Financing Norwegian technology exports

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Mariah Thornton
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1 Financing Norwegian technology exports February 2013 Jarle Roth CEO Laila Johnsen, SVP Lending Oil & Gas

2 Export Credit Norway in brief Offers competitive financing to companies buying Norwegian capital goods and services Stable, long-term source of financing Funding from the Norwegian government Manages the whole lending process, including guidance to export credit financing, loan application processing, documentation, disbursement and loan administration

Norwegian government Manages the whole lending process, including guidance to export

3 Historic perspective: Norwegian export credit financing - Supporting the Norwegian Export industry for decades Eksportfinans ASA has provided governmentsupported loans on behalf of the Ministry of Trade & Industry to the Norwegian export sector from 1978 to 2011 On Nov 18, the government announced that it would assume responsibility from Eksportfinans for the offering of governmentsupported loans. A new state-owned entity will be set up for this purpose. Export Credit Norway fully operational as of July 2012 providing longterm financing with funding from the Norwegian government. 29 experienced employees recruited from Eksportfinans Export-related loans ( ) BNOK Solid history of growth

governmentsupported loans. A new state-owned entity will be set up for this purpose.

4 Norwegian ECA financing: What s new? Legal set-up Old model: Eksportfinans ASA Limited liability company, financial institution New model: Export Credit Norway Limited liability company, created by special law Ownership 85 % banks, 15% government 100 % government Funding Capital market Bank of Norway (government) Lender of record / Loan book Loan products Eksportfinans ASA Export credits, Corporate/ bank finance Export Credit Norway Export credits Unchanged: Credit risk GIEK / Acceptable banks GIEK / Acceptable banks Pricing policy Commercial Commercial

liability company, created by special law Ownership 85 % banks, 15% government 100 % government Funding Capital market Bank of Norway

5 Increasing demand: High levels of investment Source: INTSOK / Rystad Energy

6 The Norwegian cluster is well positioned

7 Increased activity in the bond-market substitutes bank loans Bank loans: limited capacity due to Regulatory changes (capital, funding, liquidity) 25% 75% 25% 75% Banks Capital market

8 Export Credit Agency (ECA) guaranteed activity trended upwards Global ECA Backed Loan Volume: *Volume rising 9% year-on-year to $75.7 billion in 2012 from $69.2 billion reported in Source: dealogic

9 Lending portfolio Offshore related activities account for the majority of the lending volume Semi submersible 16 % FPSO 3 % 28 % PSV 4,7 billion USD The porfolio includes financing of: 31 PSV Plattform Supply Vessel 32 % 9 % AHTS 9 AHTS - Anchor handling tug supply vessel 5 Construction vessels Drillships 2 % 10 % Other offshore-related vessels Construction vessels 4 Other offshore-related vessels 12 Drillships / equipment 5 Semi submersible 1 FPSO - Floating production storage and offloading

handling tug supply vessel 5 Construction vessels Drillships 2 % 10 % Other offshore-related vessels Construction vessels 4

10 Export Credit Norway holds a loan portfolio of MUSD as of Dec 31, 2012 Industry Balance MUSD Maritime sector ships Maritime sector equipment 50 Oil & gas Renewable energy and environment 21 Industry 2 Total Number of applications an indication of activity level: Industry Number of applications Maritime sector ships 53 Maritime sector equipment 88 Oil & gas 91 Renewable energy and environment 72 Industry 23 Total, year-end By year end 2013, total lending is estimated to US$ 10 billion Strategic focus ( ): Competitive, accessible and efficient export financing, with increased focus on: -Small and medium-sized enterprises -New knowledge and technology

Maritime sector equipment 88 Oil & gas 91 Renewable energy and environment 72 Industry 23 Total, year-end 2012 327 By year end 2013, total lending is estimated to US$ 10

11 In close co-operation with guarantors All loans from Export Credit Norway must be secured by guarantee(s) from The Norwegian Guarantee Institute for Export Credits (GIEK) and/or acceptable bank(s) International banks 14 % 76 % GIEK Norwegian banks 10 % 5,1 billion USD Guarantors, total lending portfolio, year-end 2012

Credits (GIEK) and/or acceptable bank(s) International banks 14 % 76 % GIEK

12 Financing structure: Country of origin: Min. 30% Norwegian content Max. 30% local content (buyer s country) Financing terms: Max. 80% financing of ships, 12 years tenor Max. 85% financing of other capital goods, 8,5 years tenor (18 year renewable energy) Equal, semi-annual instalments GIEK guarantee cover is normally 60 90% of the loan Financing according to the OECD arrangement of Export Credit Send the loan application prior to signing the commercial contract

85% financing of other capital goods, 8,5 years tenor (18 year renewable energy) Equal, semi-annual instalments GIEK

13 Projects

14 Case: Fred. Olsen Energy s new drillship loaded with Norwegian technology Drillship Bolette Dolphin beeing built at Hyundai Heavy Industries shipyard in South Korea The ship will be delivered in 2013, going into a five year contract with Anadarko Petroleum Corporation Several Norwegian exporters have supplied technology worth of USD 200 mill. Norwegian exporters: NOV, ABB, Kongsberg Maritime, Norsafe, Hernis, Sperre, Tamrotor and Rolls Royce USD 165 mill market loan, guaranteed by GIEK, being part of a USD 1,5 bn five year facility with 12 banks

in South Korea The ship will be delivered in 2013, going into a five year contract with Anadarko Petroleum Corporation Several Norwegian

15 Case: Polarcus Adira, built at Ulstein Verft Polarcus is a seismic company listed at Oslo Stock Exchange. The fleet consisting of seven ships with exploration jobs all over the world Polarcus and Ulstein Verft contacted Export Credit Norway before contract award, and the loan was approved USD 114 million CIRR-loan with repayment period of 12 years 75 % GIEK coverage and 12.5% coverage each from DNB and DVB Bank

The fleet consisting of seven ships with exploration jobs all over the world Polarcus and Ulstein Verft

16 Case: Flood protection from Tønsberg Flood Proection System delivered by the Tønsberg-based company Aquafence Protects large areas from massive amounts of water Mobile containers with several meters of flood defence walls that easily can route water The technology replaces traditional flood protection such as sandbags American Aqua Ready bought six containers of flood protection which was delivered during summer 2012 The contract value is $ 1.45 million. Export Credit Norway has given a loan of the same amount, with a 8.5 year maturity Guaranteed by GIEK (90 %) and Nordea (10 %)

flood protection such as sandbags American Aqua Ready bought six containers of flood protection which was delivered during summer 2012 The

17 Case: Harsh weather satellite from Vestfold Robust satellite antenna that ensures broadband on ships operating in harsh weather. The technology is developed by the Norwegian company Jotron The technology has been tested in the North Sea, and is now going international Globe Wireless LLC, a US company specializing in IT and communication at sea, has signed a distribution agreement with Jotron NOK 2.55 million loan from Export Credit Norway to Globe Wireless, with a five year maturity Guaranteed by GIEK (90 %) and DNB (10 %)

international Globe Wireless LLC, a US company specializing in IT and communication at sea, has signed a distribution agreement

18 Competitive financing from Norway: Attractive pricing Access to long-term financing in all market conditions Flexibility within the framework A highly specialised and competent organisation High capacity for more projects moving forward

Flexibility within the framework A highly specialised and

19 Jarle Roth CEO (+47) Laila Johnsen SVP Lending Oil & Gas (+47) Please contact us Export Credit Norway AS Hieronymus Heyerdahls gate 1, entrance from Otto Sverdrups gate P.O. Box 1315 Vika, 0112 Oslo, Norway. Tel: (+47)

no Please contact us Export Credit Norway AS Hieronymus Heyerdahls gate 1,

20 Appendix Please contact us Export Credit Norway AS Hieronymus Heyerdahls gate 1, entrance from Otto Sverdrups gate P.O. Box 1315 Vika, 0112 Oslo, Norway. Tel: (+47)

Otto Sverdrups gate P.O. Box 1315 Vika, 0112 Oslo, Norway.

21 CIRR rates currently at historically low levels 7,00 6,00 5,00 4,00 3,00 CIRR development (8.5 year tenor) Contract CIRR RATES < 5 y y 9-12 y USD EUR NOK ,00 1,00 0, Send the loan application prior to signing of the commercial contract!

COMPETITIVE LONG TERM FINANCING FROM NORWAY

COMPETITIVE LONG TERM FINANCING FROM NORWAY Our Mission: «Competitive financial solutions to buyers of Norwegian Capital Goods and Services, thus contributing to making Norwegian exporters win contracts»