empower your business 1 sace in kazakhstan: a valuable partner september 2007

EMPOWER YOUR BUSINESS1

SACE in Kazakhstan: a valuable partner September 2007


Index

Why SACE

Kazakhstan economy

Credentials

SACE in Kazakhstan

SACE’s network

SACE Group


SACE’s network

Why SACE

Kazakhstan economy

Credentials

SACE in Kazakhstan

SACE Group


SACE supports companies in developing their business abroad,

offering a wide range of credit insurance and reinsurance products,

investment protection, surety and advanced financial solutions

SACE supports companies in developing their business abroad,

offering a wide range of credit insurance and reinsurance products,

investment protection, surety and advanced financial solutions

SACE Group

Credit insurance, reinsurance and guarantees for Italian exports and investmentsCredit insurance, reinsurance and guarantees for Italian exports and investments

Short-term insurance services both in the domestic and foreign markets.Short-term insurance services both in the domestic and foreign markets.

Leader in surety business, specifically in the construction industryLeader in surety business, specifically in the construction industry


SACE Group: a 30 year-experience in credit insurance

Establishment of SACE as public entity under the surveillance of the Ministry of Economy & Finance (MEF)

SACE is transformed into an independent institution

SACE is transformed into a joint stock company, whose capital is wholly owned by MEF

SACE creates SACE BT, entering the short-term credit insurance market

SACE enlarges its area of business to the support of “made by Italy” abroad

SACE BT acquires 70% of Assedile, leading operator in the surety sector

Moody’s assigns SACE a first time insurance financial strength rating of Aa2, with stable outlook

1977

1998

2005

2004

Further enlargement of SACE SpA operational perimeter to include the concept of supporting “ Italian Interest ”2006


2006

A strong financial partner

Key figures, mln €

16.081

17.073

2005 2006

New guarantees (€ mln)

+6,2%

+21,6%

Gross written premiums (€ mln)

197,7

2005 2006

240,5

+22%

+12%

-33%

-39%

-26%

-

+4%

Gross written premiums

Outstanding

Net Profit

Claims

Net Equity

Rating (Moody’s)

Employees

240,5

33.473,91

510,1

44,3

6.742,02

Aa2

463

Δ%

197,7

29.890,81

757,4

73,9

9.092,1

Aa2

445

2005

(1) Principal + interest (net of reinsurances)(2) Post Equity reduction (feb 2007)


Africa15,10%

Central America4,83%

South America7,10%

North America0,18%

Oceania0,10%

Asia6,36%

Europe38,32%Middle East

28,00%

SACE Exposure

SACE Exposure: sectors

SACE Exposure: geographic area

Italy8,80%

Russia9,60%

Turkey10,50%

Egypt11,00%

Iran16,40%

Otherscountries

43,7%

0%

10%

20%

30%

40%

50%

Iran Egypt Turkey Russia Italy Otherscountries

SACE Exposure: main countries


Kazakhstan economy

Credentials

SACE in Kazakhstan

SACE’s network

SACE Group

Why SACE


Why SACE: beyond export

Yesterday Today Tomorrow

From “made in” to “made by” Italy

From “made by” to supporting the

internationalization of Italian companies

From the internationalization of Italian companies to “national

interest” and competitiveness

A. Broadening our area of intervention

B. Products Development

Traditional Products New Products Next development

Buyer Credit

Supplier Credit

Civil works

Political Risk Insurance

L/C confirmation

Financial Guarantee (loan, bonds, working capital needs) - export or investment related

Surety

Local Currency FinancingRisk Sharing Guarantee

Leasing/Factoring

Securitization


(*) Such threshold is reduced to 10% for listed companies.

SACE has widened its eligibility criteria:

SACE is now able to provide cover for the financing of:

supply contracts signed by an Italian company;; or

supply contracts signed by a foreign company participated for at least 20%* by an Italian company, or

Italian origin supplies under contracts signed by a non-Italian company, and

local costs, in application of OECD Regulation Framework

Italian origin of goods is not an eligibility requirement, as SACE could cover all goods/services (of Italian, EU, or extra EU origin) provided under such contract

SACE New Range of Activities: 1) Export Related Products


Exporter’s Country (*)

Italy

Foreign country

Italy

Foreign Country

1 - Eligibility of Italian content

Limited flexibility to cover the financing of non Italian supplies

3 - Eligibility of non Italian content (*) of the export contract signed by an Italian company(*) Local content eligible within the limits set by OECD Regulatory Framework

2 – Eligibility of Italian content

Financing Cover for non Italian supplies is not allowed

4- Eligibility of supplies by foreign companies

participated by Italian companies

New

eligibility

criteria

New

eligibility

criteria

SACE New Range of Activities: Export Related Products (con.d)

From

to

to

Traditional

eligibility

criteria

From


(*) Participated at least 20% by an Italian companies. Such threshold is reduced to 10% for listed companies.

Investments made by Italian companies / Italian subsidiaries’(*)

Transactions of “strategic interest” for the Italian economy:

Strategic imports (power, gas, oil, raw materials for re-exports);

Strategic foreign customers/partners to Italian companies in their activities abroad;

Infrastructures (including domestic infrastructures) supporting: (a) the internationalization of the Italian economy (terminals, railways, roadways, etc), or (b) diversification of sources of energy for the domestic market (pipelines, regasification plants, etc;

Internationalization of Italian banks;

Employment and economic growth in Italy;

Strategic industries: renewable energies, environment, technological innovation

Investments made by Italian companies / Italian subsidiaries’(*)

Transactions of “strategic interest” for the Italian economy:

Strategic imports (power, gas, oil, raw materials for re-exports);

Strategic foreign customers/partners to Italian companies in their activities abroad;

Infrastructures (including domestic infrastructures) supporting: (a) the internationalization of the Italian economy (terminals, railways, roadways, etc), or (b) diversification of sources of energy for the domestic market (pipelines, regasification plants, etc;

Internationalization of Italian banks;

Employment and economic growth in Italy;

Strategic industries: renewable energies, environment, technological innovation

SACE New Range of Activities: 2) Non-Export Related Products


(*) Such threshold is reduced to 10% for listed companies.

First demand guarantee: from insurance policies to 100% unconditional and irrevocable guarantees (all risks including documentary risk are covered) - Advantages for the borrower: reduction of costs and supporting documents;

Corporate/Project bond issuance - advantages for the borrower: (i) lower cost of funding against traditional buyer’s credit, (ii) diversification of funding sources and preservation of room in its credit lines with the banking system; (iii) access to a high number of investors in the Capital Markets;

Working capital facilities granted to (i) foreign corporate/SPV participated by Italian investors, (ii) Italian exporters;

Equity loan cover for the benefit of Italian investors;

Political cover for overseas investments;

Bid/performance/advanced payment bonds;

Local Currency Facility;

Securitisation - credit enhancement;

Islamic Finance

First demand guarantee: from insurance policies to 100% unconditional and irrevocable guarantees (all risks including documentary risk are covered) - Advantages for the borrower: reduction of costs and supporting documents;

Corporate/Project bond issuance - advantages for the borrower: (i) lower cost of funding against traditional buyer’s credit, (ii) diversification of funding sources and preservation of room in its credit lines with the banking system; (iii) access to a high number of investors in the Capital Markets;

Working capital facilities granted to (i) foreign corporate/SPV participated by Italian investors, (ii) Italian exporters;

Equity loan cover for the benefit of Italian investors;

Political cover for overseas investments;

Bid/performance/advanced payment bonds;

Local Currency Facility;

Securitisation - credit enhancement;

Islamic Finance

SACE new financial products: some examples


Credentials

SACE in Kazakhstan

SACE’s network

SACE Group

Why SACE

Kazakhstan economy


8,0%

8,5%

9,0%

9,5%

10,0%

10,5%

11,0%

2004 2005 2006s 2007p 2008p

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

Foreign Debt/GDP GDP

Kazakhstan macroeconomics

GDP• In 2006 the GDP real rose by 10,6%• Foreign Debt/GDP ratio expected around 90%

Key factors

• Kazakhstan has sustained very strong macroeconomic performance since the start of the decade

• Inflation should decrease below 8% during 2007

Public finances

• External debt has risen significantly

• Economic growth in the forthcoming years should continue to be strong

Foreign Debt/GDP

Sources: SACE’s Country Risk Department

-3,5

-3

-2,5

-2

-1,5

-1

-0,5

0

0,5

2004 2005 2006 2007 2008

mln

US

$

-4

-3,5

-3

-2,5

-2

-1,5

-1

-0,5

0

0,5

1

1,5

%

Balance Current Transaction Balance Current Transaction/GDP

Balance


-3.000

-2.000

-1.000

0

1.000

2.000

3.000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Import Export balance

mine1,4%

footwear4,8%

chemical2,5%

transport3,8%

forniture5,8%

others7,3%

electronic5,9%

textile6,3%

steel9,0%

mechanics53,3%

Italian Import/Export with Kazakhstan

Kazakhstan – Italy: International Trade

Source: ISTAT

Italian Exports to Kazakhstan by industrial sector

• Increase of Italian imports due

to strong demand for mining

products

• Italian exports concentrated in

machinery & Equipments

• Italian exports had an increase

of 55% during 2006

• The amount of direct

investments reached the

amount of USD 10 billion

during 2006. Italy is the ninth

country for amount invested in

Kazakhstan

mlneuro


Why SACE

Kazakhstan economy

Credentials

SACE’s network

SACE Group

SACE in Kazakhstan


Benefits of SACE’s support

Buyers /

Borrowers

Banks

Longer tenors Bigger tickets Diversification of financing sources Additional credit capacity without affecting bank’s lines Competitive all-in cost of financing

Release of capital which can be used for other investments Zero-weighted credit as per Basel 1 & 2 Competitive pricing


Rating

OECD

Sovereign/Bank/Corporate Risk: Open

Sovereign/Bank/Corporate Risk: Open

SACE CoverPolicy

Country Category 4/7 Country Category 4/7

S&Ps: BBB Moody’s: A2 Fitch: BBB

S&Ps: BBB Moody’s: A2 Fitch: BBB

Kazakhstan: Market & ECAs classification


Why SACE

Kazakhstan economy

SACE in Kazakhstan

SACE’s network

SACE Group

Credentials


Commitment: € 18.5 mln

Supplier: Officine Meccaniche Villa &

Bonaldi S.p.a.

Buyer: China Petroleum Material and

Equipment Corporation

Country: China

Structure: Supplier Credit Policy

September 2005

Commitment : € 22 mln

Exporter: Gruppo Comau

Beneficiary: Bayerische- HVB

Country: Germany, South Africa

Structure: Surety Bond

September 2005

Commitment: €230 mln

Supplier: Danieli & Officine Meccaniche S.p.a.

Buyer: OMK Steel (Russia)

Country: Russia

Structure: Strcutured Finace

June 2006

December 2005

Commitment: € 52 mln

Exporter: Ansaldobreda S.p.a.

Beneficiary: BNP Paribas

Buyer: Greater City Municipality of Kayseri

Country: Turkey

Structure: Buyer Credit Insurance Policy

Commitment :€ 1.7 mln

Debtor: Dainese S.p.a.

Beneficiary: Banca Intesa S.p.a.

Country: Italy

Structure: Credit Enhancement

November 2005

Commitment: € 1 bln

Insured: Italcementi S.p.a.

Beneficiary: Ciments Francais

Country: Egypt, India, Kazakhstan, Thailand

Structure: Investment Policy

November 2005

Commitment : € 13.5 mln

Insured: Permasteelisa S.p.a.

Buyer: Government of the State of Qatar

Country: Qatar

Structure: Civil Works Policy

October 2005


Insured: Rivoli Spa

Buyer :Parà - Secretaria Executiva de

Transportes -SETRAN

Country: Brazil

Structure: Civil Works Policy

October 2005


Supplier: Perfora S.r.l.

Buyers: Brazilian companies (5)

Country: Brazil


Sept- Dec 2005


Supplier: Italdesign Giugiaro S.p.a.

Buyer: China Motor Corporation

Country: Taiwan


September 2005


Exporter: Alenia Aeronautica

Beneficiary: Barclays Bank

Buyer: Air Deccan

Country: India


October 2005


Exporter: Ansaldobreda S.p.a

Beneficiary: DSB- Material

Country: Denmark

Structure: Surety Bond

July 2005

Commitment: $ 1.2 bln

Insured: Bond Issued by Gazprom

Supplier: Snam,Saipem,Ilva,Nuovo Pignone

Country: Russia

Structure: Structured Finance Guarantee

July 2005


Exporter: Binacchi & C. S.r.l.

Beneficiary: Banco Santander Central Hispano

Buyer: Friboi LTDA

Country: Brazil


May 2005


Debtor: Alessi S.p.a.

Beneficiary: Banca Intesa S.p.a.

Country: Italy

Structure: Credit Enhancement

November 2005

Credentials


Why SACE

Kazakhstan economy

Credentials

SACE in Kazakhstan

SACE Group

SACE’s network


Russia

Hong Kong

Cina

Next openings• San Paolo• Istanbul• Mumbai• North Africa

SACE’s network

Regional Offices• Milan• Modena• Rome (Headquarters)• Turin• Mestre Venice

Foreign Office• Moscow• Hong Kong• Shanghai

Italy


This presentation has been prepared by SACE SPA solely for information purposes. The information contained herein has not been independently verified.Under no circumstances should this document be used or considered as an offer to sell or a solicitation of an offer to buy any insurance/financial instrument mentioned in it. The information contained herein has been obtained from sources believed to be reliable but SACE does not represent or warrant that it is accurate and complete. The views reflected herein are those of SACE and are subject to change without notice. The products mentioned in this document may not be eligible for sale in some states or countries, or suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary.The information herein may not be reproduced or published in whole or in part, for any purposes, or distributed to any other party, without the written permission of SACE S.p.A. By accepting this document you agree to be bound by the foregoing limitations.

Disclaimer

empower your business 1 sace in kazakhstan: a valuable partner september 2007

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