sace in russia sace moscow office 21 th april 2010

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SACE in Russia Sace Moscow office 21 th April 2010. Our strengths. Over 30 years of providing risk management solutions to small and medium-sized businesses and large corporations. EXPERIENCE. Aa2 credit rating (Moody’s) Shareholders’ equity: € 5.9 Bn. FINANCIAL SOUNDNESS. - PowerPoint PPT Presentation

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  • SACE in RussiaSace Moscow office 21th April 2010

  • *Our strengthsOver 30 years of providing risk management solutions to small and medium-sized businesses and large corporationsEXPERIENCEAa2 credit rating (Moodys)Shareholders equity: 5.9 Bn

    FINANCIAL SOUNDNESSOutstanding commitments for over 50 Bn to insure commercial and financial transactions in over 180 countriesRELIABILITYInsured business: 34 Bn, + 22% yoyConsolidated net income: 460 Mn, + 32% yoyGross written premiums: 430 Mn, + 13% yoyFINANCIAL RESULTS

  • *Risks insured by geographical areaWe cover political and commercial risk in over 180 countriesOutstanding GuaranteesOthers27 %Sub Saharian Africa2 %Asia Pacific6 %

    Balkans3 %European Union 28 %LATAM6 %North America4 %Russia & CIS16 %Turkey8 %SACE Exposure Top 3 CountriesItaly15%Russia13% 4.4 BnTurkey 8%

  • *SACEs activities in Russia2009 has been a difficult year worldwide. However, Russia continued to offer opportunities for medium and long-term investments and remained a primary market both for Italian export and SACE.During 2009, SACEs total exposure in Russia increased by 20%, reaching 4.4 Bn. In Russia SACE is strongly concentrated in commodity-oriented sectors (oil and gas, metals) and top 10 largest borrowers represent 52% of the portfolio.Current pipeline is ample however still concentrated in traditional sectors (oil and gas, petrochemicals, steel). The current project pipeline for 2010 may increase SACEs exposure to Russia by over 100% (close to 20% of SACEs total exposure worldwide).

  • *SACEs support in RussiaTotal Exposure38 new operations in 2009, for a total amount of 2 BnNew GuaranteesOver 20 potential transactions for 2010, for a total amount of 2.2 BnPipeline 4.4 Bn (13% of total portfolio, 2nd Country in terms of total exposure)and by CounterpartySACEs Russian exposure by Sector

    Grafico1

    0.260.74

    Banks

    Corporate

    Foglio1

    BanksCorporate

    SACE's exposure by Counterparty26%74%

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    Grafico1

    0.49

    0.26

    0.17

    0.03

    0.02

    0.01

    0.01

    Vendite

    Foglio1

    Vendite

    Metals49%

    Banks26%

    Oil&Gas17%

    Chemical/Petrochemical3%

    Telecom2%

    Mecanical1%

    Others1%

  • *SACEs support in CIS CountriesTOTAL 800 MnTOTAL 287 MnNotwithstanding the difficult market conditions, during 2009 SACE maintained a consistent level of support to Italian business in CIS Region. New guarantees increased by 30% in terms of volume compared to 2008.In 2009, following certain improvements in the economic situation and the positive collaboration between local authorities and the IMF, SACEs Board approved a new 50 Mn insurance ceiling for Belarus.

    Grafico1

    0.56

    0.33

    0.098

    0.012

    Vendite

    Foglio1

    Vendite

    Ukraine56%

    Kazakhstan33%

    Belarus10%

    Azerbaijan1%

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    Grafico1

    0.37

    0.48

    0.12

    0.03

    Vendite

    Foglio1

    Vendite

    Ukraine37%

    Kazakhstan48%

    Belarus12%

    Azerbaijan3%

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  • SACE Business LinesTraditional Business

    Purpose: to support the Italian exports and diversify SACEs portfolioExport credit Insurance Political Risk InsuranceNational Interest Programme

    Purpose: to support the Internationalisation of Italian companies and any strategic interest for the Italian EconomyInternationalisationMarket WindowNon marketable business, bound by Consensus Rules Non marketable business, off Consensus Rules, supporting the Italian investments abroadNew marketable business, supporting the Internationalisation of Italian EconomyNew marketable business, supporting any strategic interest for the Italian Economy

  • Export Credit: Sales of goods & services StructureItalian CompaniesForeign EntitiesExport of goods and servicesPayment of exported goods

    Insurance policyTarget ClientsMain FeaturesForeign subsidiaryTailoringSACEItalian Companies and/or their Foreign Subsidiaries exporting goods and services who are interested in granting their foreign counterparts short/medium/long term deferred payments

    Risk cover for single transactions abroadCoverage up to 100% of the insured amounts Coverage against non-payment, unilateral termination of contract, destruction/damages, requisition, seizure, unfair call of bonds, caused by political or commercial eventsMonetization of assets through assignment without recourse of the insurance policy to a bank or financial institutionStandard: Supplier Credit: for any coverage need on single transactions risks abroad.Easy: Basic: easy and fast tool for contracts up to 500.000, coverage against non-payment within 36 months tenor, also available on line: www.exportplus.it Plus One: for contracts up to 5 Mln euro, coverage against non-payment up to 5 years tenor, available on line: www.exportplus.it

  • Export Credit: Framework AgreementStructureTarget ClientsMain FeaturesItalian and foreign banks interested in financing and insuring credits deriving from the confirmation of documentary creditsor buyers credits, in connection to Italian exports or related activities (e.g. services, studies and design work abroad). The maximumacceptable tenor is 5 years.

    Countries and financed banks - accepted within pre-agreed cap Simplified procedures and insurance cover via simple notification by the bank % of coverage up to 100% of the financed amount for political and commercial risks

    Confirmation of Documentary CreditTime 1Time 2Time nItalian CompanyForeign CompanyForeign Bank (acting for the Foreign company) Bank (Italian or foreign operating in Italy) L/C requestCredit paymentExport ofgoods/services

    Confirmation ofDocumentary CreditInsurance PolicySACE

  • Export Credit: L/Cs ConfirmationStructureTarget ClientsMain FeaturesItalian and foreign banks interested in insuring credits deriving from the confirmation of documentary creditsissued by a foreign bank (located in a country other than that of the confirming bank), in connection to Italian exports or related activities. The maximum acceptable tenor is 5 years.

    Increasing banks potential volumes in L/C confirmation business Encouraging foreign banks to issue L/Cs for the benefit of Italian exporters% of coverage up to 100% of the financed documentary credit amounts for the political and commercial risksExport of goods and services

    Insurance PolicyPayments for the exports of goods and servicesForeign CompanyConfirmation and financing of Documentary CreditBank (Italian or foreign operating in Italy) Foreign Bank (Operating for the Foreign Company)Italian CompanyIssuance of L/CL/C requestSACE

  • Export Credit: Cross Border Investment & Preshipment Facilities StructureTarget ClientsMain FeaturesItalian corporates and /or their Foreign Subsidiaries/Affiliates in search of financing for strategic investments abroad, namely: (I) M&A, JVs, setting up of new production units as well as new subsidiaries (Trade Related & Cross Border Investment Facilities) and (II) working capital needs (Pre-Shipment)

    First demand guarantee in favour of the funding bank Risk participation with the funding bank, on a % to be agreed, against non-payment risk Release of the banks regulatory capital (the guarantee is zero weight for Basel II) Freeing up borrowers credit lines Participation Fee paid by the funding bank to SACE on an up front / running basis More competitive borrowers all-in cost of funding

    GuaranteeFundingItalian related businessItalian entities and /or their Foreign Subsidiaries

    Banks

    GuaranteeTime 1Time 2Time nItalian EntitiesItalian Related BusinessBanksWorking Capital financing(I) Cross Border Invest. Facility(II) Pre - Shipment

    CapitalMarkets

    FundingSACESACE

  • Export Credit: Internationalisation activitiesStructureTarget ClientsMain FeaturesBanks and Financial Institutions financing Small and Medium Enterprises (SMEs) for internationalization purposes. This product allows the collection and possibly the subsequent securitization of loans.

    Guaranteed Loans Portfolio: must be at least of almost 50% SMEs and, for the remaining part, of enterprises with total annual revenues under 250 mln.Loans contracted at market price for enterprises exporting at least 10% of their production, with a rating established between SACE and the bank.Risk sharing between SACE and the Financing Bank The financed quota guaranteed by SACE (normally up to 70%) The financed quota guaranteed by SACE (normally up to 70%) is weighted equal to that of the Italian State SMEs easier access to financial markets, also on a m/l term basis, without drawing on their credit lines

    Step 1

    Loans Portfolio AssignmentStep 1 Financing to Italian ExportersTranche 1Tranche 2Tranche EquityTranche nSPVStep 2

    SecuritisationStep 3 Guarantee

    Bank

    A: Loans collectionB: Loans securitisation

    Bank

    Step 2 GuaranteeSACESACE

  • Export Credit: Capital contribution abroadStructureTarget ClientsMain FeaturesItalian Companies and/or their Foreign Subsidiaries interested in establishing companies abroad or holding a stake in foreign company.

    Investment carried out through: Capital contributions (capital goods, technologies, licenses and patents, design services civil works management and others), or Shareholding subordinated loans /Guarantees Financing of foreign investments through the possibility o

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