Letter of Credit Consultancy Services

Published in September 2014 – Shipowner companies usually make advance payments to the shipyards when giving a new vessel order. These advance payments could reach up to 80% of the project amount.

In order to cover non-delivery risks, shipowners demand advance payment bank guarantee from the shipyards against the upfront payment that they have made.

Finnvera to guarantee financing for new vessel orders placed at Meyer Turku Oy.

Finnvera will take part in the pre-delivery financing of the cruise ships ordered by TUI Cruises GmbH from the Turku shipyard.

The ships will be delivered in 2015-2017. Finnvera will guarantee between 50 and 80 per cent of the pre-delivery financing granted to the shipyard. With the new orders, Finnvera’s maximum exposure for Meyer Turku Oy will reach about EUR 300 million.

Finnvera will also guarantee 95 per cent of the post-delivery buyer credits of the ships ordered by TUI Cruises GmbH.

The credit period is 12 years. With the two new ships and the two ships ordered already earlier, Finnvera’s exposure for TUI Cruises GmbH will reach a maximum of about EUR 1.3 billion. Finnvera’s subsidiary Finnish Export Credit Ltd will provide the financing for the buyer credits arranged by commercial banks.

Further information:
Topi Vesteri, Executive Vice President, tel. +358 400 702 002
Pauli Heikkilä, CEO, tel. +358 29 460 2400

About Finnvera:

Finnvera provides financing for the start, growth and internationalization of enterprises and guarantees against risks arising from exports.

Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, domestic guarantees, venture capital investments, export credit guarantees and other services associated with the financing of exports.

The risks included in financing are shared between Finnvera and other providers of financing.

Finnvera is a specialized financing company owned by the State of Finland and it is the official Export Credit Agency (ECA) of Finland.

Finnvera gives guarantees against political or commercial risks associated with the financing of exports.

Political risks are risks that arise from the economic or political situation in a country where a Finnish export company has customers. Commercial risks pertain either to the buyer or to the buyer’s bank.

Finnvera’s operations are steered by the industrial and ownership policy goals laid down by the State.

Among these goals are: increasing the number of starting enterprises; enabling financing for changes encountered by SMEs; and promotion of enterprise growth, internationalization and exports.

In its operations, Finnvera is expected to adhere to the principle of economic self-sustainability.

The Doing Business project is supported by World Bank.

Doing Business reports not only let you compare countries, but also let you compare certain cities within a specific country in terms of Doing Business criteria.

Doing Business in Nigeria 2014—the third sub-national report of the Doing Business series in Nigeria— compares business regulations in 35 states and Abuja, FCT.

The report focuses on federal and state regulations that affect 4 stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, registering property, and enforcing contracts.

The report finds that 22 states improved in at least one of the benchmarked areas, making it easier for local entrepreneurs to start and operate a business.

The report also compares gender-specific employment data from the main public agencies in charge of administering the benchmarked areas:

• land registries,
• building authorities and
• Corporate Affairs Commission branches in each state.

Main Findings

• This year’s report recorded 34 improvements, of which 13 focused on starting a business, 8 on dealing with construction permits, 10 on registering property, and 3 on enforcing contracts.
• The states of Cross River, Ekiti, Niger, Ogun, and Rivers made the biggest strides towards the national frontier of good practices.
• While most reform efforts focused on reducing the complexity and cost of regulatory processes—including improvements in internal processes of federal and state agencies—several states also focused on longer-term judicial reforms to strengthen the legal institutions for contract enforcement.
• Despite improvements, challenges persist: no single state ranks at the top in all the areas measured.
• Sharing local good practices and coordinating better between federal and state governments are critical to improving the business environment for all Nigerians.
• For the first time, the Doing Business in Nigeria series recorded reforms that make it easier to start a business: 13 states introduced reforms improving the internal processes of federal or state agencies, such as the Corporate Affairs Commission and state ministries of commerce.
• Less burdensome requirements and faster approvals of construction permits, like in Adamawa and Jigawa, would make Nigeria one of the best performers in this area, more efficient than the OECD average of 13 procedures and 147 days.
• Uneven implementation of federal legislation and differences in state fees drive the large variation in the cost to register property—from 7.7% of the property value in Yobe to 26.4% in Edo.
• Katsina remains the easiest place to enforce a contract within Nigeria: resolving a standardized commercial dispute takes 314 days and 41 procedures and costs 26% of the claim value.

According to EFIC most challenging global risks for the October 2014 are Chinese economic slowdown, political uncertainty in Thailand, ore export ban in the Philippines, minimum wage demands in Cambodia and Ebola spread in Africa.

China — Economic slowdown continues to deepen

Industrial production growth slowed to a five-year low of 6.9% (y/y) in August from 9% in July. Growth in fixed asset investment also slowed, though retail sales held up better.

The housing correction continues to be a serious drag, even as local governments continue to ease their housing restrictions and banks increase mortgage availability to home-buyers.

Thailand — When putsch comes to shove

Interim Prime Minister General Prayuth Cha-Ocha said on September 4 that he expects it will take at least a year to draft a new constitution – Thailand’s ‘own version of democracy’.

He also said he might not hold to the original timetable of elections in October 2015.

Philippines — Shock at ore export ban

A proposed ban on Philippine exports of unprocessed metal ores has caught the market unawares. The nickel price rose 7% in the four days after the announcement, and is up 22% since the start of the year, when Indonesia announced its own ban on nickel ore exports.

Cambodia — Pay demands not only economic challenge

Thousands of clothing industry workers from around 300 factories staged a Global Day of Action on September 18 to campaign for an increase in the minimum wage from US$100 to US$177 a month.

All parties – workers, foreign fashion buyers and the government – appear to be taking a more conciliatory approach to the current campaign than to a previous one in 2013, in which police shot dead four striking workers.

West Africa — Ebola economic cost could go either way

A World Bank analysis of the Ebola epidemic released last month finds that the economic costs could be limited if containment is swift.

Then again, if the virus continues to surge in the three worst-affected countries – Guinea, Liberia, and Sierra Leone – its economic impact could grow eight-fold, dealing a ‘potentially catastrophic blow’ to the already fragile states.

In Liberia, the hardest hit country, the GDP hit could be almost 12 percentage points in 2015. The analysis finds that the direct costs of the crisis – death, sickness,
nursing, and associated lost working days – aren’t the largest ones.

The largest cost is rather fear.

This leads people to shun one another and withhold their labour, which closes businesses and disrupts transport, including through sea and airports.

80-90% of the total economic impact of epidemics comes from fear, the Bank concludes after studying previous epidemics such as SARS in 2002-2004 and H1N1 flu in 2009.

Published on 03.October.2014 – Ex-Im Bank of United States provides a variety of financing options to US exporters, which includes working-capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.

In fiscal year 2013, Ex-Im Bank approved more than $27 billion in total authorizations.

On Manufacturing Day, Ex-Im Bank highlights two small manufacturing businesses that support 53 jobs due to Ex-Im support

Washington, D.C. – Export-Import Bank of the U.S. (Ex-Im Bank) financing has supported Measurement Technology Northwest Inc. (MTNW) and Engineered Compost Systems (ECS), as they expand their global footprint to five countries and make plans to hire new workers to fill export orders.

MTNW and ECS are two of thousands of small manufacturers that Ex-Im Bank equips to sell made-in-America goods overseas. In FY 2013 alone, Ex-Im Bank approved authorizations for U.S. manufacturing industries totaling $8.5 billion.

MTNW develops thermal testing equipment for textile and garment systems, and line control systems including winches used in oil and gas, commercial and oceanographic applications.

ECS designs large-scale compost systems, primarily for waste companies and municipalities. The companies employ a total of 53 people.

The companies purchased an Ex-Im Bank export credit insurance policy in 2013 and recorded $11 million in total sales the same year.

Exports accounted for approximately 50 percent of the sales, half of which in turn was underwritten by Ex-Im Bank. Both companies are owned by Seattle-based small-business exporter Tim O’Neill.

“Ex-Im Bank’s export credit insurance lends small-business exporters in Washington like MTNW and ECS peace of mind so they can enter new markets abroad and support jobs at home,” said Ex-Im Bank Chairman and President Fred P. Hochberg.

“The world wants to buy the quality and innovative manufactured goods you can only find here in America. Ex-Im Bank makes sure that more U.S. manufacturers can seize that opportunity to grow through exports.”

Thanks in large part to Ex-Im Bank, ECS recently landed a contract in Poland, and MTNW has enrolled new customers in Brazil, Indonesia, Singapore, and the U.A.E. The company hopes to increase staffing by 12 to 15 percent over the course of the year.

“Ex-Im Bank export credit insurance provides the security to accept important sales contracts that preserve the jobs of 20% of our work force,” said Tim O’Neill.

“As an experienced exporter, we appreciate the ability to pick which customers need to be insured instead of having to buy a blanket policy at a much higher overall cost on the private market. At the same time, our bank appreciates the fact that our riskiest customers are covered by credit insurance, thus making access to working capital that much easier.”

Export credit insurance enables companies to increase export sales by limiting their risk of non-payment by purchasing an insurance policy, just as someone limits their risk of fire by purchasing homeowners insurance.