denotes premium content | Jan 6 2009 Trade & Forfaiting Review magazine archive
Volume 10 Issue 4
The annual ‘Deals of the Year’ issue is always a tough nut to crack. And this year has been no exception. Just as the process of closing a deal can try the patience of even the most seasoned of bankers, so it is with selecting the best of the year’s transactions. That said, as with many lengthy and oftentimes painful experiences, the rewards are there to be seen in the end.
2006 saw some impressive deals covering a wide range of emerging market jurisdictions. This year, 31 transactions spanning more than 30 countries receive an award.
BNP Paribas showcases its strength with a selection of transactions that are as structurally diverse as they are geographically. It heads the leader board for the third year running with eleven winning deals.
Also demonstrating superior structuring capability is Deutsche Bank, which submitted an exceptionally strong pitch highlighting its increasing global reach. It follows closely behind with eight winners.
Meanwhile, JPMorgan Chase, Citigroup, Natixis, ING, Calyon, Standard Chartered, BBVA and ABN Amro all perform well. Special recognition goes to the European Bank for Reconstruction and Development and insurance underwriters for their unique $183m trade facilitation deal that closed last November following four years of tough negotiations (see ‘Landmark trade deal opens up new markets’).
With that in mind, and in recognition of the far-reaching skills needed to successfully close a deal, Trade & Forfaiting Review examines the psychology behind dealmaking in ‘Mind games’, this issue. According to experts, in the end psychological factors can have just as much impact as hard numbers.
For instance, why does an individual refuse to close a transaction even though it’s good on paper? Why does an investment committee make decisions in the aggregate that are poor risk? Why do most of us think we are smarter and more capable than we really are? And how does this overconfidence affect dealmaking, especially when the negotiator on the other side of the table is similarly certain of his or her abilities?
Or, in the words of philosopher Bertrand Russell, “The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.”
Congratulations to all our deal winners and thanks to all banks and institutions that took the time to send us their submissions. We hope you enjoy this issue.
Michele Martensen, Editor
Features
Navigating the Ukrainian court system
Identifying deal opportunities in Ukraine is the easy part. Before that contract is signed, though, take care to follow a few legal precautions, write Arthur Nitsevych, partner, and Ivan Movlyak, senior lawyer, at Ukrainian law firm ‘International Law Offices’, Kiev.
Biofuels in the EU: a new chapter?
As the European Union seeks to promote biofuels as part of its green-energy bid, concern is growing over the feasibility of increased biofuel production given its reliance on agri-commodities. End users struggle with surging prices of grains and oilseeds, claiming the additional demand from the biofuels industry as culprit, write Martin van Vaals and Susan Hansen at Rabobank. So how will the EU reconcile this with its policy on biofuels? Van Vaals and Hansen examine the issues.
The class of 1989
Nearly twenty years after the fall of the Berlin Wall, most Central and Eastern European countries have graduated from their erstwhile emerging market status. Yet some bankers worry that trade and commodity structures are unravelling far faster than they should. Erika Morphy reports.
Mind games
Yes, you need to be focused on pricing, margins and the amount of risk you are willing to bear in any one transaction. But there are other factors at work as well when you negotiate a deal. Erika Morphy reports.
Deals of the Year: Celebrating the best
2006 saw some impressive deals covering a wide range of emerging market jurisdictions. This year, 31 transactions spanning more than 30 countries receive an award...
Coface: Debt and global uncertainties increase emerging market risk
Emerging markets are always vulnerable to a number of risks: a sudden economic downturn, perhaps fuelled by an exchange rate crisis, or local governance problems that causes investor confidence to decline, or a geopolitical conflict that unexpectedly intensifies...
Regulars
Aluminium consolidates
Antoine Pacreau, director for metals in the natural resources unit of the commodity finance division of Natixis, examines Rusal’s role in the formation of the world’s largest aluminium producer.
60-second interview: Roger Schwartz, Aon
Every January Aon surveys the political risk and trade credit environment of the past twelve months and then looks forward to the next twelve. As senior vice president and national practice leader for Aon’s political risk division what is your final prognosis for 2006?
Letter From Hong Kong
It is not every day that you can compare yourself with a country, writes David Sullivan. Recently a Hong Kong politician stood up in parliament and said, “Hong Kong has become so fat that it cannot even put its own socks on”. Reading this I was ashamed to think that those morning hopping exercises where I try to see my feet over my belly or try to slip the sock on before the leg slips down again are becoming progressively worse. Every morning, by the time I put my socks on I am so worn out I need to take a rest before getting to the underpants...
Dual dynamics
Unpredicted credit shocks aside, the outlook for trade finance in 2007 will follow a dual dynamic. It offers both more of the same, and a wholesale change in delivery, writes Marilyn Spearing, global head for trade finance and cash management corporates at Deutsche Bank, London and Frankfurt.
