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 • Overseas Private The United States 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 OPIC Clients • Official Export Credit • OPIC supports US Agency (ECA) of the US private sector investment in emerging and • EXIM supports US developing economies. Exports to foreign buyers in nearly every corner of the globe.
How do these banks fund projects? Full Faith and Credit of the USG EXIM OPIC • Loans to foreign purchasers • Direct Loans to Small of goods and services Businesses • Project finance • Investment Guarantees • Direct loans • Political Risk Insurance • Working Capital – Political Violence • Trade Credit Insurance – Currency Inconvertibility • Long-term & Medium-term – Expropriation Guarantees - Tenors 5-18 • Private Equity Funds years • Tenors from 3-15 years • Subject to OECD Guidelines
US ELIGIBILITY EXIM OPIC US Goods and Services are • Significant US participation is • eligible required. Options include: EXIM requires that at least • Minimum 25% US equity • 50.1% of the goods and participation for finance services are exported under a • Franchise supply contract be of US origin • Management contract for S hort Term Finance. • Selected OPIC private equity For Medium / Long-term • fund transactions: only U.S. content including profit margin , up to 85%.
The Weeds Developing a Reasonable Assurance of Repayment EXIM OPIC EXIM Bank loan is equal to • OPIC normally covers up to • 85% of the value of the goods 60% of the total cost of the and services of the U.S. supply venture, but a higher loan contract Loans to strong purchasers or amount may be considered. • those guaranteed by a strong • OPIC is statutorily limited corporate or sovereign guarantor do not require any and is unable to support equity. more than 75% of a project’s Borrower/purchaser required to • cost. make a cash payment equal to at least 15% of the contract. • Loan Limits: $250M Loan Limits: No limit •
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 OPIC • Iran • Iran • Cuba • Cuba • North Korea • China • Defense Articles • High Income Countries • Angola • Military Police Activities • Reputational Concerns • 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
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