Best Export Finance Bank: Deutsche Bank

Runner-up: JPMorgan
Commended: Calyon
2007 Winner: Société Générale

While Deutsche Bank won only one award this year, just a few more votes in a handful of categories could have seen it walk away with a hatful. That reflects the many areas in which it operates to a high standard and, consequently, the universal respect with which it is regarded.

In export finance, Deutsche Bank’s sheer size is certainly telling. “The Structured Trade & Export Finance (STEF) team at Deutsche Bank is a truly global team with a presence in all the major import and export markets around the world,” says Klaus Michalak, global head of Deutsche Bank’s STEF team.

“Our product portfolio – including trade receivables finance, structured trade and commodity finance, syndicated and bilateral trade loans, export-credit agency (ECA)/political risk insurance (PRI)-covered loans as well as the ‘untieds’ – is comprehensive and attractive to our demanding clients. On top of that, product expertise, structuring and transactional skills as well as the ‘service orientation’ of the team are all well received by the industry,” says Michalak.

In the last year, Michalak and everyone involved in trade finance at Deutsche have certainly been busy. The Bank’s award win is based not on one or two big or particularly innovative deals, but on a whole series of impressive deals that have provided a tremendous amount of value to clients.

Notable among these are several structured commodity trade finance deals. These include a $3.2bn structured credit facility for Russian steel-maker Evraz, a record-breaking $1.5bn pre-export finance and revolving trade finance facility for Ukrainian mining and steel conglomerate Metinvest, and an especially innovative $180m dual-commodity loan for Georgia’s Madneuli, a company that accounts for one-tenth of the Caucasian state’s exports.

It is also worth noting Deutsche’s work in opening up Angola and helping the southern Africa state, which is still recovering from a long and bitter civil war, to rebuild its infrastructure, a country that many banks still fear to tread outside of the oil and gas industry. In April, Deutsche signed a €225m deal to finance road reconstruction in the capital Luanda, the capital of Angola, the biggest under a framework put together in 2003 that has facilitated investments of more than €800m across Angola.

For the future, Michalak expects to see a rising number of ‘mega-projects’, with a large transaction size and correspondingly complex financing demands. Given the strong partnership that STEF’s Global Distribution team has built up over the past years, Deutsche is well prepared to continue to address clients’ requirements appropriately.

Greenhouse-gas reduction via carbon credits and renewable energy projects will also loom increasingly large over export finance. “Increasingly, such projects happen in emerging markets. The energy produced by, say, a wind farm generates cash flow in local currency, while the equipment supplier will surely want to see payment in hard currency.”

“The need for local currency finance will, therefore, increase so we need to adapt to this and make use of appropriate financing mechanisms, including ECA cover in local currency, for example. This requires local funding capabilities and IT, not to mention covering local legal issues,” says Michalak.

One thing is certain: Michalak and the team at Deutsche Bank expect to be extremely busy for the foreseeable future. There has been a resurgence in demand for export finance and there are a lot of large-scale projects in the pipeline from all over the globe.

To that end, Deutsche Bank has beefed up the strength of its STEF hubs around the world. “And with transactions getting more and more complex (and bigger) we have intensified cross-sell and co-operation within Deutsche Bank, as well as our product development capabilities,” says Michalak.

“The Structured Trade & Export Finance (STEF) team at Deutsche Bank is a truly global team with a presence in all the major import and export markets around the world.”

Klaus Michalak, Deutsche Bank