International Financial Payments June 19, 2014 Dulce A. Zahniser - - PowerPoint PPT Presentation

International Financial Payments

June 19, 2014

Dulce A. Zahniser Managing Director Towpath Group International, LLC

A little about Towpath

• Towpath provides client support for businesses

expanding their presence in the global marketplace. Our past clients have specialized in global technology solutions, energy, agribusiness, real estate development, and the entertainment industry.

• Our tool box includes the mitigation resources of

the Export Import Bank of the US (EXIM), the Overseas Private Investment Corporation (OPIC), the US Trade and Development Agency (USTDA), and the Departments of State, Commerce, Agriculture, Treasury and Homeland Security as well as the US Embassy system.

EXIM & OPIC

• Export Import Bank of

The United States

• Overseas Private

Investment Corporation

Finance: A Tale of Two US Government Agencies

• Both EXIM and OPIC are self-sustaining,

independent agencies of the United States Government

• As part of their business model, both charge fees

and interest to their clients and as a result return money to the US government annually.

• In 2013, OPIC returned $400M back to the USG

Treasury, while EXIM generated $1B for the USG Treasury in 2013.

• Both agencies are subject to “additionality” – they

cannot compete with the private market.

What do EXIM and OPIC offer?

EXIM Clients

• Official Export Credit

Agency (ECA) of the US

• EXIM supports US

Exports to foreign buyers in nearly every corner of the globe.

OPIC Clients

• OPIC supports US

private sector investment in emerging and developing economies.

How do these banks fund projects? Full Faith and Credit of the USG

EXIM

• Loans to foreign purchasers
• f goods and services
• Project finance
• Direct loans
• Working Capital
• Trade Credit Insurance
• Long-term & Medium-term

Guarantees - Tenors 5-18 years

• Subject to OECD Guidelines

OPIC

• Direct Loans to Small

Businesses

• Investment Guarantees
• Political Risk Insurance

– Political Violence – Currency Inconvertibility – Expropriation

• Private Equity Funds
• Tenors from 3-15 years

US ELIGIBILITY

EXIM

• US Goods and Services are

eligible

• EXIM requires that at least

50.1% of the goods and services are exported under a supply contract be of US origin for Short Term Finance.

• For Medium / Long-term

transactions: only U.S. content including profit margin, up to 85%.

OPIC

• Significant US participation is
• required. Options include:
• Minimum 25% US equity

participation for finance

• Franchise
• Management contract
• Selected OPIC private equity

fund

The Weeds Developing a Reasonable Assurance of Repayment

EXIM

• EXIM Bank loan is equal to

85% of the value of the goods and services of the U.S. supply contract

• Loans to strong purchasers or

those guaranteed by a strong corporate or sovereign guarantor do not require any equity.

• Borrower/purchaser required to

make a cash payment equal to at least 15% of the contract.

• Loan Limits: No limit

OPIC

• OPIC normally covers up to

60% of the total cost of the venture, but a higher loan amount may be considered.

• OPIC is statutorily limited

and is unable to support more than 75% of a project’s cost.

• Loan Limits: $250M

Some Conditions

• US Effects – No negative impact on US

Industry

• Environmental Assessment – Can’t harm the

environment using World Bank Standards

• Workers Rights – Meet ILO standards
• Human Rights – Host Country Issue
• EXIM – Sovereign Buyers Allowed
• OPIC – Majority of Project must be Private

What are Some Show-Stoppers?

EXIM

• Iran
• Cuba
• North Korea
• Defense Articles
• Angola
• Reputational Concerns

OPIC

• Iran
• Cuba
• China
• High Income Countries
• Military Police Activities
• Reputational Concerns

And Things to Think About

• Export Licenses and Compliance –BIS, CCL &

ITAR

• Export Controls Factor into EXIM Transactions
• Lenders Covenants and Compliance
• Foreign Corrupt Practices Act (FCPA)
• Office of Foreign Asset Control (OFAC)
• Money Laundering/KYC & Economic Sanctions
• Self-Monitoring Questionnaires
• EXIM – Who is your end user?
• OPIC – Due Diligence

USTDA

• US Trade and Development Agency
• The agency's program helps to position U.S.

firms in the early stages of project development to compete for lucrative contracts during the implementation phase

– Prefeasibility and Feasibility Studies – Conferences designed to focus on US goods and services – Reverse Trade Missions

Multilateral Development Banks

• World Bank Group

– International Finance Corporation (IFC) – Multilateral Investment Guarantee Agency (MIGA)

• Inter-American Development Bank (IADB)
• European Bank of Reconstruction and

Development (EBRD)

• Asia Development Bank (ADB)
• Africa Development Bank (AfDB)

Some Helpful Websites

EXIM Bank – www.exim.gov OPIC – www.opic.gov USTDA – www.ustda.gov BIS – www.bis.doc.gov IFC – www.ifc.org EBRD – www.ebrd.com ADB – www.adb.org AfDB – www.afdb.org IADB – www.iadb.org

Contact Information www.towpathgroupintl.com

Dulce Zahniser dazahniser@towpathgroupintl.com 703-671-0450 Mary Wilmot mkwilmot@towpathgroupintl.com 585-746-3759