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
3KEXIM Maritime Financing Program
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.
4KEXIM Maritime Financing Program
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
5KEXIM Maritime Financing Program
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
6KEXIM Maritime Financing Program
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
7KEXIM Maritime Financing Program
Shipowner
ChartererEarningsAccount
Corporate Guarantee
Structure of Financial Guarantee
Shipowner
Borrower(SPC)
KoreanShipbuilder
ChartererEarningsAccount
Equity
RepaymentCharter Contract
ShipbuildingContract
Charter Hire
CommercialBanks
Guarantee
KEXIM
Loan Agreement
8KEXIM Maritime Financing Program
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
9KEXIM Maritime Financing Program
Shipowner
ChartererEarningsAccount
Structure of Bond Guarantee
Issuer(SPC)
KoreanShipbuilder
Charterer
Equity
Repayment
Charter Contract
ShipbuildingContract
Charter Hire
Loan Agreement
Investors
CommercialBanks
KEXIM
CorporateGuarantee
Shipowner
Guarantee
Bond Proceeds
Repayment
EarningsAccount
10KEXIM Maritime Financing Program
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
11KEXIM Maritime Financing Program
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
12KEXIM Maritime Financing Program
• 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
13KEXIM Maritime Financing Program
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)
14KEXIM Maritime Financing Program
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
ChartererEarningsAccount
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
15KEXIM Maritime Financing Program
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
16KEXIM Maritime Financing Program
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)
17KEXIM Maritime Financing Program
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
18KEXIM Maritime Financing Program
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)
19KEXIM Maritime Financing Program
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