Norwegian public financing for Argentina Export Credit Norway AS - PowerPoint PPT Presentation

Norwegian public financing for Argentina Export Credit Norway AS Otto Søberg, Chief Executive Officer Argentina, March 2018

Export Credit Norway: competitive financing to buyers of Norwegian capital goods and services STABLE LONG TERM FUNDING FROM THE COMPETITIVE FINANCING NORWEGIAN GOVERNMENT INTEREST RATES 2

The Norwegian export financing system The Norwegian Parliament (Stortinget) Ministry of Trade, Industry and Fisheries (NFD) Financing on behalf of the Norwegian government Guarantees on behalf of the Norwegian government Loans guaranteed by banks/financing institutions/GIEK to Export Credit Norway, banks and others

Norwegian instruments for innovation and development 1 Development 2 Marketing 3 Sales 4 Security Support for research, development, Towards buyers, banks and Assist companies with financing Avoid loss before / after delivery commercialisation others and risk reduction for exporter, foreign buyer or their banks Export Credit Norway AS GIEK (Garantiinstituttet for eksportkreditt) GIEK Kredittforsikring AS Embassies Innovation Norway The Research Council of Norway SIVA

The parties involved in a transaction TENDER / CONTRACT NEGOTIATIONS Exporter(s) Exporter or buyer must apply for export Norwegian supplier(s) financing before Norwegian contract award FUNDING BUYER/ BORROWER GUARANTEES BANK*/GIEK *Loans from Export Credit Norway must be guaranteed by the Norwegian Guarantee Institute for Export Credits (GIEK) and/or one or more acceptable banks/financial institutions. The guarantors will issue loan guarantees in favour of Export Credit Norway after they have conducted a favourable credit assessment of the project and the borrower 6

General terms OECD REPAYMENT PERIOD LOAN AMOUNT NORWEGIAN CONTENT ▪ All loans must comply ▪ ▪ Capital goods: up to ▪ Must account for at least Generally: up to 8½ years (Category II 10 years) with the OECD 85% of contract value 30% of the contract amount Arrangement ▪ ▪ Ship financing: up to Ships: up to 12 years ▪ Renewable energy: up to 80% of contract value 18 years

8 Our product offerings: Corporate Credit line / Project loans Credit frame Financing SMB Lease Intra Company Financing Financing Financing Lending to Retrofit Governmental banks Financing Financing («on-lending»)

9 Our product offerings - detailed ▪ Unsecured financing (negative plegde) to borrowers with a strong balance sheet Corporate ▪ Makes it easy to compare terms and conditions with similar loans unsecured financing ▪ Easy to establish ▪ Standardized and simplified loan documentation agreed with GIEK SMB ▪ Standardized routines and work procedures together with GIEK Financing ▪ Normally limited interest from banks in cross-border financing for smaller transactions. Therefore Eksportkreditt Norge and GIEK have an important role in this segment ▪ Credit framework agreement with shipowners for upgrading of ships to meet new standards Retrofit ▪ Relevant for among others ballast water treatment systems and Financing «scrubbers» to reduce sulphur pollution

10 Our product offerings - detailed ▪ Financing that relies primarily on the project's cash flow for repayment, with the project's assets, rights and interests held as Project secondary security or collateral Financing ▪ Project finance is especially attractive to the private sector because companies can fund major projects off balance sheet ▪ Financing to a leasing company that buys the asset from the Norwegian exporter Lease ▪ Lease payments are directly charged as an expense. The end user Financing does not have to tie up capital ▪ Financing to foreign governments or state owned companies guaranteed by foreign governments Governmental ▪ Typically infrastructure projects Financing ▪ GIEK may guarantee up to 100% of the loan (political risk only)

11 Our product offerings - detailed ▪ Framework agreement with foreign buyers that source multiple contracts over time from Norwegian exporters Credit line / ▪ Gives a strong incentive to buy from Norwegian exporters Credit frame ▪ Typically used by oil companies and oil service companies ▪ Financing from a Norwegian exporter to a foreign daughter company that buys equipment and services from the Norwegian mother company Intra Company ▪ Typically the foreign daughter company will lease the equipment to Financing end users abroad ▪ Improves the competitive position of the foreign daughter company ▪ Financing to a foreign, local bank that on-lends to the local buyer Lending to ▪ The credit risk will be on the foreign bank banks ▪ Simplifies credit approvals and operational issues related to the («on-lending») loan agreement

Fixed or floating competitive interest rates Fixed rate Floating approx approx interest rate 60% 40% «CIRR» CIRR loan (Commercial Interest Reference Rates) Market loan • • Fixed interest rate for the whole period Priced in accordance with prevailing market conditions • • The rate is adjusted by OECD on the 15th of every Floating rate (IBOR) • Most convertible currencies available month • • Export Credit Norway quotes CIRR rate before contract Compliance with state aid regulations award – a free-of-charge fixed interest rate option • All OECD currencies available The interest rate choice may The borrower may compare the fixed CIRR remain open until shortly before rate to the market-based interest rate and choose the most attractive option. final drawdown of the loan. 12

GIEK guarantees Buyer credit Bond Production loan Buyer credit guarantee guarantee guarantee guarantee Secures the foreign buyer For export related Facilitates financing to Can be provided to against loss if the Norwegian investments in Norway buyers of Norwegian export. Norwegian exporters that exporter does not fulfil its Provides a guarantee to a The loan can be from need financing of offer, if the advanced bank that finances a Norwegian or foreign banks production costs linked to a company’s investment in payment is lost, or if the or Export Credit Norway. specific export contract. exporter does not carry out Norway. The investment delivery. must directly or indirectly lead to export. Supplier credit Other Contract Investment guarantee guarantees guarantee guarantee ▪ Ensures that the exporter Letter of credit Protects the exporter from Facilitates Norwegian ▪ receives payment for sales Power purchase suffering losses during the investment in countries with ▪ on credit to a foreign buyer. Tender production period as a result high political risk. The ▪ Building loan of contract non-fulfilment by guarantee may cover either a foreign buyer. equity or loans. GIEK can cover both commercial risk (max. 90 %) and political risk (max. 100 %) 05/04/2018 13

Global portfolio 14

Thank you. Otto Søberg CEO +47 905 57 993 Eksportkreditt.no oso@eksportkreditt.no kontakt@eksportkreditt.no Tel: (+47) 22 31 35 00 Hieronymus Heyerdahls gate 1 P.O. Box 1315 Vika, 0112 Oslo, Norway Follow us:

Appendix for distribution

The application and the loan process The buyer repays the loan to Export Credit Norway Buyer applies for The loan is a loan guarantee disbursed on from GIEK / delivery Loan agreement Export Credit bank negotiated Norway issues between the financing outline parties and CIRR option Exporter or buyer contacts Export Credit Norway The loan application must be sent before commercial contract is signed. 17

What should the application include? • Name of buyer, borrower and supplier • Type of delivery and time of delivery • Estimated contract value • Estimated Norwegian content in the contract • Type of loan, amount, currencies, tenor APPLY TODAY eksportkreditt.no 18

The free interest rate option The free interest rate option (CIRR) Interest rate (%) Fixed CIRR-quote date Market interest rate (fixed or floating) Time Application date Contract signed Delivery Repayment period 19

CIRR Loans Fixed pre-contract interest rates for the period 15.02. – 14.03.2018 in % pa. 5½ – 8½ years < 5 years 9-12 years NOK 2.55% 2.55% 2.55% USD 3.35% 3.58% 3.71% EUR 0.78% 1.14% 1.46% 20

Market Loans Indicative price levels as of February 2018 for loans with 100% ECA guarantee* Margin over IBOR in basis points (bps) Market binding period 3 years 5 years 8 years 10 years USD – 3 Months Libor 60 70 85 95 EUR – 3 Months Euribor 35 40 60 70 NOK – 3 Months Nibor 40 50 70 85 * excluding guarantee premiums 21

Mobile telephone masts in Gabon Exporter Buyer ▪ Company: Eltek AS ▪ Company: Energy Vision Ltd. ▪ Location: Drammen, Norway ▪ Location: Mauritius ▪ Industry: Power conversion technology ▪ Industry: Telecom Power Infrastructure Services ▪ Employees: 40 Employees: 197* ▪ Operating income: NOK 2 244 million* ▪ 2017E revenue: USD 3.8 million Product Financing ▪ Type: Electricity supply systems for 350 mobile ▪ Solution: SMB B-loan ▪ Guarantors: GIEK (90%) Eltek (10%) telephone masts *2016