F Classification: Public AGENDA Introductions Scheme Comparisons - - PowerPoint PPT Presentation
Classification: Public F Classification: Public AGENDA Introductions Scheme Comparisons Coronavirus Business Interruption Loan Scheme (CBILS) Coronavirus Large Business Interruption Loan Scheme (CLBILS) Covid
Classification: Public
F
Classification: Public
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Classification: Public
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James Galea Head of Complex Lending Products Commercialisation, Client Asset Management, Lloyds Bank Commercial Banking Richard Brown Head of Lending Product Management, Client Asset Management, Lloyds Bank Commercial Banking Olivier Khalife Senior Adviser Export Finance, Global Transaction Banking, Lloyds Bank Commercial Banking Glenn Forbes Managing Director, Corporate Debt Capital Markets, Lloyds Bank Commercial Banking Craig Leighton Director, Trade and Commodity Finance, Global Transaction Banking
Classification: Public
CBILS CLBILS CCFF
Description Government-backed guarantee scheme to support viable customers that have been impacted by Coronavirus Government-backed guarantee scheme to support viable customers that have been impacted by Coronavirus Provision of funding to businesses through purchasing of CP Availability from 23/3/20 to 30/09/20 (6 months) 20/04/20 to 20/10/20 or as extended 23/03/20 to 23/03/21 Turnover/ Credit Qualification < GBP45m Turnover
(EUR 50m Equivalent)
> GBP 45m Turnover IG (rated or implied) Corporates and make “meaningful contribution to UK economy”; CP issuer (new or existing) Max 20% refinance (portfolio) Max 20% refinance (portfolio) Viability No Change + a) The finance will hep the SME trade out in short to medium term b) The SME is not subject to collective insolvency c) If the facility is granted the SME will not become insolvent in the short to medium term EU ‘in difficulty’ tests, plus viable pre- and post-Covid-19 impact assessed by LBG
Short-term rating A3 / P3 / F3 / R3
BBB-/ Baa3 / BBB- / BBB low or
Banks’ internal rating as at 1st March 2020
Loan Amount & T enor Up to £5m 3 months – 6 years £50m >£250m turnover £25m <£250m turnover Further limited by EU/HMG tests 3 months to 3 years bullet/ amortisation subject to normal commercial principles A1/P1/F1/R1 Up to £1bn A2/P2/F2/R2 Up to £600m A3/P3/F3/R3 Up to £300m Product Term Lending Invoice, Asset and working capital finance also possible if developed by LBG Term Loan & Revolving Credit Facility Invoice and Asset Finance expansion possible Commercial Paper Interest Rate First 12 months 0% customer rate Bank reimbursed by Govt. for customer rate due Base Rate + Margin Calculated on a commercial basis including the effects of the government guarantee Spread + Sterling Overnight Index Swap (OIS) rate A1/P1/F1/R1 20bps + OIS After 12 months Revert to customer rate which takes into account the effects of the guarantee A2/P2/F2/R2 40bps + OIS Base Rate with option to convert to fixed rate through subsequent informed choice sale A3/P3/F3/R3 60bps + OIS Arrangement Fee 0% 0% (but may be charged by exception) N/A Guarantee Fee Charge borne by Bank: 25bps – 200bps dependent on tenor & client size Charge borne by Bank: 50 bps Year 1; 100 bps Years 2 & 3 Guarantee Amount & Type 80% Proportional 80% Proportional Security > £250k – no change Equivalent with at least 90% of the security you have granted for any financial indebtedness, excluding asset and invoice finance Unsecured < £250k – removal of requirement to exhaust security Other Notable Terms Standard Documentation Dividend Restriction, Restriction on Transfer by bank, eligibility criteria as reps/ warranties N/A Conditions for Early Repayment None Client option + Customary mandatory prepayment events Capital Repayment Hols All CBIL facilities will have 6mths CRH at the start of the loan. Further CRH available on request, subject to Credit Bullet repayment / repayment structure agreed case-by-case Excluded Sectors Financial Institutions; State Funded Primary and Secondary Education Banks and Insurance Companies; State Funded Primary and Secondary Education Financial Services
IG (rated or equivalent)
Greater than £45m Turnover Less than £45m Turnover
Classification: Public
GTB – Trade Product, May 2020
Classification: Public
Corona Business Interruption Scheme
may be available)
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Key Points:
Classification: Public
Must be impacted by Covid-19. UK based Small or Medium businesses with 50%+ of consolidated group turnover from trading. Maximum £45m consolidated group turnover. Purpose for working capital, to support BAU trading. Maximum loan must be i) less than double annual wages bill OR ii) less than 25% of 2019 turnover OR iii) appropriate to the liquidity need of the customer. Certain sectors are ineligible (Banks, Insurance Companies, public sector. Full list available). Certain sectors may not be able to borrow the full amount (aquaculture, agriculture, transport)
Undertaking in Difficulty
The company must be able to attest that it has not had:
unlimited liability companies its capital; or
Viability
The company have been viable prior to the Corona Crisis. You must have a business borrowing proposal which the lender would consider viable, were it not for the current pandemic
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Classification: Public
GTB – Trade Product, May 2020
Classification: Public
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Following the launch of Coronavirus Business Interruption Loan Scheme (‘CBILS’) and Covid Corporate Financing Facility (‘CCFF’) at the end of March, the Chancellor of the Exchequer announced a new Coronavirus Large Business Interruption Loan Scheme (‘CLBILS’) on 3rd April to help support UK corporates that are too large for CLBILS and ineligible for CCFF (either too small to access commercial paper or sub investment grade). Coronavirus Large Business Interruption Loan Scheme
by the outbreak of COVID-19
backing of, the Secretary of State for Business, Energy and Industrial Strategy
deferred revenues, leading to disruptions to their cash flow
scheme to borrow
guarantee for up to 80% of the balance of an eligible CLBIL
the Government guarantee has paid out
guarantee fee to the Government
repayments on the loan will increase
CLBIL
Classification: Public
10 Criteria
The Borrower was not, on 31 December 2019, an “undertaking in difficulty” as defined as: (i) you are not a public or private company (limited by shares or by guarantee) that has accumulated losses greater than half of your subscribed share capital; (ii) you are not a partnership, limited partnership or unlimited company that has lost more than half of your capital (as shown in your accounts) as a result of accumulated losses; (iii) you are not subject to collective insolvency proceedings, and you do not fulfil the criteria for being placed in collective insolvency proceedings; (iv) you have not received rescue aid where you haven’t reimbursed the loan or terminated the guarantee, and you have not received restructuring aid and are still subject to a restructuring plan; (v) you have not had the following solvency ratios for the past two years;
The Proposed Scheme Facility Amount is not greater than £25 million for Borrowers with a Group turnover of up to £250m or £50m for Borrowers with a Group turnover greater than £250m, and in each case is not greater than: (i) double the annual wage bill in respect of the United Kingdom business of the Borrower for 2019, or for the last year available, (and in the case of a Borrower created on or after 1 January 2019, the estimated wage bill of the first two years of operation); or (ii) 25% of the total turnover of the United Kingdom business of the Borrower in 2019; or (iii) with appropriate justification and based on self-certification of the Borrower, the amount may be increased to cover the Borrower’s liquidity needs for the next 12 months (such maximum, the “Maximum Amount”)
Criteria
The Proposed Scheme Facility contains the Dividend Restriction. Until the Scheme Facility has been repaid in full, the Borrower must agree not to: (i) declare, make or pay any dividend, charge, fee or other distribution (or interest
kind) on or in respect of its share capital (or any class of its share capital) or, if it is a partnership, any equivalent payment to its partners; (ii) repay or distribute any dividend or share premium reserve; (iii) pay or allow any member of its group to pay any management, advisory or other fee to or to the order of any of the shareholders or (if the Borrower is a partnership, partners) of the Borrower; or (iv) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so, except for: (1) payment of any dividend or distribution declared prior to the entry by the Borrower into the Scheme Facility, or (2) any payment to the extent that the same does not represent an increase to the level of equivalent payments made in the 12 months prior to taking out the Scheme Facility and that would not have a material negative impact on the ability of the Borrower to make all payments due to be made by it under the Scheme Facility The Borrower has not, and will not, use the Bank of England’s Covid Corporate Financing Facility (CCFF)
Classification: Public
GTB – Trade Product, May 2020
Classification: Public
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High Level Summary Process
public ratings not available
Arranger vs. Dealer
the issuer and any other dealers on the programme
Classification: Public
GTB – Trade Product, May 2020
Classification: Public
General Export Finance (‘GEF’)
cover imports, conducive to exports
imposed for facilities > £5m
A solution supporting access to working capital that is not linked to a specific export contract, is product agnostic.
PRODUCT
Bond Support Scheme
Key features Eligibility Short Summary Client & Bank Benefits
needed to secure the bond for the exporter to use as working capital.
bond
size of the bond
are a direct Tier 1 supplier to an UK exporter
be carrying on business in the UK;
contract between the exporter and a buyer carrying on business
under which the exporter supplies goods and/or services to that buyer; and
minimum of 20% UK content. Provision of a partial guarantee in support of UK exports to help banks meet demand for contract bonds
for the working capital facility.
maximum term of no more than two years
exporter wins an overseas contract that is higher in value than they can typically fulfil Supplier Credit Finance (‘SCFF’) Supporting an overseas buyer to purchase goods and/or services from a UK exporter. For contracts below £5m.
promissory notes to an overseas buyer to finance the purchase of capital goods and/or services from a UK exporter.
depending on requirements
exporters
issuance of contract bonds, guarantees and LOC, for eligible export contracts
specific security, in the form of cash collateral which ties up W/C.
necessary W/C finance from its lender to support an export transaction where its lenders may not have risk appetite for the full facility amount
export markets
W/C for supply contracts
exporters
delegation processes and practices
been shipped and/or services performed;
number of years and can borrow at fixed or floating rates;
due under the bills of exchange, promissory notes
UK content
5% in each) of the last 3 years; Export Working Capital Scheme (‘EWCS’)
suppliers
intend to enter, into a contract for the supply of goods and/or services with a company or other
business outside the UK
must be UK content
working capital facility cannot be greater than 75% of the export contract’s value. Supports access to working capital finance for specific export-related contracts for both pre- and post- shipment.
be paid directly to the exporter by the buyer before the facility starts to be repaid.
should be received upon contract signature.
content
Classification: Public
Scheme
Export Development Guarantee (’EDG’)
Key features Eligibility Short Summary Client & Bank Benefits
services or produces intellectual property / intangibles from the UK and is a UK based entity
each) of the last 3 years ECA Buyer Credit
the UK
least £5 million or the equivalent in foreign currency
at least 2 years
content
it is able to obtain the necessary working capital and capex finance from its lender to support export transactions in circumstances where its lenders may not have sufficient risk appetite for the full facility amount.
specific.
contract
number of years and can borrow at fixed or floating rates
payment, for whatever reasons, of the instalments of principal and interest due under the guaranteed loan.
benefit from UKEF support in relation to high value loan facilities provided by lenders
with some flexibility on the loan profile and currency (GBP, USD, EUR, JPY) Supports client’s working capital and capital expenditure requirements that are conducive to
years or longer by the borrower, while the exporter receives payment via the credit facility as amounts fall due under the export contract.
available under the loan is 85% of the contract
must be paid directly to the exporter by the buyer before the loan starts to be repaid. Loan to an overseas buyer, so that capital goods, services and/or intangibles can be purchased.
Classification: Public
UK Export Finance’s (UKEF) Export Development Guarantee (EDG)
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An important funding tool alongside the COVID-19 funding schemes
DIVERSIFICATION QUANTUM
High given UKEF's own underwriting capacity Opens up a new pool of capital whilst preserving banks' capacities
UP TO 5-YEAR TERM LOAN UP TO 80% GOVERNMENT GUARANTEE NO UPPER LOAN LIMIT
PRE-COVID-19 SCHEME KEY FEATURES KEY ELIGIBILITY CRITERIA
OR
KEY BENEFITS ACTIVITY IN THE UK OVERSEAS SALES
intellectual property / intangibles from the UK
Lender Lloyds Bank Borrow er UK Company Exporter Agreement
Undertaking
Guarantee Agreement Facility Agreement
Classification: Public
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Classification: Public
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What do I do if my company does not have a credit rating? If you do not have a public investment grade rating there are two main options for you to consider. We are happy to discuss these with you ahead of applying – please contact us at CCFFeligibleissuers@bankofengland.co.uk if you wish to do so. 1. BoE will accept banks’ internal ratings of corporates to assess credit status. For this purpose, and following a request confirmed by HM Treasury, Credit Benchmark has provided a credit assessment file to BoE, which consolidates in aggregate form the corporate credit estimates of a number of the largest UK banks. To be considered as having investment grade status based on banks’ internal ratings, and so deemed eligible for the scheme, firms will ordinarily be required to have at least three investment grade bank ratings and no speculative grade bank ratings as at 1 March 2020. To avoid a single bank’s credit view unduly affecting the
ratings available is at least BBB/Baa2/BBB/BBB. And BoE will accept only two bank ratings as sufficient proof of investment grade status where a firm is viewed as strongly investment grade i.e. BBB+/Baa1/BBB+/BBB(High) or above. 2. Alternatively, you could seek an assessment of credit quality from one of the major credit rating agencies as
are doing so because you wish to use the CCFF. The largest credit rating agencies are prepared to do this and the standard rating agency products we are prepared to accept as suitable evidence of credit status are listed below. We reserve the right to make use of other products. To note that BoE will accept either of these two options at any time. If, for example, your company applied with the intention of being deemed IG-equivalent based on banks’ internal ratings (option 1 above), but was subsequently found to be ineligible via this route, the Bank would still deem a firm IG-equivalent and therefore eligible based on a subsequent rating assessment from one of the major credit rating agencies (option 2 above).
Classification: Public
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Classification: Public