Ship Financing of KEXIM - Marine Money · §Export Credit Agency mandated by the Korean ... Shipbuilding Process Financial Support ... Korea Eximbankcan provide mixed credit support

Ship Financing of KEXIM ; Interaction & Flexibility

2KEXIM Maritime Financing Program

Par with Sovereign Ratings

Aa2(Stable)

AA(stable)

AA-(Stable)

KEXIM at a Glance

Specially Mandated Institution

§ Established in 1976 pursuant to the special act - The Export-Import Bank of Korea Act

§ Export Credit Agency mandated by the Korean Government to promote export competitiveness of Korean goods and services

§ The Government fully owns KEXIM’s capital directly and indirectly through other governmental arms

§ KEXIM’s Chairman & President is appointed by the President of Korea

100% owned by the Government

Total Disbursement by Industry

53%

Total Outstanding : KRW 104.4 trillion (U$ 93.4 billion)

83.5 88.2 84.1 90.1

106.2

124.7 127.5

108.2 104.4

2010 2011 2012 2013 2014 2015 2016 2017 2018


KEXIM Maritime Financing Program

ShipbuildingProcess

Financial Support for Shipping Companies Pre-Delivery & Post-Delivery Financing

Steel Cutting Keel Laying Launching DeliveryShipbuilding

Contracts Steel Cutting Keel Laying Launching Delivery After Delivery

Exposures by Vessel Types

30%

27%

17%

14%

1%11%

Foreign Ship-owners

Gas Carrier

Offshore

Container

Tanker

BulkerEtc

53%

18%

13%

11%5%

Korean Ship-owners

BulkerTanker

Container

Gas CarrierEtc

Application of OECD Arrangement

§ As Korean Government is the member of OECD, Korea Eximbank follows the Arrangement on Officially Supported Export Credits.

§ Participants to the Arrangement are defined by each participating country level. Therefore, in case if it’s export project, all public body institution’s support should be considered - including Korea Eximbank, KSURE, KDB, KOBC and so on by project basis.


Direct Loan Financial Guarantee Bond Guarantee

Applicant Borrower Borrower Issuer

Beneficiary Borrower Commercial Banks Capital Market Investors

Tenor Up to 12 years after delivery

Maximum Amount Up to 80% of the contract price

Repayment of Principal Equal instalments

Repayment of Interest No less frequently than every six months

General Terms and Conditions

Constraints due to OECD Arrangement

§ Tenor

§ Full payout equal principal repayments


Shipowner

ChartererEarningsAccount

Corporate Guarantee

Structure of Direct Loan

Shipowner

Borrower(SPC)

KoreanShipbuilder

Charterer

Lenders(KEXIM, Commercial

Banks)

EarningsAccount

Loan Agreement

Equity

Repayment Charter Contract

ShipbuildingContract

Charter Hire


Structure of KEXIM & Commercial facilities

KEXIMLoan

0 12 years

80%Max

Bilateral scheme

Commercial Bank

0 12 years

80%Max

with Commercial <same>

0 12 years6 years 15 years

80%Max

Commercial Bank

Put Option

with Commercial <bullet>

80%Max

0 12 years6 years 15 years

Commercial Bank

Put Option

with Commercial <stretch>

KEXIMLoan

KEXIMLoan

KEXIMLoan

KEXIMLoan

#1

#2#3


Shipowner


Corporate Guarantee

Structure of Financial Guarantee

Shipowner

Borrower(SPC)

KoreanShipbuilder


Equity

RepaymentCharter Contract


Charter Hire

CommercialBanks

Guarantee

KEXIM

Loan Agreement


Structure of Bank Guarantee

First applied in 2007 CMA CGM | Containership deal

Bilateral scheme

0 12 years

80%Max

KEXIMGuarantee

0 12 years

80%Max

0 12 years

80%Max

6 years

KEXIMGuarantee

First applied in 2018 CMB Financial Leasing | Containership deal

KEXIMLoan

KEXIMLoan

KEXIMLoan

#1

#2Tenor Avg. Loan

Life Ratio

Loan 12y 9.01y 51%

Guarantee 6y 3.13y 49%

Total 12y 6.13y 100%

Guarantee Paid First Scheme


Shipowner


Structure of Bond Guarantee

Issuer(SPC)

KoreanShipbuilder

Charterer

Equity

Repayment

Charter Contract


Charter Hire

Loan Agreement

Investors

CommercialBanks

KEXIM

CorporateGuarantee

Shipowner

Guarantee

Bond Proceeds

Repayment

EarningsAccount


Structure of Bond Guarantee

0 12 years

80%Max

KEXIMGuarantee

0 12 years

80%Max

KEXIMGuarantee

0 12 years

80%Max

First applied in 2013 Scorpio Tanker | Tanker deal

First applied in 2015 ICBC Financial Leasing | LNGC deal

First applied in 2014 Navig 8 | Tanker deal

KEXIMLoan

KEXIMLoan

KEXIMLoan

#1

#2(Approved)- US$825mil, 6 deals

(Issued/Converted)- US$765mil

KEXIM Shipping Bond

#3


Reciprocal Risk Participation Agreement (RRPA)

0 12 years

80%Max

First applied in 2014 Minsheng Financial Leasing | Containership deal

KEXIMLoan

Reciprocal Risk Participation AgreementRisk sharing on loan and guarantee of member institutions to third country signed among Asian Exim Banks Forum members

- Export Finance and Insurance Corporation (EFIC)- The Export-Import Bank of China- Export-Import Bank of India- Indonesia Eximbank- Japan Bank for International Cooperation (JBIC)- Export-Import Bank of Malaysia Berhad- Philippine Export-Import Credit Agency- Export-Import Bank of Thailand

(Approved)- US$295mil, KEXIM Loan 100%

(RRPA)- US$148mil, CEXIM covering 50%

Actual Project : Minsheng

CEXIMRRPA


• Approved eight investment facilities so far under the KEXIM Eco-ship Fund Program

• Drawing from pension funds, insurance companies, financial institutions and other institutional investors, Korea Eximbank provides junior financing for Korean eco-ship new building orders.

• KRW 242 billion (about US$216 mil), a quarter of which was provided by the bank (US$ 48mil) as of the end of 2018.

Investments

KEXIM Eco-ship Fund

• Approved one investment facilities so far under the Global Maritime Fund Program

• To facilitate the development of maritime infrastructure including harbors, terminals or mid-stream projects and to invigorate the utilization of maritime finance.

• US$35 mil provided by the KEXIM to invest in Busan New Port International Terminal.

Global Maritime Fund


Institutional evaluationEco friendly Goals

.

.

Eco Friendly Goals

Korean Maker

105 scrubbersfor

- [Corporate] Two Shipowners, US$140mil (‘19)

-[Ship Finance] One ShipownerUS$5mil (‘19)

Scrubber

Environment Friendly & Clean Energy

Korean Shipyard

23 LNGCs

LNG Midstream/ Dual Fuel

- Mozambique Coral FLNG (US$1,000mil, ‘18)

- Australia Ichthys FPSO, CPF (US$1,531mil, ‘13)

LNG value chain – Integration

Upstream

Downstream

for

- [Ship Finance] Five Shipowners,

US$1,722mil (‘19)

- Evaluated annually from the Government by various goals, including Eco ship and Clean Energy project supported amount.

- Bahrain Teekay, FSU (US$112mil, ‘17)

- Turkey Akbank, FSRU (US$158mil, ‘18)

- Turkey BOTAS, FSRU (US$178mil, ‘19)


Classification• Nation’s official Export Credit Agency with full Government support

Policy Mandate• Promoting international business of Korean companies• Responsible for the operation of two Government-entrusted funds

Government Control & Support

• 100% Government-owned policy bank since its establishment• International credit ratings on par with Korea’s sovereign rating• Continuous capital injection


Beyond the role of ECA

Export Credit Agency

• Export• Import• Overseas

Investment

Loans Guarantees

• Financial• Project-related

Gov’t Entrusted Fund

• EconomicDevelopmentCooperationFund

EDCF

• Inter-Korean CooperationFund

IKCF


EDPF

Purpose

• To fill the financing gap for developing countries

• To help catalyze private investments and financial flows to generate growth and deliver improved public services

• To help promote economic growth of partner countries through mobilizing additional capital for developing key economic and social sectors

Key features

• Economic Development Promotion Facility (EDPF) designed to support economic and social infrastructure projects in line with the development strategy of partner countries

• Advocating development effectiveness principles• Tenders open to competitive bidders, including Korea, partner countries, etc.

Advantages of ODA and Export Credit• Tailored for Middle-Income Countries (GNI per cap, $1,025~$12,475), with differentiated

financing terms vis-à-vis ODA loans or market-based export/investment credit

• Could provide sufficient capital for large capital-intensive development projects


Differences

EDCF EDPF Export/Investment Credit

Account GoK KEXIM KEXIM

Financial Resources GoK KEXIM KEXIM

Financial Terms Highly Concessional Less Concessional Commercial

Procurement Guidelines EDCF-standard(Tied) EDPF-standard(Untied)Non-involvement in

Procurement process(Tied)


Financing Solutions for Developing Countries

Multisource FinancingFor large infrastructure projects, Korea Eximbank can provide mixed credit support combining KEXIM financing(for main project) and ODAs(for government budget support or related infrastructure), since Korea Eximbank is an implementation agency of Korean ODA programs of EDCF(Economic Development Cooperation Fund) and EDPF(Enhanced Development Partnership Facility).

Project Company

EPC Contractor O&M Contractor Off-taker

Lenders(MDBs, Commercial Banks)

Lenders

Partner CountryGovernment Other Sponsors

Sponsors

Infra (Access Road, etc.)

Related Projects

Equity or Subsidy

EPC Contract O&M Contract Off-take Agreement

Equity

Sovereign G’tee

EDCF or EDPF

EDCF or EDPF

Debt Financing


SPC (Coal-fired Power Plant)

Coal Supplier O&M Contractor EPC Contractor

Commercial Bank

Lenders

EDCF

Korean Company Company

Sponsors

Infra (Road)

Related Projects

Equity Investment

Coal Supply Agreement

Off-takeAgreement

Financial Advisory

EDCF Loan

Debt Financing

Guarantee

O&M Contract EPC Contract

KEXIM Case

Power – Vietnamese Coal-fired Power Plant Project- Korea Eximbank provides mixed financing which combines EDCF and ECA loan.- Korea Eximbank plays a role of Financial Advisor for sponsors.

Government

Off-taker (EVN)


IFC & Other Development Finance Institution Case

Min. of Finance

PetroBangla

FSRU

Guarantee on payments

Infrastructures (U$180mil, PF scheme)

Debt (U$126mil) Equity (U$54mil)

· Delivered FSRU vessel

Tariff(15y BOOT)

<U$43mil>

<U$11mil>

<U$33mil>

FSRU (Offshore plant)

Infrastructures (Subsea buoy system etc)

Bangladesh – Moheshkhali Floating LNG Import Terminal

(Source) Excelerate, IFC, CDC website

<U$25mil>

Thank You

Documents

Ship Financing of KEXIM - Marine Money · §Export Credit Agency mandated by the Korean ... Shipbuilding Process Financial Support ... Korea Eximbankcan provide mixed credit support