5 june 2014 adb, manila - asian exim banks · i. loan syndication (b loans) a/b loans program: a...
Post on 05-Sep-2020
6 Views
Preview:
TRANSCRIPT
Dai Chang SONG Guarantees and Syndications Unit Private Sector Operations Department
5 June 2014
ADB, Manila
1
I. Loan Syndication (B Loans)
A/B Loans Program:
A Loan : ADB’s direct lending from own resources
B Loan : Funded risk participation in an ADB loan to facilitate commercial cofinancing of ADB-assisted public or private sector projects.
ADB is the lender of record, without recourse to ADB for B Loans;
Commercial banks and other eligible financial institutions can participate in B Loans and share ADB’s Preferred Creditor Status (“PCS”);
2
I. Loan Syndication (B Loans)
Commercial Banks / FI
Borrower
ADB as
Lender of
Record
A Loan
$100
B Loan
$100
A Loan
$100
B Loan
$100
$200
Participation Agreement Facility Agreement
own
resources
A/B Loan Structure
3
On-shore Off-shore
I. Loan Syndication (B Loans)
Privileges and Benefits
B Loan enjoys the same privileges and immunities as ADB’s A Loans including:
exemption from restrictions on currency conversions and on remittance of interest payments and repatriation of principal;
exemption from withholding taxes;
reduced likelihood of rescheduling in the event of an external debt crisis in the borrowing country;
exemption from country provisioning requirements (where applicable).
*B Loans must be booked off-shore of the project/borrower.
4
I. Loan Syndication (B Loans)
Other Benefits
project appraisal
supervision and monitoring of project implementation
loan administration services
flexibility: can combine guarantees or political risk insurance (“PRI”) for credit enhancement
5
I. Loan Syndication (B Loans)
Eligible Financial Institutions
all reputable commercial financial institutions that are off-shore of the borrower/project country;
including, but not limited to commercial banks, insurance companies, pension funds, capital market participants, qualified institutional investors and other commercially-oriented entities.
6
I. Loan Syndication (B Loans)
Documentation
B Loan documentation comprises of:
a direct loan agreement between ADB and borrower;
a participation agreement between ADB and participating B Loan lenders.
The relationship between a B Loan lender and the borrower is indirect, although the borrower is informed of the lenders’ identities.
7
I. Loan Syndication (B Loans)
Administration
As lender-of-record, ADB administers B Loans on behalf of the participating B Loan lenders with the same standard of care it exercises for loans for its own account (A Loans).
In critical matters of importance, ADB does not act unilaterally but seeks the lenders’ views and consents prior to taking action as specified in the participation agreement.
8
I. Loan Syndication (B Loans)
Workflow for B Loans
9
Request to GSU
GSU market sounding
POSITIVE market response
Discussion on parameters - Amount, currency, tenor, pricing
expectations
Check with commercial banks on appetite, market conditions and risk-reward profile
NEGATIVE market response
I. Loan Syndication (B Loans)
10
POSITIVE market response
At least 2 proposals from banks Request for proposals
Evaluation of proposals from commercial banks
Mandate negotiation
Mandated bank DD process
Finalize terms and conditions
Update marketing materials IM, Investor presentations,
Appoint legal counsels
I. Loan Syndication (B Loans)
11
Launch syndication, Management presentation, site visit
Documentation, Investor Credit Process
Circulation of Documents
Allocation and Finalization of Documents
SIGNING
I. Loan Syndication (B Loans)
12
NEGATIVE market response
Request for proposals
Restructure with credit enhancements and/or
parallel loans
Discussion with Borrowers
Resound the market based on restructured terms
YES NO
I. Loan Syndication (B Loans)
Recent B Loan Transactions
1. China Gas Holdings Ltd. - USD 100MM ADB B Loan Facility
Purpose: Investments in gas supply projects in the PRC
Participants: ANZ (MLA), CBA (MLA) and 11 commercial banks
2. China Water Affairs Group Ltd - USD 100MM ADB B Loan Facility
Purpose: Investments in water supply projects in the PRC
Participants: RBS (MLA), KDB (MLA) and 16 commercial banks
13
I. Loan Syndication (B Loans)
Recent B Loan Transactions
3. China Everbright Environmental Energy Ltd - USD 100MM ADB B Loan Facility
Purpose: Investments in municipal waste-to-energy projects in the PRC
Participants: Mizuho (MLA) and 5 commercial banks
4. Indonesia Eximbank: USD 100MM ADB B Loan Facility
Purpose: Support government objectives on national energy conservations and facilitate SME exports and employment
Participants: ANZ, Bank of Nova Scotia, SMBC, Wells Fargo Bank (MLAs)
14
I. Loan Syndication (B Loans)
Track Record
ADB has approved 60 B Loans for 60 projects in 11 countries, for a total of USD3.91 billion.
15
16
II. “Blended” Finance with Eximbanks
What?
• Blending funds from Eximbanks/ECAs.
• Blending concessional funds from donors with private sector financing.
Why?
• To minimize project risks in projects in countries that typically cannot be done by public or private sector alone.
risks allocated between public, private sectors, and Eximbanks/ECAs.
• For demonstration effect, high developmental impact.
• Catalyze investments that otherwise would not happen.
17
II. “Blended” Finance with Eximbanks
How?
• Harmonize approaches with private sector investments in low income/frontier markets.
• Eximbanks/ECAs support for sponsors/projects.
• Provide concessional financing to “fill the gap” in the market.
18
II. “Blended” Finance with Eximbanks
Sample: “Blended” Finance Structure
2. Government
Lenders 1. ADB 2. Commercial Banks (with PRG and/or through B Loans) 3. Eximbanks/ECAs (parallel loans) 4. Concessional Funds
Equity Project Debt
Finance
Project Company EPC
Contract O/M
Contract
Project
1. Concessional Funds
19
Investors 1. Public/Private
Investors
III. Annex
1. ADB Safeguard Policy Statement (2009)
http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf
2. ADB Prohibited Investment Activities
forced labor or child labor;
production of or trade in weapons, munitions, and paramilitary materials;
production of or trade in alcoholic beverages, excluding beer and wine;
production of or trade in tobacco;
20
III. Annex
ADB Prohibited Investment Activities (Cont’d.)
production, trade or any activity deemed illegal under host country laws or regulations or international conventions and agreements or subject to phase-outs or bans, such as
Pharmaceuticals, pesticides, herbicides
Ozone-depleting substances
Polychlorinated biphenyls and other hazardous chemicals
Wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora
Transboundary trade in waste or waste products
21
III. Annex
ADB Prohibited Investment Activities (Cont’d.)
gambling, casinos, and equivalent enterprises;
production of or trade in radioactive materials, nuclear reactors and components;
production of, trade in, or use of unbounded asbestos fibers;
commercial logging or purchase of logging equipment for use in primary tropical moist forests or old-growth forests;
large-scale pelagic drift net fishing and fine mesh net fishing; and
production or activities that impinge on lands owned, or claimed under adjudication, by Indigenous Peoples, without full documented consent.
22
Contact Person:
23
Dai Chang Song Senior Guarantees and Syndications Specialist, OPSD dcsong@adb.org +632 632 6115
24
top related