• Save
Presentation Euro Asian Space Week - 26 November 1998
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Presentation Euro Asian Space Week - 26 November 1998

  • 769 views
Uploaded on

Telecom Satellites: Bank Financing and Insurance Requirements. Proceedings of the Euro-Asia Space Week on Cooperation in Space - "Where East & West Finally Meet", 23-27 November 1998, Singapore.

Telecom Satellites: Bank Financing and Insurance Requirements. Proceedings of the Euro-Asia Space Week on Cooperation in Space - "Where East & West Finally Meet", 23-27 November 1998, Singapore.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
No Downloads

Views

Total Views
769
On Slideshare
765
From Embeds
4
Number of Embeds
1

Actions

Shares
Downloads
1
Comments
1
Likes
1

Embeds 4

http://www.linkedin.com 4

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide
  • Telecom Satellites: Bank Financing and Insurance Requirements 26 November 1998 Credit Lyonnais

Transcript

  • 1. Telecom Satellites: Bank Financing and Insurance Requirements Euro-Asian Space Week Singapore 26 November 1998 26 November 1998 Credit Lyonnais
  • 2. Telecom Satellites: Bank Financing and Insurance Requirements – Main points
    • Satellite Project Financing – Key Features
    • Banks requirements in terms of Insurance coverage
    • Recent Evolution in Telecom Satellite financing
    • Impact of the “Asian Crisis”
    26 November 1998 Credit Lyonnais
  • 3. I – Key Features of Satellite Project Financing
    • Future cash flows will repay the debt
    • Drawing period: 2 to 3 years before launch
    • Repayment period: 5 to 10 years after launch
    • Margins
    26 November 1998 Credit Lyonnais
  • 4. Key Features – Main Security Package
    • Before completion: strong guarantee
    • After completion:
      • pledge on all assets
      • assignment of insurance proceeds
      • assignment of satellite revenues
    26 November 1998 Credit Lyonnais
  • 5. Key Features – Market risk assessment
    • Detailed market surveys are a prerequisite
    • Commitments of distributors to buy a minimum capacity
    • Sensitivities
    • No technical risk
    26 November 1998 Credit Lyonnais
  • 6. Key Features – A strong partnership
    • Sponsors
    • Distributors
    • Suppliers
    • Insurers
    • Banks
    26 November 1998 Credit Lyonnais
  • 7. Key Features – Main issues / risk sharing
    • Risk sharing
    • Advanced testing and pre-operating phase
    • Country risk
    • Regulatory issues
    26 November 1998 Credit Lyonnais
  • 8. II – Banks requirements in terms of Insurance coverage
    • Launch and initial in orbit insurance
      • Maximum duration of the early in orbit cover
    • In orbit insurance
      • Maximum cover to limit renewal risk
    26 November 1998 Credit Lyonnais
  • 9. Insurance coverage
    • Concept of continuous coverage
    • Importance of the partial failure definition for the banks
    • Coexistence of a free re-flight or similar option with standard insurance
    26 November 1998 Credit Lyonnais
  • 10. Insurance coverage – Specific Clauses
    • The Requirement for Specific Clauses
    • ” Cut-through" clause and protection against country risk and local insurance fronting
    • ” Breach of warranty” - banks have absolutely no operational interest in a space project
    26 November 1998 Credit Lyonnais
  • 11. Insurance coverage – Banks as "Loss Payees"
    • No reason to make the payment flows more complicated
    • Importance of the quality of the insurance/reinsurance companies
    • Are Salvage Rights always necessary?
    26 November 1998 Credit Lyonnais
  • 12. Insurance coverage – Important Matters
    • Importance of banks - insurers communication
    • Importance of an insurance adviser
    • Importance of insurance matters for Crédit Lyonnais
    26 November 1998 Credit Lyonnais
  • 13. III – Recent Evolution in Telecom Satellite Financing
    • Revolution in the satellite industry – new players
    • Accelerating diversification – unproven markets
    • A critical combination of risks
    26 November 1998 Credit Lyonnais
  • 14. Recent Evolution – Impact on Telecom Satellite Financing
    • In the past, the availability of financing was hardly a problem
    • Less governmental projects and large corporate, more new ventures, smaller companies
    • Dramatic increase in financing needs
    26 November 1998 Credit Lyonnais
  • 15. Recent Evolution – End of the “Education Cycle”
    • First real non recourse, project finance transactions in satellite financing …
    • Open competition among a certain number of banks around the world
    26 November 1998 Credit Lyonnais
  • 16. Recent Evolution - New features
    • Big LEOs entered “external financing” phase of development process
    • Sponsors put pressure on banks to get non recourse financing
    • Impressive success of new financing tools
      • Market / Debt instruments
      • Vendor financing
    26 November 1998 Credit Lyonnais
  • 17. Recent Evolution – How did banks react until recently?
    • Banks continue to use their traditional and “historical in-house” tools
    • Commercial Credits vs High Yield Bonds
    26 November 1998 Credit Lyonnais
  • 18. Recent Evolution – How did banks react ? (2)
    • Banks took time to observe
    • Lack of benchmark or real life experience
    • Critical look at cash flow projections
    26 November 1998 Credit Lyonnais
  • 19. Recent Evolution - Will banks adopt another attitude?
    • Customised approach
      • Banks can be constructive and innovative
      • Banks may take the bets of new global/regional services
      • Banks may think that some recourse on shareholders is still necessary
    • Supporting vendors in their commercial approach
    26 November 1998 Credit Lyonnais
  • 20. IV – Impact of the “Asian Crisis”
    • Impact of jeopardised Asian demand for telecom services?
    • Impact of redeployment of international liquidity?
    • Worldwide impact?
    26 November 1998 Credit Lyonnais
  • 21. Impact of the “Asian Crisis” (2)
    • How long will the effects of the crisis last?
    • The existence of a market remains key question
    26 November 1998 Credit Lyonnais
  • 22. Telecom Satellite Financing and Insurance - Conclusion
    • Bankers understand what the satellite based telecom industry is going through
    • More opportunities but increasing complexity
    • More sophisticated risk sharing arrangements
    • Insurance coverage must evolve
    26 November 1998 Credit Lyonnais
  • 23. Telecom Satellite Financing and Insurance - Conclusion (2)
    • Banks can be partners to the development of innovative solutions
    • Banks to accompany the industry “as soon as possible”
    • Complementarity with other finance instruments
    • Asian Crisis – Temporary loss of appetite?
    26 November 1998 Credit Lyonnais
  • 24. THANK YOU ! Pierre-Philippe Martin Credit Lyonnais [email_address] 26 November 1998 Credit Lyonnais