LatinFinance - July/August 2015 - 21

arises but also to provide stability and
predictability to exporters," Franco notes.
SAIN is guaranteeing a $135 million,
nine-year tranche of the financing for the
Kumasi Market renovations. Deutsche
Bank is the sole mandated lead arranger,
lender, underwriter and agent for the deal,
which also includes an uncovered, $37
million eight-year loan that will go toward
the down payment to Contracta. The
guarantee, which is issued in the form of
a Seguro de Crédito à Exportação (SCE),
marks the first time the guarantee has been
used by a private commercial lender in the
service sector. Prior to Kumasi, Natixis had
been the only other commercial lender
to utilize the guarantee, in two Embraer
aircraft financings in 2011 and 2013.
"Once the first deal is closed by a bank,
others tend to follow," says Graciema de
Almeida, a senior attorney at Pinheiro
Neto that represented Deutsche Bank in
the Kumasi Market deal. "In that sense,
Deutsche's role in discussing and adjusting
that specific type of certificate at the time,
together with the government, opened the
doors to other banks looking at the SCE as
an interesting mechanism."
Tailoring the solution
Executed export guarantees are backed by
the Export Guarantee Fund (FGE), which
holds roughly $31.2 billion in exposure
mostly in infrastructure, but also in civil
aircraft, power equipment, transportation
and defense sectors in Angola, Argentina,
Dominican Republic, the US, Venezuela
and other countries. BNDES takes up 99%
of that volume and while the program

Infrastructure is fundamental
Export Guarantee Fund Exposure Per Sector

Civil Aircraft (27%)

Defense (2%)
Other (2%)
Trasnportation (2%)
Power Equipment (2%)

Source: Agência Brasiliera Gestora de Fundos Garantidores e Garantias

clearly has a strong record, the government
is working with market players to make
the guarantee relevant and practical to
commercial lenders and their clients.
"The language is very outdated and
because BNDES might not have been very
demanding in that sense, it was not very
marketable," says
de Almeida. "The
Total exposure grows by 72.9%
Brazilian government
Export Guarantee Fund Net Worth and Exposure
is interested in making
35
this a viable guarantee
Net Worth
Exposure
to the banks to
30
promote the financing.
They are reviewing all
25
of the draft certificates
to make them more
20
bankable."
Fashioning the
15
guarantee and the
related certificates
10
to allow for loan
syndication, making
5
coverage available
in the foreign
0
currency of the
2007 2008 2009 2010 2011 2012 2013 2014
financing, translating
Source: Agência Brasiliera Gestora de Fundos
parts of the guarantee into English and
Garantidores e Garantias
clarifying concepts that are standard in
international banking are all examples of
the adjustments being made. The ABGF
is working out technical agreements with
several European export credit agencies
and, like their Western peers, is also using
country risk ratings issued annually by the
Organization for Economical Cooperation,
to offer more uniform pricing for
borrowers.
While change is rarely easy, especially
for large bureaucratic bodies, international
lenders and their clients are not the only
entities reaping benefits.
"There is the sense of becoming more
professional, becoming more international
and realizing that by bringing more
international banks on board, we bring
with us all of our expertise, rules of
compliance, loyal customers... which they
didn't really have beforehand," Shoshany
says of SAIN and ABGF. "It's one of the
interesting things about SAIN, they believe
that by bringing in more international
banks, we will be able to bring in new
exporters and new buyers based on the
relationships and portfolio that we have."
Infrastructure (66%)
Increasing efficiency is another clear
indicator of the advantages of the evolving
program. The Kumasi market deal was
sealed in roughly five months compared
to the 18 to 24 month timeframe that is

July/August 2015 - L ATINFINA NCE.COM 21
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