Trade & Forfaiting Review Magazine Archive

Trade & Forfaiting Review magazine archive

Volume 9 Issue 2

Increasing competition from the private sector and reduced margins have prompted export credit agencies (ECAs) to reexamine their position in the export-finance market. With the private market demonstrating a greater appetite for political risk and a willingness to finance medium term, and in some instances, long term, many ECAs are feeling the squeeze.

In addition, as RZB’s Ingeborg Bauer-Kunst points out in our cover story ‘Changing Gear’, demand for ECA-covered finance is increasingly coming from the buyers’ side. The upshot is ECAs have become more open to corporate risk. Conventional ECA coverage was largely based on a local bank guarantee and the underlying corporate risk was not examined that closely, says Bauer-Kunst. Now, ECA financing has become far more structured.

Elsewhere, we look at trade-finance business in Iran (‘Quietly Moving In’). This proved a tricky article to source. Given the political sensitivity and the current jostling for deals, a number of banks were (understandably) reticent about discussing their activities in this market. And some, although agreeing to talk to us initially, later withdrew their comments. That said, the final article provides an insightful guide to the country as a current and future source of trade business.

Looking ahead to 2006, Trade & Forfaiting Review (TFR) is now accepting submissions for its third annual ‘Deal of the Year’ awards. Last year, TFR received a record number of entries, with 37 deals finally selected for praise. This year we’re scaling it down slightly. Fewer transactions will be recognised, making both the selection process and the competition even tougher. Please send all suggestions to me at mmartensen@ark-group.com by 1 December 2005. Successful deals will be announced in our special awards issue in February 2006. Best of luck to you all.

In the meantime, I hope you enjoy this issue. As always, if you have any comments or suggestions, or would like to contribute to a future issue of TFR, I would love to hear from you.

Michele Martensen, editor

Features

The Road to Finance City Free
Robert Parson, partner in the London office of Clyde & Co, and Alec Emmerson, partner in Dubai, examine the opportunities and challenges awaiting trade finance banks in Dubai.

Brave New World Free
Collateral management is by no means a new concept in the commodity trade finance market. After a tumultuous decade of development, most understand the mechanics of this well-used tool, but many misconceptions still prevail, says Adam Wilkinson, head of collateral management for SGS in the UK.

Rogue Business Free
A hot market for trade financiers, Ukraine has hardly been out of the news over the past year. But what are the risks? Amanda Greene reports with an analysis of the Worldwide Chemical deal that went awry.

Quietly Moving In Free
Iran has become one of the worst kept secrets of the Middle East, as bankers and companies aggressively seek to do business in the oil-rich emerging market. Amanda Greene reports.

Innovation, Innovation, Innovation Free
Not ones to rest on their laurels, Dutch banks are spicing up the market with a host of new and innovative trade and commodity-finance products. Erika Morphy reports.

Regulars

Emerging-market debt pricing Free
Nigeria and the Paris Club have signed an agreement which includes a cancellation of 67% of Nigeria’s external debt stock...

Following IMF reviews of the standby facility granted earlier this year, and a successful restructuring of the country’s private debt, the Paris Club has agreed to reschedule $137m of the Dominican Republic’s debt service payments due to the Club in 2005...

Changing Gear Free
With the shift toward corporate risk among export credit agencies gathering pace, Erika Morphy takes an in-depth look at developments in the export-finance market.

Latin America: The Next Challenge Free
Gavin Melluish, director, trade and export finance at BBVA in London, discusses the merits of trade finance as a stimulus to intra-Latin American trade.

60-Second Interview: Oral Draman Free
Oral Draman, executive director of trade finance at GarantiBank International (GBI) in Amsterdam, shares his views on developments in the trade-finance market.

Tapping the Reservoir Free
Natexis Banques Populaires is at the forefront of a structural shift in the commodity finance market – the growth in reserve-based lending to small and medium-sized emerging market producers. Laurent Lacoste, head of energy at Natexis Banques Populaires’ commodity division in Paris, explains the technique.

Letter from Hong Kong: David Sullivan Free
Zinc and lead producers can get a better price for their product in China than export it at world market prices. The differential is a bit narrower with lead but on the whole smelters have been agreeing to export a portion of their production simply to underpin US-dollar financing from an offshore bank...

Market View: Bernard Zonneveld Free
After the break up of the USSR in 1991 when the domestic economy collapsed, producing companies were suddenly faced with a lack of knowledge about the domestic and international markets – how to sell their product and how to gain raw material inputs needed for the production process...

Country-risk appetite Free
Despite the continuing high-level of oil prices, the seemingly inexorable rise in US rates and the malaise in the US stockmarkets over the last month, interest in emerging-market trade-related transactions has been maintained...