway can finance up to 80% of the contract amount of Norwegian Ship equipment and Services. Export Credit Norway can finance up to 85% of the retrofit contract. Credit Frame Agreement. 21

21 Retrofit Financing Old Ladies

22 Retrofit financing with a Credit Frame Agreement TERMS AND CONDTITIONS Loan amount: up to 85% of contract value Interest rate: CIRR or Marked based interest rate (IBOR). CIRR-rate ( ) in 5y USD: 2.48 % pa. Repayment period: up to 8½ years depending on amount and type of investment Guarantor: GIEK and/or bank 23

23 Example 50 vessels Retrofit equipment USD 1 mill. per vessel => Total Investment USD 50 mill. Credit frame Agreement USD 42.5 mill. Availability: Till last vessel of the fleet has been to «docking» in When the last docking has been made, Export Credit Norway will consolidate all purchases and installations into one separate loan. Year Docking of ship - Schedule Number Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Loan amount Disburse ment m Aug m Oct m Dec m Sep m May m 24

24 The application

25 The application and the loan process The purchaser repays the loan to Export Credit Norway Export Credit Norway issues indicative term sheet Exporter or buyer apply for a loan guarantee Export Credit Norway negotiates loan agreement with the borrower Export Credit Norway disburses the loan The exporter or buyer contacts Export Credit Norway The loan application must be sent before commercial contract is signed. 29

26 What should the application include? Name of buyer, borrower and supplier Type of delivery and time of delivery Estimated contract value Estimated Norwegian content in the contract Type of loan, amount, currencies, tenor 30

27 «The loan application must be sent before commercial contract is signed»

28 Eksportkreditt Brazil MARTIN NIETZ ANNA MUSIEJ AANENSEN

29 Eksportkreditt.no Tel: (+47) Hieronymus Heyerdahls gate 1 P.O. Box 1315 Vika, 0112 Oslo, Norway Follow us: