Trade Finance Syndications.ppt
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1、Trade Finance Syndications,Our expertise Powering your ambition,14th April 2009,2,Disclaimer This presentation has been prepared by Standard Chartered Bank (“SCB”) for restricted distribution. Neither SCB nor the distributors nor any of its affiliates and/or their directors, officers, employees shal
2、l in any way be responsible or liable for any losses or damages whatsoever which any person may suffer or incur as a result of acting or otherwise relying upon anything stated or inferred in or omitted from this presentation.This presentation is for information purposes only and is based on informat
3、ion available to the public from sources that SCB believes to be reliable, but no representation is made that it is accurate or complete, and no information herein should be relied upon as such. Opinions and projections found in this presentation reflect our opinion as of the presentation date and a
4、re subject to change without notice. This presentation is neither intended nor should be considered as an offer or solicitation, or as the basis for any contract, for purchase of any security, loan or other financial instrument.,3,Syndications,Life is not the same anymore: Banks in trouble Capital i
5、s scarce Basel II is limiting scope of operations Return on Assets and Return on Equity are at the forefront of the lending decision Volumes are down Pricing is upOptions are limited: Leverage & Mezzanine are dead Hedge Fund involvement in the market is waning Underwriting capacity is scarce due to
6、decrease in retail investors / risk appetite & capital US/Europe seeing maximum tenor decreasing to 1-2 years. Non-Performing Icelandic / Russian / Eastern European assets eating up excessive amounts of capital due to Basel II requirementsYet deals are still being done,4,Banks in Trouble,Lehman Brot
7、hers = GoneABN AMRO = RBS / Fortis / SantanderRBS / Fortis / Lloyds / Citi = Part NationalisedMerrill Lynch = Bank of AmericaBear Stearns = JP MorganSubprime / CDOs / RMBS / CMBS have destroyed balance sheetsWritedowns have lead to massive losses eroding years of retained earnings and resulting in e
8、xpensive bailoutsThe future is uncertain!,5,Capital is Scarce,New World: Liquidity is tightWritedowns eat away at capital lowering lending capabilitiesBalance Sheets are weighed down by past lendingReversion to home marketsUpward re-pricing of risk due on the grounds of credit and liquidityRights-Is
9、sues Done with varying degrees of success,6,Basel II,7,Volumes are Down:,8,Pricing is Up:,9,Leverage is Dead,10,Loan Syndication,Yet deals are still being done,11,Success in Europe,Trafigura: $520m, 27th March 09, 1 year RCF, 250bp (All-in) Up from 80bp in 2008 ED&F Man: $1,251m, 17th Feb 09, 1&2 ye
10、ar RCF, 350/412.5bp (All-in) Up from 85/105bp in 2008 Stemcor: - $400m, 31st March 09, 364-Day, L+350bp (All-in) Up from 155bp in 2008WHY? These transactions are trade or commodity related Short tenor Well priced (approx 3x previous years all-in pricing) Have strong relationships with banking group
11、Are self-liquidating,12,Failure in Europe: Lending alone is not attractive anymore,Central & Eastern Europe: Only 1 successful syndication in H2 2008 Out of 31 Financial InstitutionsWhy? Lack of relationships & ancillary business Deterioration of credit (Sovereign / Corporate & FI) Went to the marke
12、t for USD when Costs of Funds where very high Yield driven participation played a large part in previous financing Result: Eurozone Banks have over $1.5 trillion of exposure to Central and Eastern Europe. Erste, RZB, Soc Gen, UniCredit & KBC who were all active players in the loan market, have the m
13、ost substantial known exposures. National Focus: Banks are pulling back within their borders and focussing on core corporate client e.g RBS, Commerzbank Iceland: The collapse of Landsbanki & Kaupthing lead to the country defaulting,13,Failure in Europe: Name alone does not sell anymore,Porsche - 10b
14、n, 24th March 09, 1 year RCF, L+575bp All-in (Implied Rating BBB):Drew down RCF in 2008 priced at L+45bp (All-in) when Lenders Cost of Funds where greater than L+100bp, which angered Lenders. Went to the market in Feb 2009 to raise 12.5bn, 10bn to refinance and an additional 2.5bn for General Corpor
15、ate Purposes (GCP). Initially offered L+475bp and was shortly afterwards forced to increase fees by 50bp to attract Lenders. Only managed to raise 8.55bn as of the day before repayment date. Increased margin by a further 50bp and managed to secure 10bn for the refinance but not additional 2.5bn for
16、GCP. Had to secure the facility with shares in Volkswagen (2008 RCF was unsecured). Technically Defaulted as repayment of Existing Facility was a day late.As a result, Porsche paid 10x the price of their previous transaction & had to provide security as they misjudged the market!,14,Bonds Prices and
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