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a March 18, 2009 Who's Still Lending?

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  • Stop! Wait! Government’s no longer the problem – it’s the solution!
  • Equality Fraternity Liquidity
  • True, a salary cap on Wall Street may limit the talent pool, but, on the other hand, if they get any more talented we’ll all be broke.
  • Transcript

    • 1. a March 18, 2009
    • 2. Who’s Still Lending? Non-Commercial Sources of Financing for Exports and Foreign Investment
    • 3. Outline
      • Exports and foreign investment
      • “Non-commercial”
      • Why is this topic important?
      • Non-commercial sources of financing
    • 4. Exports and foreign investment
      • Exports: Well…no need to explain
      • Foreign investment: FDI, not portfolio
      • Focus, therefore, on private-sector activity
        • U.S. exporters
        • U.S. firms making foreign direct investments
    • 5. “Non-commercial”
      • On the one hand, commercial banks
        • First American, Fifth Third, Chase, RBS, Wells Fargo/HSBC, Bank of Montreal, National City, etc.
      • On the other hand, government-owned financial institutions: “non-commercial”
        • Export credit agencies, multilaterals, regional development banks, etc.
          • Most are able to support private-sector trade and investment
      • Key issue: Relative appetites for risk
    • 6. Why is this topic important?
      • Exporters like to get paid (!)
      • Many foreign investors leverage their equity investments with debt financing
      • Some foreign investors want equity partners
      • Today’s global commercial banking system is severely stressed out
        • Commercial lenders seem a bit shy these days
    • 7.  
    • 8. Institutions
      • Export-Import Bank of the United States (Ex-Im Bank)
      • Overseas Private Investment Corporation (OPIC)
      • International Finance Corporation (IFC) of the World Bank
    • 9. Institutions
      • Inter-American Development Bank (IDB)
      • Asian Development Bank (ADB)
      • African Development Bank (AfDB)
      • European Bank for Reconstruction and Development (EBRD)
    • 10. Institutions
      • Yes, there are others, for example
        • Corporación Andina de Fomento (CAF)
          • Mixed public/private ownership
        • Banco Centroamericano de Integración Económica (BCIE)
    • 11. These institutions
      • Provide much-needed liquidity to the global system of trade and investment
      • Benefit for U.S. exporters
        • Facilitation of trade finance in difficult markets
        • Support of large capital projects
    • 12. These institutions
      • Benefit for FDI
        • Some invest directly in private-sector ventures
        • Some invest (or lend to) private equity funds
      • All are focused on emerging markets/developing countries
    • 13.  
    • 14.  
    • 15. Ex-Im Bank
      • [Separate presentation by Michael Howard, Midwest Regional Director of Ex-Im Bank]
    • 16.  
    • 17. Overseas Private Investment Corporation (OPIC)
      • Based in Washington, D.C.
      • U.S. Government agency
      • Supports U.S. private investment (FDI) in developing countries
        • Loans and loan guarantees for U.S.-invested ventures
        • Loans to regional equity funds
    • 18. OPIC
      • In 2007:
        • Supported 139 projects
        • Direct-loan portfolio at year end: $ 641 million
      • No trade finance program per se
    • 19.  
    • 20. International Finance Corporation (IFC)
      • Based in Washington, D.C.
      • Part of the World Bank Group
        • World Bank owned by 185 member countries
      • Focused on private-sector in developing countries
        • Direct loans
        • Equity investment, including funds
    • 21. IFC
      • Total 2008 loan/investment commitments: $16 billion
        • $11 billion directly
        • Mobilized an additional $5 billion
      • Global Trade Finance Program
        • IFC guarantees importers’ L/Cs and other instruments to facilitate trade
    • 22. IFC: Global Trade Finance Program
    • 23. IFC: Global Trade Finance Program
      • Countries with L/C issuing banks in the program
        • Argentina
        • Egypt
        • Pakistan
        • Russia
        • South Africa
        • Ukraine
        • Vietnam
        • Many others
    • 24. IFC: Global Trade Finance Program
      • U.S. L/C confirming banks in the program
        • ABN AMRO
        • Bank of America
        • Harris/Bank of Montreal
        • Citibank
        • Chase
        • Standard Chartered Bank
        • Wells Fargo HSBC Trade Bank
        • Many others
    • 25.  
    • 26. Inter-American Development Bank (IDB)
      • Regional development bank
      • Based in Washington, D.C.
      • Owned by 48 member countries
        • Including U.S. and others outside region
      • Loans and loan guarantees for both public and private sectors
      • Equity investment, including funds
    • 27. IDB
      • Total 2007 loan and guarantee approvals: $8.8 billion
      • Private sector
        • $2 billion in loans/guarantees
        • Mobilized an additional $2 billion
        • $227 million under Trade Finance Facilitation Program – TFFP
          • Lines of credit to trade banks for guarantees of L/Cs and other instruments
    • 28. IDB: Trade Finance Facilitation Program
      • TFFP examples
        • Panama: $10 million loan to Multibank, Inc.
        • Paraguay: $5 million loan to Sudameris Bank
        • El Salvador: $20 million loan to Banco Agricola
        • Jamaica: $7 million loan to First Caribbean International Bank
        • Guatemala: $40 million loan to Banco Industrial
    • 29.  
    • 30. Asian Development Bank
      • Regional development bank
      • Based in Manila, Philippines
      • Owned by 67 member countries
        • Including U.S. and others outside region
        • U.S. and Japan are largest shareholders
      • Loans and loan guarantees for both public and private sectors
      • Equity investment, including funds
    • 31. ADB
      • Total 2007 loan approvals: $8.2 billion
        • Plus $1.9 billion from Asian Development Fund
      • Private sector
        • $865 in loans approved for non-sovereign borrowers
        • $80 million in equity investments
    • 32. ADB
      • Trade Finance Facilitation Program – TFFP
          • Guarantees to L/C confirming banks
          • Revolving credit for regional exporters and importers
      • TFFP Issuing banks in
        • Azerbaijan
        • Bangladesh
        • Cambodia
        • Nepal
        • Sri Lanka
        • Vietnam and others
    • 33. ADB
      • U.S. confirming banks in TFFP
        • American Express Bank
        • Bank of America
        • Bank SinoPac
        • Chang Hwa Commercial Bank
        • Wachovia
        • Several others
    • 34.  
    • 35. African Development Bank (AfDB)
      • Regional development bank
      • Based in Tunis, Tunisia
      • Owned by 77 member countries
        • Including U.S. and others outside region
      • Loans and loan guarantees for both public and private sectors
      • Equity investment, including funds
    • 36. AfDB
      • Total 2007 loan approvals: $1.4 billion
      • Private sector
        • $630 million in loans approved
        • $117 million in equity investments
      • New Trade Finance Initiative: $1 billion
        • Announced March 12, 2009
    • 37.  
    • 38. European Bank for Reconstruction and Development (EBRD)
      • Regional development bank
        • Central and Eastern Europe, Russia, and “the ‘Stans”
      • Based in London
      • Owned by 61 countries and 2 intergovernmental institutions
        • Including U.S. and others outside region
        • U.S. is largest shareholder
    • 39. EBRD
      • Loans to both public and private sectors
      • Equity investment, including funds
      • Total 2007 commitments: €5.6 billion
        • 86% of “business volume” in private sector
        • Investment in equity funds: €400 million
        • Profit of €1.9 billion in 2007
    • 40. EBRD
      • Trade Facilitation Programme
        • Guarantees of trade transactions
          • 115 issuing banks in region
          • 640 confirming banks world wide
        • Short-term loans to banks and factors for on-lending to regional exporters and importers
        • Financed €777 million in trade transactions in 2007
    • 41.  
    • 42. Corporación Andina de Fomento (CAF)
      • Sub-regional development bank
      • Based in Caracas, Venezuela
      • Owned by 16 governments and 15 commercial banks in the region
      • 2007 investment and loan portfolio:
      • $10 billion
    • 43.  
    • 44. Banco Centroamericano de Integración Económica (BCIE)
      • Sub-regional development bank
      • Based in Tegucigalpa, Honduras
      • Owned by member countries and others
      • Largest financial institution in Central America
      • Supporting both public and private sectors
      • 2007 disbursements: $3 billion
    • 45. Conclusions
      • Financing exports and FDI will be challenging in 2009
      • Financing remains available from several non-commercial sources
        • However – they are not insulated from global liquidity situation
          • They raise funds in international capital markets
        • Lagging indicator in global recession?
      • Commercial sources will come back…
    • 46. Conclusions
      • In the meantime –
      • it pays to shop around!
    • 47.  
    • 48. Web Sites
      • Ex-Im Bank: www.exim.gov
      • OPIC: www.opic.gov
      • IFC: www.ifc.org
      • IDB: www.iadb.org
      • AfDB: www.afdb.org
      • ADB: www.adb.org
      • EBRD: www.ebrd.com
      • CAF: www.caf.com
      • BCIE: www.bcie.org
    • 49. Who’s Still Lending?
      • Non-Commercial Sources of Financing for Exports and Foreign Investment
      • CONTACT INFO:
      • Dean Ennes
      • Ennes International
      • (708) 445-0053
      • [email_address]