Trade Finance Department Warsaw, 2016
With BGK the future starts today BGK s mission is supporting social and economic growth of Poland and the public finance sector in the performance of its tasks 2
We support higher-risk markets disregarded by the majority of commercial banks (Africa, Russia, Belarus, Kazakhstan, the Balkans, and many others), Our pricing results from the strategy of exports support and reflects the actual cost of capital and accepting the risk, We were entrusted with carrying out Government Programme of Financial for Exports. 3
Foreign trade companies seeking for: Mitigation of transaction risks by accepting by BGK the insolvency risk of a contracting party, Improvement of liquidity as a result of receiving payment at sight for the sold goods, Financial support for a buyer, for their foreign expansion projects. 4
Trade finance and foreign expansion products Buyer s bank credit L/C postfinancing Buyer s credit L/C discounting Purchase of receivables L/C confirmation Foreign Expansion Fund Guarantees 5
Financing based on documentary letter of credit Main characteristics financing consumption and investment exports, mitigates transaction risk, ensures liquidity Type indirect financing (based on financial standing of Importer s bank) Maximum repayment period 2 years Available structures discounting confirming postfinancing Countries majority of countries Currency PLN EUR USD 6
Costs of financing based on documentary letter of credit Example Tenor of financing: 360 days Annual cost of credit and insurance* (%) Russia, Tunisia Belarus, Pakistan Kazakhstan, Azerbaijan, Nigeria Serbia, Georgia, Uzbekistan, Mongolia EUR USD EUR USD EUR USD EUR USD 1.06 2.22 1.68 2.97 1.26 2.47 1.44 2.66 rate for buyer = rate for buyer s bank + buyer s bank margin Exporter bears costs according to BGK fee schedule, while importer according to the issuing bank s fee schedule. *Calculation as of 05.01.2016 7
Buyer s bank credit Type of credit indirect financing based on financial standing of Importer s bank Minimum repayment period 2 years Amount of credit up to 85% of contract value, min. EUR 1 m Countries majority of countries Cost of credit incurred by Importer Purpose financing exports of investment goods and services Currency PLN EUR USD
Costs of financing based on buyer s bank credit Example Repayment period: 5 years Disbursement period: 1 year Russia, Tunisia Belarus, Pakistan Kazakhstan, Azerbaijan, Nigeria Serbia, Georgia, Uzbekistan, Mongolia Fixed rate - CIRR (%) p.a. Administration commission (paid annually) (%) Minimum KUKE insurance premium for five-year period (paid in lump sum) (%)* EUR USD EUR USD EUR USD EUR USD 0.69 2.20 0.69 2.20 0.69 2.20 0.69 2.20 0.7 0.7 0.7 0.7 3.55 8.79 5.17 6.72 rate for buyer = rate for buyer s bank + buyer s bank margin CIRR valid from 15.12.2015 r. till 14.01.2016 r. *Rate for debtors whose rating is equal to state rating 9
Purchase of receivables Type of credit financing based on: Importer s balance sheet no recourse, Exporter balance sheet recource to the Exporter Amount of credit min. EUR 2 m Period of financing up to 5 years Currency PLN EUR USD Countries majority of countries Pricing conditions determined individually based on transaction risk profile 10
Buyer s credit Purpose Type of credit Amount of credit financing export contracts concluded between a Exporter and Importer financing based on Importer s balance sheet project finance min. EUR 10 m Period of financing Currency up to 15 years (including 3 years of availability period) PLN EUR USD Pricing conditions agreed individually according to risk profile of the transaction Securities project assets, insurance of the ECA (KUKE S.A.) / other ECA 11
Foreign Expansion Fund (FEZ) FEZ along with Partners co-finances their foreign subsidiaries implementing foreign expansion projects. FEZ provides long term financing in the form of capital and loans granted on market conditions. Co-financing: up to the amount of Partner s investment no minimum amount usually up to EUR 12.5 m per one project for the period of 5-7 years 12
Foreign Expansion Fund (FEZ) Capital instruments: shares with a possibility of future repurchase by the Partner under beforehand known conditions shares convertible to loans with repayment transfer from the Partner to a foreign Project Vehicle Debt instruments: loans secured only with foreign project s assets, without recourse to the Partner subordinated, convertible, not secured loans (mezzanine) 13
Examples of supported contracts Belarus Mexico Kazakhstan Russia Hotel construction Mining equipment Mining equipment Office building modernization EUR 44.0 m EUR 15.0 m EUR 8.0 EUR 10.0 m Belarus Great Britain Ukraine Russia Mineral wax plant EUR 48.2 m Company acquisition EUR 55.6 m Vacuum furnaces EUR 2.2 m Mining equipment EUR 18.7 m China Serbia Canada Netherlands Investment in production plants Construction machines Parcel lockers network Ship construction EUR 10.0 m EUR 1.5 m USD 37.6 m EUR 16.0 m 14
Bank Gospodarstwa Krajowego The State of Poland Trade Finance Department Al. Jerozolimskie 7, 00-955 Warsaw Tel: +48 22 522 92 75 e-mail: dfhz@bgk.pl Trade Finance Sales Team Karol Jakubaszek Tel: +48 22 599 83 07 e-mail: Karol.Jakubaszek@bgk.pl Karol Rozenberg Tel: +48 22 522 93 76 e-mail: Karol.Rozenberg@bgk.pl Elżbieta Bugalska Tel: +48 22 599 83 17 e-mail: Elzbieta.Bugalska@bgk.pl Joanna Mularczyk Tel: +48 22 596 58 05 e-mail: Joanna.Mularczyk@bgk.pl