ASIGEST HOLDING MEETING SOFIA 2016 BOND CREDIT & POLITICAL RISK - PowerPoint PPT Presentation

ASIGEST HOLDING MEETING SOFIA 2016 BOND – CREDIT & POLITICAL RISK

BOND Is an instrument used to guarantee that an obligation to do or to pay will be fulfilled more specifically The Surety guarantees a Third Party that the Contractor of the Bond will fulfil his obligation

BOND A Surety Bond is based upon an underlying CONTRACT CONTRACT must be in writing Surety will guarantee the Obligations set forth in the CONTRACT Construction Contract Purchase Agreement Maintenance Agreement Generally any Contract containing an Obligation...

BOND Unlimited Types (any obligation that can be guaranteed by a Third Party) but mainly: Contract Bonds (for construction Contracts) Bid Bond Performance Bond Payment Bond Advance Payment Bonds Maintenance Bonds Supply Contract Bond Custom Bond Licence and Permit Bonds Court Bonds

BOND We can support corporates to obtain first demand insurance bonds, such as: Bid Bond Advance payment Bond Performance Bond Maintenance Bond Payment Bond ADVANTAGES Possibility of freeing business resources in favour of cash and ordinary finance. Possibility to develop new business and new marketing strategy

BOND ¡ ¡ ¡ Bid Bond - Usually required in connection with Tenders - It guarantees ¡ ¡ that the Bidder if awarded the contract will enter into the contract at the price bid and will provide the prescribed Performance and Payment Bonds Performance Bond - Guarantees the full and due performance of the contract Advance Payment Bond - Requested when the Owner is pre-financing the Contractor, to guarantee that the Contractor will perform the works corresponding to the amount paid Maintenance Bond - Guarantees the Maintenance Contract signed after Completion of works and therefore the Obligation of the contractor to stand for defective workmanship or material Payment Bond Guarantees that the contractor will pay certain subcontractors, labourers and material suppliers associated with the project

ADVANTAGES ¡ ¡ ¡ ¡ ¡ For Contractor: Demonstration of reliability (more competitive) Does not influence the line of Credit (LOC) Suppliers may lower prices Usually cheaper than Letter of Credit

ADVANTAGES For Owner: Security of having a Prequalified Principal Unlike LOC, Bonds remain in force for the duration of Contract Relieve from Risk of Financial Loss

POTENTIAL CLIENTS Public Sector (might be required by the law) • State and Local Government • State owned enterprises Private Sector • Private Owners (to assure Project completion) • Lending Institutions (to protect lending capital) • General Contractors (to mitigate default due to subcontractor failure) Banks

SURETY We can offert to banks the possibility to access a high regulated insurance market to obtain counter guarantees either on a new deal or on already issued bonds if the bank is overloaded ADVANTAGES the bank does not have to share its own business with other banks, good way to fill up capacity on large deals, possibility to avoid over exposure on a country or an entity, free financial capacity for new deals

CREDIT & POLITICAL RISKS (CPRI) We can support corporates and financial institutions to obtain covering of: • non payment under an export documentary credit up to medium term • default by corporate and sovereign borrowers on trade or non trade related loans & obligations • non payment under supply contracts with a single buyer / single transaction risk and up to medium term • pre-shipment and manufacturing risk • pure political risk relating to investments and physical properties in emerging markets • unfair call of contractual bonds

CREDIT & POLITICAL RISKS (CPRI) ADVANTAGES • mitigation of commercial and political risk • possibility to obtain confirmation or re-financing of LCs • possibility to discount debt instruments even without recourse to the exporter • mitigation of credit risk under Basel III as an alternative to syndications • possibility to go beyond traditional multi-buyer trade credit insurance

Commercial Market Overview (CPRI) “Company” with high ratings by S&P, Fitch and A.M. BestAIG Aspen - Atradius - Axis - Chubb - Starr Insurance & Reinsurance - Coface - Euler Hermes – FCIA - Fidelis - Garant - Ironshore - lancashire Insurance - AWAC (LAU) - Liberty Mutual - Markel International Insurance Company - Endurance - Sovereign - Swiss Re Corporate Solutions - Tokio Marine - XL Catlin – Zurich “Lloyds Markets” rated A+ by S&P Acappella - Amlin - Antares - ANV - Argo - Ark - Ascot - Aspen - Beazley - BRIT - Canopius - Channel - Chaucer - Chubb - Starr - Endurance - Hardy - Hiscox - ANV 5820 (Jubilee) - Tokio Marine Kiln - Liberty Syn Mgmt - Marketform - MAP - Markel International – Novae - Nexus CIFS - O’Farrell - Pembroke - Talbot - StarStone - WR Berkley - XL Catlin

How to set an enquiry (CPRI) Minimum amounts: 1 million USD / EUR • Supplier • Buyer • Guarantor (if any) • Goods / Project: a short description • Amount and Currency • Terms of payment (if deferred, specify if semi-annual, etc and specify percentage of down payment) • Method of payment: promissory notes, Letter of credit, etc • Number and date of shipment(s) (approximately) • Status of commercial negotiations (early stage, advanced) • ECA’s preliminary view (if any)

SUPPORT & CONTACTS ¡ ¡ ¡ ¡ MARCO ¡TERNULLO ¡ CREDIT ¡& ¡POLITICAL ¡RISKS ¡/ ¡SURETY ¡ ¡ marcoternullo@alphabroker.it ¡ ¡ ¡ Mobile ¡+39 ¡338 ¡20 ¡59 ¡960 ¡

CMR OPPORTUNITY ¡ ¡ ¡ INSURANCE COMPANY : AIG POLICY HOLDER : CONSORZIO PIU’ SERVIZI CLAIMS PROCEDURES : DIRECTLY ANNUNCED AND SETTLED WITH L.A. LOSS ADJUSTER : Cunningham Lindsey Lercari S.r.l. ¡ ¡ ¡ ¡ ¡

CMR OPPORTUNITY ¡ ¡ ¡ ¡