Presentation for xxxxxxxxx Date STRUCTURED FINANCE – EXPORT FINANCE

Presentation for

xxxxxxxxx

Date

STRUCTURED FINANCE – EXPORT FINANCE

STRUCTURED FINANCE - EXPORT FINANCE Page 2

Agenda

1. Facts & Figures about BayernLB3

2. Export Finance at BayernLB 6

3. Export Finance Transactions 14

4. Typical Types of Financing21

5. References and Awards29

Page


Facts & Figures about BayernLB


Group Corporate Structure of BayernLB

Association of Bavarian Savings

Banks

Bayerische LandesbankLegal corporation incorporated under public law

Free State of Bavaria

AAA/Aaa¹

BayernLB Holding AG

5.97% 94.03%

100%

100%89.9% 100%

100% state guarantee

¹

¹ Standard & Poor‘s, Moody‘s

100%100%

http://www.bayernlabo.de/


Highlights 2010 – key messages

3

4

5

6

7

Investors benefit from good operating earnings

Deleveraging: Substantial reduction of risks, costs and total assets

Well capitalized – even under the new Basel III regime

Well balanced funding potential and moderate needs

2 All earnings before taxes came from core activities

1 Solid earnings before taxes of EUR 885m in 2010

BayernLB is one of the leading corporate financiers with good loan quality

BayernLB is on track with its customer oriented business model


Export Finance at BayernLB


Part of Structured Finance

Board: Jan-Christian Dreesen

Structured Finance

Alexander von Dobschütz

InfrastructureMichel Rousseau

EnergyAndy Brown

Dr. Paul Kunkel

Beate Mayer

CIS / CEE / SEE / BalticsElke Wurth-Weis

New York BranchJames King

Project Finance Export FinanceLeasing, Factoring,

Rolling Stock

EMEA, Americas, AsiaRalf Engelberg


Export Finance Department

Beate Mayer (Head of Department)

Tel.: +49 (89) 2171-23772

E-Mail: [email protected]

Volker Kuntz (Senior Specialist)

Tel.: +49 (89) 2171-23965



The Team

Herta Albert

Tel.: +49 (89) 2171-23802


Hans Grutza

Tel.: +49 (89) 2171-23514


Doris Wimmer

Tel.: +49 (89) 2171-23977


Andreas Lettow

Tel.: +49 (89) 2171-23647


Evan Sirowinski

Tel.: +49 (89) 2171-23998


Elke Wurth-Weis

Tel.: +49 (89) 2171-23774


The TeamThe Team Section „CIS / CEE / SEE / Baltics“

Richard Lawrynowicz

Tel.: +49 89 2171-23513


Harm Clasen

Tel.: +49 89 2171-26388


Export Finance


What are our Strengths?

People

• Export & Trade Finance experience for more than 30 years

• Supporting growth of our customers in their markets in the long run

• Structuring capabilities

• Large underwriting capabilities

• Placing / syndication power

• Tailor-made solutions and services

• Know how in specific regions (Europe, CIS, Asia, N&M East, Americas)

• Expertise in specific sectors (Utilities, Metals, Oil/Gas, Telecom, M&E, Aviation)

• Dedicated staff in key markets

Competence

Long-termrelationship


What are our Products?

Trade Finance

• Multi-source financing of up to 100% of project value• long tenors (often > 10 years)• Lending on basis of corporate risk• Credit enhancement by ECA and/or PRI and/or off-take structures

Structured

Export Finance

• Documentary business• Short term trade finance (e.g. advances, post-shipment finance)• Forfaiting

• Hedging instruments for FX, interest and commodities• Emission Certificates (Joint Implementation Certificates,

Clean Development Mechanism)• Emission trading• Consulting and advisory services

Cross-sellingproducts


Who are our Partners?

Trade Finance

• Exporters

• Importers

• Export Credit Agencies (ECAs)

• Private Risk Insurance Companies

• Commercial Banks

• Multinational Finance Institutions (MFIs)

• Exporters

• Trading Companies

• Commercial Banks

• Off-takers

• Private Insurance Companies

StructuredExport Finance


Our Main Partner Banks in Russia

Advantages:

• Efficient Work Flow

• Close Cooperation

• International Documentation Standards

• Track Record

Existing Basic Agreements for ECA covered Buyer‘s Credits


Export Finance Transactions


Risks and Time Flow

AcquisitionAcquisition Purchase / Production

Purchase / Production Delivery/iesDelivery/ies

Term of PaymentTerm of Payment

t0 tnt1 t2

Supplier‘s Credit

Buyer‘s CreditDisbursement Period Repayment Period

Forfaiting

Assembly / Acceptance

Assembly / Acceptance WarrantyWarranty

Conclusion of Contract

Average Delivery Date

Readiness for Operation

Political Risk: war / riot / confiscation ban on imports / embargo risk of conversion and transfer of currency interdiction of payment / moratorium

Commercial Risk: insolvency non-payment („protracted

default“)


Good operating business – BayernLB „back on track“

Payment Conditions in Export Contracts

• currency (EUR / USD / CHF)

• handling of payments / payment instrument (e.g. L/C)

• payment conditions according to OECD consensus

• place of payment

• type of payment collateral (e.g. guarantees)

• allocation of costs for handling of payments

• allocation of costs for payment collateral

• allocation of costs for financing

• payment of the ECA premium


Governmental Support for Exports:OECD Consensus

„Gentlemen‘s Agreement“ of the OECD countries about rules of governmental support of exports

Target: avoid distortion of competition

Valid for all state-aided export finance transactions with a credit period of more than 2 years

• (National) Export Credit Insurance (ECA)

• Direct credits or refinancing schemes

• Subsidies for interest payments

• Insurance against unlawful claim of guarantee

Instruments


OECD Consensus (cont’d)

min. 15 % of the contract value Down / Interim payments

85% of the contract value covered by ECA

10 years maximum tenor (for category II countries)

Repayment in equal, semi-annual instalments, the first

to be due 6 months after „Starting Point“

e.g. last essential delivery, mean weighted delivery,

readiness for operation


Euler Hermes Kreditversicherungs AG, Hamburg

German „Export Credit Agency“ (ECA)

manages the official export credit guarantee scheme on behalf and for account of the Federal Government, such scheme granting coverage of political and

commercial risks resulting from receivables and loans agreed in foreign contracts.

Vital preconditions for granting cover:

• Eligibility of goods (deliveries / services must substantially be of German origin (foreign content max. 30 - 49 %))

• Fungibility of risks / no public budget constraints

• Application for cover needs to be filed before conclusion of contract

• OECD conform payment conditions


Multi Source / ECA Desk

Multi Source / ECA Desk

Bayern LB is Partner for Public Export Credit Agencies (ECAs)


Typical Types of Financing


ECA-covered Buyer’s Credit• Definition: the principal bank of a foreign contractual partner

of the exporter („buyer“) or the buyer is granted a loan whereas the borrowed funds are

disbursed directly to the exporter for payment of the purchase price

• Loan Amount: 85% of the contract value plus100% of the ECA premium pluspart of local costs if eligible for ECA cover

• Additional uncovered financing possibilies: possible financing of the down/interim payments qualified financing of remaining local costs


ECA-covered Buyer’s Credit (cont’d)

Additional Collateral required by the ECA:

• Exporter‘s undertaking

• Financial statements according to IRFS in case the buyer is acting as borrower

• Guarantees (as the case may be)

• Pledge of assets (as the case may be)


ExporterExporter Importer (Buyer)Importer (Buyer)

ECA(Export Credit Agency)


Domestic Bank

(“Borrower”)

Domestic Bank

(“Borrower”) Buyers Credit

Export Contract

ECA Cover **

15% Cash Down and / or Interim Payment *

Repayment

Disbursement of 85% through L/C pro rata deliveries / services

* potential uncovered financing of down payment / interim payments

** potential ECA premium financing

L/C advisingL/C advising

Opening of L/C

Bayern LBBayern LB

Loan Agreement

Scheme:Buyer‘s Credit (bank)


ExporterExporter Importer (Buyer)“Borrower”

Importer (Buyer)“Borrower”



Domestic Bank

Domestic Bank

Loan Agreement / Buyer's Credit (“tied export credit”)

Export Contract

ECA Cover ** Guarantee support

(optional)

15% Cash Down and / or Interim Payment *

Repayment Disbursement

of 85% through L/C pro rata deliveries / services

* potential uncovered financing of down payment / interim payments

** potential ECA premium financing

L/C advisingL/C advising

Opening of L/C

Bayern LBBayern LB

Scheme:Buyer‘s Credit (corporate)


Supplier’s Credit Forfaiting • Supplier‘s Credit:

The supplier is granting a loan to the foreign buyer by by way of concession of a grace period for payment. This period may be refinanced via forfaiting.

• Forfaiting: Purchase without recourse of abstractly documented receivables, e.g.

receivables from bills of exchange

deferred payment letters of credit

book claims

The bank takes over the commercial and political payment risk


Forfaiting (cont’d)

Requirements for Forfaitability:

• Additional collateral as might be required by the ECA or the bank

• Export contract has to allow assignment of claims

• Export contract has to foresee yearly presentation of financial statements according to IFRS

• Purchased claims have to be free of objections and/or counterclaims under the export contract


For

faiti

ng A

gree

men

t

1a. Export Contract

2. Term of Payment

1b. ECA cover

Rem

ittan

ce o

f In

tere

st a

nd

Rep

aym

ent

Am

oun

ts5. Interest and Repayment

À-f

orfa

it P

urch

ase

and

Dis

bur

sem

ent

German ExporterGerman Exporter Buyer / Payment Obligor

Buyer / Payment Obligor


ECA(Export Credit Agency)BayernLBBayernLB

3a.

Assignment of Claims from- the Export Contract- the Exporter‘s ECA cover- L/C or Payment Guarantee

4. 6.

3b.

Scheme:Forfaiting


References and Awards


Deal Highlights

EUR 115,500,000

Export Finance Facility

OAO Kabbalkgips

Mandated Lead Arranger (Russia)

2010

Mandated Lead Arranger (Turkey)

EUR 149,351,984

Euler Hermes covered Export Finance

Facility

2010

Lead Arranger

EUR 26,205,806Wind Energy

Converters Turkey Export Credit FacilityEuler-Hermes Cover

2010

EUR 1,878,700,000

6 submarines Type 214 Hermes covered

Export Finance Facility

Undersecretariat of Treasury

Mandated Lead Arranger

2010


EUR 1,500,000,000

Syndicated Pre Export Finance

2010


EUR 325,000,000 for SIF

Revolving Collateralised Loan

Facility

2010

Participating Lender(Hungary)

USD 475,000,000

Issuance of Import LOCs

2010

€ 3,900,000,000

Gas PipelineBaltic Sea RegionMandated Lead

Arranger

2010

http://www.polatenerji.com/polat.php

http://www.nord-stream.com/de

http://www.pfiawards.com/default.asp


Deal Highlights (cont’d)

EUR 255,000,000

EBRD A/B-Loan Facility

First project under new Sustainable Energy

Action PlanMandated Lead Arranger

(Kazakhstan)

2008

USD 80,500,000

Road InfrastructureExport Finance

FacilityCo-Arranger (Azerbaijan)

Azeryolservis OJSC

2008

Indramayu Power Project

USD 592,224,258

Export Credit FacilitySinosure Cover

Senior Lead Arranger (Indonesia)

2008

Jamshedpur Expansion Project

EUR 264,000,000

Export Credit FacilityEuler-Hermes Cover


(India)

2009

EUR 69,892,500

Wind turbine generators

EulerHermes coveredExport Finance Facility

Lead Arranger(Turkey)

2009

EUR 262,350,000Fantanele Windfarm

347.5 MW

Euler Hermes coveredExport Finance Facility

Tomis Team / M.W. Team

Invest

Agent & MLA

2009

Vyksa Steel Works

EUR 346,920,200

Euler Hermes covered Export Finance Facility


2009

EUR 524,000,000

Multi-Source Master Export Finance

FacilityMandated Lead Arranger (Russia)

2009

http://images.google.com/imgres?imgurl=http://www.rezeptewiki.org/images/thumb/a/ac/FlagRomania.svg/800px-FlagRomania.svg.png&imgrefurl=http://www.rezeptewiki.org/wiki/Datei:FlagRomania.svg&usg=__XSbmD8lqxL3XLnefzCxGT_UiRFA=&h=533&w=800&sz=5&hl=de&start=17&tbnid=7wT_VcoaA9vYkM:&tbnh=95&tbnw=143&prev=/images%3Fq%3Dromania%2Bflagge%26gbv%3D1%26hl%3Dde



Participating Lender(Russia)

USD 50,000,000

Refinancing of the Leasing Portfolio

2007

USD 47,500,000

Euler Hermes Covered Export Finance

Facility

Sole Lender (Kazakhstan)

LLP KaR-Tel

2008


USD 300,000,000

EBRD A/B-Loan FacilityEnvironmental Loan

2007

EUR 218,000,000

Export Credit Facility

Finnvera-covered


2007

CHF 45,000,000

Refinancing of the Leasing Portfolio

Participating Lender (Russia)

2008

EUR 60,000,000

Euler Hermes Covered Export Finance

Facilities

Sole Lender (Russia)

2008


EUR 278,800,000

Euler Hermes covered Export Finance

Facility

2008

Arranger (Russia)

EUR 600,000,000

EBRD A/B-Loan FacilityEnergy Efficiency Loan

2008



EUR 300,000,000

Power ProjectExport Finance Facility

„AzerEnerji“ JSC


(Azerbaijan)

2005

USD 307,237,810Commercial Loan

+USD 174,606,198

Export FinanceEuler-Hermes Cover

Participant (Turkey)

2007

EUR 613,000,000

Ermenek Dam and HEPP OeKB covered

Export Finance Facility plus Commercial Loans

Lead Arranger

Undersecretariat of Treasury

2002

EUR 185,000,000 HERMES-covered

EUR 74,500,000 SACE-covered

USD 238,000,000Finnvera-covered


2005


International Awards (since 2009)

Trade Finance Deal of the Year Awards 2009

Russia - NLMK - ECA-backed financing

Russia - Vyksa - ECA-backed financing

Trade & Forfaiting Review - Deal of the Year Awards 2009

Russia - NLMK – ECA-backed financing


Awards Project Finance since 2009 Category: Deal of the Year

R1 – Europe Infrastructure Deal of the Year

M25 – Europe PPP Deal of the Year

Dolphin –Middle East Oil & Gas Deal of the Year

Shuweihat –Gulf Power Deal of the Year

Nord Stream – Gas Deal of the Year

Centrica/TCW Windfarm Portfolio – Portfolio Deal of the Year

GSM-Rail – Europe Telecoms Deal of the Year

Castor – Europe Oil & Gas Deal of the Year

Barka III & Sohar II – Middle East Power Deal of the Year

GTRBest Deals of

2009

http://www.pfiawards.com/default.asp

Documents

Presentation for xxxxxxxxx Date STRUCTURED FINANCE – EXPORT FINANCE