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28 | GTR EXPORT FINANCE SUPPLEMENT 2013 WWW.GTREVIEW.COM WWW.GTREVIEW.COM GTR EXPORT FINANCE SUPPLEMENT 2013 | 29 SPONSORED STATEMENT SPONSORED STATEMENT O ver the years, UniCredit has been building a comprehensive track record of asset-based ECA-covered finance deals based on a secured export finance lease scheme. The main rationale behind this has been to continue to support its European core manufacturing clients. The sectors involved have mainly been the aircraft and shipping industry. Such structure also benefits from the support of export credit agencies (ECAs) which provide insurance for these deals. The availability of this kind of financing necessitates compliance with the guidelines set forth under the Arrangement on Officially Supported Export Credits (the Consensus) signed among the OECD countries and, in the case of aircraft financing, the 2011 Sector Understanding on Export Credits for Civil Aircraft. An ECA-covered secured export finance lease enables banks to broaden their client basis to a larger number of operators looking to expand their asset base, including where the buyer’s country of residence does not provide clear regulation mechanisms. It also allows, in line with the Consensus, a repayment tenor of up to 12 years according to the asset category, which is much longer than what a bank would typically offer on a pure commercial basis. In this kind of financing, the ownership of the asset represents the main security for the lender, which, beside the evaluation of the credit standing of the lessee, operator and/or guarantor, also focuses on a loan-to-value analysis to make sure that the secondary value of the asset is always substantially in line with the lender’s expectations. The lender therefore concentrates on the residual market value (this assumes an extensive and dynamic secondary market) and UniCredit continues to support ECA-covered asset finance UniCredit’s Francesca Beomonte, head of STEF Italy and Beryl Terrin, STEF Italy, discuss the structure of export lease financing schemes. I n June 2011 UniCredit SpA signed an ECA facility agreement for the Russian domestic Airline UTair Aviation JSC to finance its acquisition of a fleet of 20 new ATR 72-500 regional aircraft. The commercial transaction was valued at US$426mn as per catalogue prices. UniCredit acted as co-mandated lead arranger and underwriter for 50% of the financing and played a key role as agent and security trustee. The deal has a tenor of 13.5 years and is 95% supported on a 50/50 basis by French export credit agency Coface and Italian export credit agency SACE. This transaction is one of the largest ever concluded for the ATR consortium, a 50/50 joint venture between EADS and Alenia Aeronautica (Finmeccanica Group). This complex export lease financing in Russia was closed thanks to a proactive teamwork among the manufacturer, the ECAs, the legal advisers, the airline and the banks. U niCredit is a solid European commercial bank, with leadership positions in Italy, Germany, Austria and Poland and a strong presence in other high-growth CEE countries. We are one of the largest European networks with almost 10,000 branches and more than 35 million active customers. With approximately 9,500 professionals in nearly 50 countries, Corporate & Investment Banking serves corporate and institutional clients out of the largest group of network banks in Western, Central and Eastern Europe. Committed to long-term partnerships with clients across all sectors, our relationship managers and product specialists create tailor-made solutions in a strategic dialogue with our clients and according to our core client offer: Corporate Banking and Transaction Services Structured Finance, Capital Markets and Investments Products Access to Western, Central and Eastern Europe. Global Transaction Banking (GTB) at UniCredit combines the local expertise of over 2,000 professionals with the knowledge and experience of a truly sophisticated global transaction bank. STEF, as UniCredit’s global business line for Structured Trade & Export Finance within GTB, supports the distribution networks with innovative and leading edge products. We are a global provider of integrated products for supporting export business from the first stages of preliminary negotiations by offering a wide range of tailor-made financing solutions (from supplier credits to complex financing structures). Each financing is customised and adjusted for the respective needs of our client. We benefit from first hand information from the main import and export markets via the dense network of UniCredit and have solid long-term relationships with ECAs, bilateral and multilateral financing organisations. the percentage level of coverage of the outstanding debt (capital + interests) represented by the asset secondary market value during the whole life of the financing. To give a brief overview of the set-up of an export lease financing, the funds are made available by the lender through a special purpose company (SPC) that acts as borrower and uses the proceeds of the loan to finance the purchase of the asset (the SPC acquires from the buyer the title of the asset through an assignment of the purchase agreement and leases the asset to the company operating the latter). The shares of the SPC are typically owned by a trust specifically set up for the transaction and indirectly controlled by the lender. A security package is created in favour of the lender which mainly consists of: a first priority mortgage over the asset, a first demand payment guarantee from the buyer on all the obligations of the lessee (if different than the latter) under the lease agreement, an assignment of the rights of the SPC as lessor arising from the lease agreement, and an assignment of all the rights under the insurances and manufacturer warranties over the asset. This structure is mainly used to: enhance the security position of the ECA-covered lender by structuring the financing transaction so as to ensure “offshore” (ie non domestic) ownership of the asset and to effectively give to the lender the rights of an owner (including, in particular, repossession rights) of the asset rather than simply rights as mortgagee, ensure that the asset is not captured in any domestic bankruptcy moratorium or stay procedures in the event of the buyer’s bankruptcy, and ensure that the ownership of the asset vests in a single purpose, ring fenced and bankruptcy remote company (as opposed to the buyer) thanks to the SPC status (ie it is not a subsidiary or affiliate or otherwise connected in any way or under the management or control of the buyer). Francesca Beomonte, Head of STEF Italy UniCredit, says: “STEF Italy is present both in Milan and Rome, with a lean organisation and dedicated teams with excellent know-how and combining global thinking with local knowledge”. She adds: “Our team benefits from a vast experience in handling ECA finance and a consolidated track record with Italian authorities, namely SACE and SIMEST. We have been involved for many years in complex export finance transactions including ECA-covered asset-based transactions within the aircraft and shipping sector. Our extensive positive track record has demonstrated our ability to arrange and administer such large and complex financing structures.” Deal analysis: Supplying ATR aircraft to UTair Aviation UniCredit’s Structured Trade & Export Finance Beryl Terrin, UniCredit Francesca Beomonte, UniCredit

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Page 1: SPONSORED STATEMENT SPONSORED STATEMENT...Committed to long-term partnerships with clients across all sectors, our relationship managers and product specialists create tailor-made

28 | GTR EXPORT FINANCE SUPPLEMENT 2013 WWW.GTREVIEW.COM WWW.GTREVIEW.COM GTR EXPORT FINANCE SUPPLEMENT 2013 | 29

SPONSORED STATEMENT SPONSORED STATEMENT

Over the years, UniCredit has been building a comprehensive track record of asset-based ECA-covered finance

deals based on a secured export finance lease scheme. The main rationale behind this has been to continue to support its European core manufacturing clients. The sectors involved have mainly been the aircraft and shipping industry. Such structure also benefits from the support of export credit agencies (ECAs) which provide insurance for these deals.

The availability of this kind of

financing necessitates compliance with the guidelines set forth under the Arrangement on Officially Supported Export Credits (the Consensus) signed among the OECD countries and, in the case of aircraft financing, the 2011 Sector Understanding on Export Credits for Civil Aircraft.

An ECA-covered secured export finance lease enables banks to broaden their client basis to a larger number of operators looking to expand their asset base, including where the buyer’s country of residence does not provide clear regulation mechanisms. It also allows, in line with the Consensus, a repayment

tenor of up to 12 years according to the asset category, which is much longer than what a bank would typically offer on a pure commercial basis.

In this kind of financing, the ownership of the asset represents the main security for the lender, which, beside the evaluation of the credit standing of the lessee, operator and/or guarantor, also focuses on a loan-to-value analysis to make sure that the secondary value of the asset is always substantially in line with the lender’s expectations. The lender therefore concentrates on the residual market value (this assumes an extensive and dynamic secondary market) and

UniCredit continues to support ECA-covered asset f inanceUniCredit’s Francesca Beomonte, head of STEF Italy and Beryl Terrin, STEF Italy, discuss the structure of export lease financing schemes.

In June 2011 UniCredit SpA signed an ECA facility agreement for the Russian domestic Airline UTair Aviation JSC to finance

its acquisition of a fleet of 20 new ATR 72-500 regional aircraft. The commercial transaction was valued at US$426mn as per catalogue prices. UniCredit acted as co-mandated lead

arranger and underwriter for 50% of the financing and played a key role as agent and security trustee.

The deal has a tenor of 13.5 years and is 95% supported on a 50/50 basis by French export credit agency Coface and Italian export credit agency SACE.

This transaction is one of the largest

ever concluded for the ATR consortium, a 50/50 joint venture between EADS and Alenia Aeronautica (Finmeccanica Group).

This complex export lease financing in Russia was closed thanks to a proactive teamwork among the manufacturer, the ECAs, the legal advisers, the airline and the banks.

UniCredit is a solid European commercial bank, with leadership positions in Italy, Germany, Austria and

Poland and a strong presence in other high-growth CEE countries. We are one of the largest European networks with almost 10,000 branches and more than 35 million active customers.

With approximately 9,500 professionals in nearly 50 countries, Corporate & Investment Banking serves corporate and institutional clients out of the largest group of network banks in Western, Central and Eastern Europe. Committed to long-term partnerships with clients across all sectors, our relationship managers and product

specialists create tailor-made solutions in a strategic dialogue with our clients and according to our core client offer: ●● Corporate Banking and Transaction Services

●● Structured Finance, Capital Markets and Investments Products

●● Access to Western, Central and Eastern Europe.

Global Transaction Banking (GTB) at UniCredit combines the local expertise of over 2,000 professionals with the knowledge and experience of a truly sophisticated global transaction bank.

STEF, as UniCredit’s global business line for Structured Trade & Export Finance within GTB, supports the

distribution networks with innovative and leading edge products.

We are a global provider of integrated products for supporting export business from the first stages of preliminary negotiations by offering a wide range of tailor-made financing solutions (from supplier credits to complex financing structures). Each financing is customised and adjusted for the respective needs of our client.

We benefit from first hand information from the main import and export markets via the dense network of UniCredit and have solid long-term relationships with ECAs, bilateral and multilateral financing organisations.

the percentage level of coverage of the outstanding debt (capital + interests) represented by the asset secondary market value during the whole life of the financing.

To give a brief overview of the set-up of an export lease financing, the funds are made available by the lender through a special purpose company (SPC) that acts as borrower and uses the proceeds of the loan to finance the purchase of the asset (the SPC acquires from the buyer the title of the asset through an assignment of the purchase agreement and leases the asset to the company operating the latter).

The shares of the SPC are typically owned by a trust specifically set up for the transaction and indirectly controlled by the lender.

A security package is created in favour of the lender which mainly consists of:●● a first priority mortgage over the asset,●● a first demand payment guarantee from the buyer on all the obligations of the lessee (if different than the latter) under the lease agreement,

●● an assignment of the rights of the SPC as lessor arising from the lease agreement, and

●● an assignment of all the rights under the insurances and manufacturer warranties over the asset.

This structure is mainly used to: ●● enhance the security position of the ECA-covered lender by structuring the financing transaction so as to ensure “offshore” (ie non domestic) ownership of the asset and to effectively give to the lender the rights of an owner (including, in particular, repossession rights) of the asset rather than simply rights as mortgagee,

●● ensure that the asset is not captured in any domestic bankruptcy moratorium or stay procedures in the event of the buyer’s bankruptcy, and

●● ensure that the ownership of the asset vests in a single purpose, ring fenced and bankruptcy remote company (as opposed to the buyer) thanks to the SPC status (ie it is not a subsidiary or affiliate

or otherwise connected in any way or under the management or control of the buyer).

Francesca Beomonte, Head of STEF Italy UniCredit, says: “STEF Italy is present both in Milan and Rome, with a lean organisation and dedicated teams with excellent know-how and combining global thinking with local knowledge”.

She adds: “Our team benefits from a vast experience in handling ECA finance and a consolidated track record with Italian authorities, namely SACE and SIMEST. We have been involved for many years in complex export finance transactions including ECA-covered asset-based transactions within the aircraft and shipping sector. Our extensive positive track record has demonstrated our ability to arrange and administer such large and complex financing structures.”

Deal analysis: Supplying ATR aircraft to UTair Aviation

UniCredit’s Structured Trade & Export FinanceBeryl Terrin, UniCredit

Francesca Beomonte, UniCredit