Marcio Migon - AIRFINANCING WORKSHOP - PANEL 2: Resources for the sector: access to the capital and financings

1. AIRFINANCING WORKSHOP
AFTERNOON SESSION – MARCH, 30th
PANEL 2: Resources for the sector: access to the
capital and financings
PAINEL 2: Recursos para o setor: Acesso ao capital e
financiamentos

2. BNDES
Export Credit and Guarantor Funds Division
(AEX)
April, 2017
Marcio Migon
Classification: Open Information
Management Unit: AEX

3. Founded on June, 20th, 1952.
100% state-owned company under private law.
Key instrument for implementation of Federal Government’s
industrial and infrastructure policies.
Main provider of long-term financing in Brazil.
Emphasis on financing investment projects.
Support to micro, small and medium-sized companies
is a BNDES´ strategic priority at the moment.
BNDES Highlights

4. Infrastructure
Heavy Industry – Consumer Goods
Technological Development
Time Line
Energy
Agribusiness
Exports
Urban and Social Development
Social Inclusion
Small Business
Sustainability
Innovation
50’s 60’s 70’s 80’s 90’s 00’s Today
Imports
Substitution
Privatization
Program
10’s
Privatization
Program

5. Total Assets
In R$ billion
187 203
277
387
549
625
715
782
877
931
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

6. Annual Disbursements
65
91
136
168
139
156
190 188
136
62
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q
In R$ billion
Data for the first three quarters of 2016.

7. Disbursements for Export Finance
Converted to US dollar on the disbursement dates.
In US$ billion
3,2
4,5
3,5
4,9
1,7
0,9
1,7
0,4
0,9
0,2 0,3
2,6
4,5
8,0
2,3
2,9
3,7
2,2
0,3
1,6
1,0 0,5
0,4
0,4
0,2
0,3
0,7
1,0
0,9
1,4
1,1
0,8
0,7
1,2
1,7
2,0
2,5
1,9
1,8
1,0
0,6
0,1
5,9 6,3
4,2
6,6
8,3
11,3
6,7
5,5
7,1
4,4
2,1
4,1
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total
Post-shipment BNDES
Post-shipment Finame
PSI
Pre-shipment

8. 8Fontes: Embraer e BNDES
Data base: dezembro/2016
1.072 aeronaves financiadas, US$ 20,3 bi desembolsados
Embraer 120, 135, 140 e 145
646 aeronaves Embraer 170, 175, 190, 195
426 aeronaves
14
34 40
94
80
129
70 71
51
18
13
33
23
20 17 9 4 7
21
42 43
61
1
11
3 15 38
32
14
17
1
1
10
8
2
6
6
7
6
14
44
48
94
80
129
70
84 85
52
0
23
34
53
36
27
45
49
43
62
204
606
665
1414
1154
1910
1354
1619
1755
1224
0
483
692
1221
988
584
995 1005 985
1463
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
20
40
60
80
100
120
140
160
180
200
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Família 145 (601) Família 170 (293) Família 190 (133) Outros - defesa, executiva e E120 (45) Desembolsos anuais
Aeronaves
(unidades)
Desembolsos
(US$ milhares)
Liquidez
‘exuberante’
Crise 2008
Disbursements for Aircraft Export Finance

9. IDB - Inter-American Development Bank
IBRD - The International Bank for Reconstruction and Development (World Bank)
CAF - Corporación Andina de Fomento
CDB - China Development Bank
(*) Converted by the quote currency against the US dollar 31/12/2015
(**) Unlike other institutions, 12-month fiscal year ends June 30th
Capitalization - Shareholders' Equity / Total Assets
ROA - Return On average Assets
ROE - Return On average Equity
US$ million BNDES* IDB IBRD** CAF China DB*
Dec 31st, 2015 Dec 31st, 2015 Jun 30th, 2015 Dec 31st, 2015 Dec 31st, 2015
Total Assets 236,019 111,139 343,225 32,470 159,058
Shareholders' Equity 7,845 25,253 38,639 9,524 157,576
Net Income 1,542 960 686 77 14,045
Capitalization 3.33% 22.72% 11.26% 29.33% 99.07%
ROA (%) 0.67% 0.86% 0.20% 0.24% 8.83%
ROE (%) 15.37% 3.80% 1.78% 0.81% 8.91%
Established 1952 1959 1945 1968 1994
BNDES vis-à-vis Multilateral Banks

10. BNDES Funding
Domestic Funding
§ FAT – Workers’ Assistance Fund (Constitutional)
§ PIS-PASEP Fund
§ FI-FGTS
§ BNDESPAR Bonds
§ National Treasury
Foreign Funding
§ Government Agencies and Multilateral Institutions
§ Market Funding
§ Bonds, Loans, Structured Notes (ABS)

11. Who can apply for BNDES´ Financing?
Legal Entities
established
in Brazil
Brazilian
Private
Individuals
• Companies: agro-business, industry,
trade and services etc.
• Cooperatives or associations
• NGOs, OSCIPs or Foundations
• Rural producer
• Truckers
• Micro-entrepeneur
• Municipalities
• States
• Federal
Brazilian
Public
Management

12. Export Credit and
Guarantor Funds Division
(AEX)

13. Competitive export
§ to improve competitiveness of Brazilian products
§ Emphasis on products with higher-aggregated value
Credit facilities
§ lines of financing designed to facilitate exports
Support for small and medium-sized export companies
§ to increase the number of Brazilian exporters
Indirect operations aimed to small business
§ operating in partnership with a network of accredited financial
institutions in Brazil and over 100 foreign banks
Goals

14. Financing for the production of
goods earmarked for export,
linked to specific shipments, or
to the increase of the
company’s total exports
Buyer or Supplier Credit: financing
for the commercialization of goods
and services in foreign countries
BNDES Exim
Pre-shipment
Production in Brazil
Post-shipment
Foreign Trading
Export Support - Credit Lines

15. Aircraft
Oil & Gas
Vehicles
Machinery and Equipment
15
Examples
Industry
Hydroelectric Power

16. 16
Banks
Lessors
Capital Markets
ECAs
Main Sources of Airfinance

17. 17
25% 21% 28% 31% 28% 27%
5% 11%
14%
28% 34% 36%
22% 25%
24%
24% 23% 24%
33%
34%
26%
15% 13% 11%13% 7% 5%
2% 2% 3% 2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016F
bank debt capital markets cash
export credit lessors (self-fund) tax equity
A participação das ECAs oscila, historicamente, em torno de 20% do total
anual do mercado de finaciamento de jatos comerciais novos...
ECAs:
Main Sources of Airfinance

18. Post-shipment by Export Destinations
Africa
Europe and Asia
North America
South and Central America
In US$ billion
Converted to US dollar on the disbursement dates.

19. COFIG
Ministries:
. Industry, Foreign Trade and Services;
. Planning, Development and Public
Management;
. Finance (SAIN and STN);
. Foreign Affairs;
. Chief of Staff; and
. Agriculture.
Financing
Council of Ministers
19
CAMEX
Operacional Committee
PROEX
Export Credit
Insurance
Institutional Arrangement

20. What we are doing....
o Aircraft (D1)
• Support Embraer on its transition for new generation of
commercial aircraft “E2” and the launch of its multipurpose
aircraft KC390
• On-lending transactions (e.g., China Exim)
• Securitization of liquid assets
o Services (D2)
• Execution of new compliance terms
• Disbursement resumption
• New project analysis
o Goods (D3)
• BNDES as its own “Agent Bank” (goal: over 100 new
transactions in 2017)
• Exim Automático – network of accredited financial institutions

21. BNDES Challenges and future
o Domestic market
• New operational policies
• Convergence TJLP-Selic interest rates
• Focus on long term financing solutions
• Local content requirements
• Other sources of funding
o Foreign market
• BNDES Guarantee for short term transactions and foreign
investments in Brazil
• Further BNDES underwriting risk on its balance sheet
• Loan “4131” / FX and interest rate hedge solutions
• On-lending transactions
• Other sources of funding / Securitization

22. 22
Thank you!
Brazilian Development Bank - BNDES
Export Credit and Guarantor Funds Division (AEX)
www.bndes.gov.br/english