Developing Opportunities with Korea Eximbank (KEXIM) June, 2011 August 6, 2013
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Table of Contents SECTION 1 KEXIM at a Glance 4 SECTION 2 Finance Solutions 9 SECTION 3 Recent KEXIM Supported Projects 19
SECTION 1 KEXIM at a Glance
KEXIM at a Glance Key Profile Specially Mandated Institution Republic of Korea 100% Ownership An Export Credit Agency mandated by Korean Government to promote export competitiveness of Korean goods and services Established in 1976 pursuant to the special act - the Export-Import Bank of Korea Act Often functioning as government vehicle to remedy market failure 100% owned by Government The Government fully owns KEXIM s capital directly and indirectly through other governmental arms KEXIM s Chairman & President is appointed by the President of Korea Board of Directors and Auditor are appointed by the Government Par with Sovereign Ratings Aa3 (Stable) A+ (Stable) AA- (Stable) 5 5
KEXIM at a Glance Objectives Support Korean Exporters / Investors Conducting Overseas Business Strengthen the bank s role as the leading bank for global business providing a variety of financing tools Primary Objective of KEXIM Assist sponsors / investors achieve optimal financing terms under a bankable financing structure Arrange the best financing package to implement deals Enhance Cooperative Ties with International Institutions Collaborate with Multilateral Development Banks and ECAs to promote co-financing in emerging countries 6 6
KEXIM at a Glance Key Operation KEXIM s s own Account Export Credit Government-entrusted entrusted Funds On behalf of Korean Government, KEXIM administrates EDCF and IKCF, both of which are SEPARATED ACCOUNTS FROM KEXIM LOANS GUARANTEES Import Credit Overseas Business Credit Total Loans: KRW49tn(=U$44bn) (as of Dec 31, 2012) Financial Guarantee Project Related Guarantee Total Guarantees: KRW21tn(=U$19bn) (as of Dec 31, 2012) Economic Economic Development Economic Development Cooperation Fund ( EDCF ) Cooperation Fund Fund ( EDCF ( EDCF ) EDCF ) Since 1987 Promote economic cooperation between Korea and developing countries Total Loans: KRW3.8tn Total Fund: KRW3.1tn Inter-Korean Cooperation Fund ( IKCF ) ( Since 1991 Promote exchanges and cooperation between the North and South Korea Total Loans: KRW2.9tn Total Fund: KRW11.3tn 7 7
KEXIM at a Glance Project Finance Experience Since 1999, KEXIM has actively participated in global project finance market By Number of Projects By Commitment (USD in million) as of 13. 1 Sewage Treatment 1 Infrastructure 5 Power & Water Petrochemical 5,315 3,319 Natural Resources Development 6 Refinery 7 Power & Water 20 Refinery Natural Resources Development Infrastructure Sewage Treatment 3,296 4,475 992 235 Petrochemical 8 Total 17,632 8 8
SECTION 2 Finance Solutions
Finance Solutions Export Credit PROJECT FINANCE : EXPORT CREDIT KEXIM Direct Loan Borrower : Project Company* Financial Guarantee Interest Rate : Libor based floating rate or CIRR-based fixed rate Premium : Risk Premium subject to OECD Commercial Banks Loan Project Company Repayment arrangements on Export Credit Export Contract Requirements : Up to 14 years** (Project Finance) Korean EPC Contractor : Korean Contents shall be at least 25% of export contract value 10 10
Finance Solutions Overseas Business Credit PROJECT FINACE : OVERSEAS INVESTMENT CREDIT Borrower : Project Company KEXIM Direct Loan Interest Rate : Libor based floating rate or comparable fixed rate Financial Guarantee Premium : Risk Premium to be applied Repayment : Up to 30 years (door to door) Commercial Banks Loan Project Company Security : Mortgage, Insurance, Project A/C, Assignment of borrower s right Equity Injection Korean Sponsor Requirements under project contracts, etc. : Korean Sponsor s share retention - Completion: substantial portion should be maintained - Repayment: at least 10% 11 11
Finance Solutions Overseas Business Credit CORPORATE FINACE : OVERSEAS INVESTMENT CREDIT Borrower : Korean companies planning to KEXIM invest overseas with more than 3 years of experience in the field Currency : A foreign currency or Korean Won Loan Coverage : Up to 80% Korean Investor Re-lending Equity Foreign Company Interest Rate Repayment : Libor(or Swap) based floating rate or comparable fixed rate : Maximum 30-year repayment period Equity Injection including 3-years grace period Security :- Bank guarantee, pledge, mortgage Re-lending Foreign Investor on the borrower s local assets - Loan on credit possible 12 12
Finance Solutions Overseas Business Credit CORPORATE FINACE : OVERSEAS PROJECT CREDIT Borrower : Korean companies that conduct overseas projects without establishing KEXIM a foreign company Currency : A foreign currency or Korean Won Loan Coverage Interest Rate : Up to 80% : Libor(or Swap) based floating rate or Korean Investor Conduct Project Overseas Project Conduct Project Repayment Term Security comparable fixed rate : Maximum 30-years repayment period including 3-year grace period : - Bank guarantee, pledge, mortgage Foreign Investor on the borrower s local assets - Loan on credit possible 13 13
Finance Solutions Overseas Business Credit CORPORATE FINACE : OVERSEAS BUSINESS CREDIT Borrower : Foreign companies in which a KEXIM Direct Loan Currency Korean company has an equity share : Basically a foreign currency Coverage : Up to 100% Interest Rate : Libor(or Swap) based floating rate or Korean Investor Equity Foreign Company Repayment comparable fixed rate : Maximum 30-year repayment period Term including 3-years grace period Security - Loan on credit possible to creditworthy borrowers 14 14
Finance Solutions Interbank Export Loans INTERBANK EXPORT LOANS Classification Short-Term Long-Term Credit Line KEXIM Loan Foreign Bank Sub-Loan Foreign Importer Eligible Transactions Financing Tenor Max. Financing Amount Less than 2 years 100% of contract amount Commodities, Services 2-10 years 85% of contract amount Trade Deals Korean Exporter Interest Rate Repayment (Floating) Libor + spread (Fixed) SWAP + spread Lump-sum or Equal semi-annual installments (Floating) Libor + spread (Fixed) CIRR + exposure fee Equal semi-annual installments 15 15
Finance Solutions Financial Guarantee Financial Guarantee KEXIM provides repayment protection (Financial Guarantee) for participants in the ECA covered commercial bank s loan KEXIM covers 100% of political and commercial risk Comprehensive risk coverage during entire project life Local currency guarantee program Introduced SAR Guarantee Program in the Saudi Jubail Refinery project to invite highly liquid local banks Comprehensive Risk Coverage Guarantee Conditionality Unconditional Paid upon Request Immediately Coverage Ratio 100% Insurance Conditional (claim investigation preceded) Within 2 months 90 ~ 100% Unconditional Guarantee Cover all of the principal and interest 16 16
SECTION 3 Recent KEXIM Supported Projects
Recent Supported Projects Recent projects Eurasia Tunnel Project (Turkey) U$ 280 Million Sponsored by SK E&C, YAPI, Merkezi Year 2012 Mong Duong II Coal-fired Power Plant (Vietnam) U$ 622 Million Sponsored by Posco Power, AES, CIC Year 2011 Year 2010 Year 2008 ~ 09 Saudi Jubail Refinery Plant (Saudi Arabia) U$ 545 Million Sponsored by Saudi Aramco, Total Uch II Gas-fired Power Plant (Pakistan) U$ 100 Million Sponsored by International Power Ma aden Fertilizer Project (Saudi Arabia) U$ 400 Million Sponsored by Ma aden, SABIC 18 18
Case Study 1 Turkey Eurasia Tunnel Project Outline of the Project Structure Ministry of Transportation, Maritime and Communications Turkey Treasury Shareholder Agt Implementation Contract ICDA DAA Korean Sponsor Turkish Sponsor Project Company (ATAS) Finance Agt K-EXIM K-SURE The business connecting the European and Asian continent by construction of underground tunnels in the underground of Bosphorus. EPC Contract EPC contractor (Sponsor JV) O&M Contract O&M contractor Commercial Bank EIB EBRD 19 19
Case Study 2 Barzan Gas Project Outline of the Project Structure Qatar equity 100% Qatar Petroleum (93%) Exxon Mobil (7%) Acquisition of gas development & Royalty Equity investment Prominent Sponsors AA(QP) and AAA(EM) rated Co-financing with the 34 international facilities The largest amount of support from K-EXM : U$ 1bil Lenders [ECA] [Commercial] Hyundai Heavy Industries (Offshore) EPC contract Finance Agt JGC (Onshore) Project Company O &M contract Ras Gas Offtaker contract Qatar Petroleum (Gas) Tasweeq (LPG) 20 20
Thank You! You Mi Park Senior Loan Officer, Inter-Korean Cooperation Fund ympark@koreaexim.go.kr 21