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ECA ACTIVITY IN THE AVIATION SECTOR
15/03/2018 FILE 2018017
© Watson Farley & Williams 2018
Export credit agencies
THE ROLE OF THE ECAS
• The essential premise
• Full range of sectors supported– Ships– Aircraft– Rail– Projects
• Different and changing remits– EDC– Coface (now Bpifrance Assurance Export)– ECGD / UKEF
Slide 2
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Export credit agencies
Slide 3
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Various means of supporting exports
• Guarantees
• Insurance
• Direct lending
• Direct or indirect support to the capital markets– Covered bonds (French SCF etc.)– True capital market deals
• Innovation
Slide 4
© Watson Farley & Williams 2018
The international framework within which the ECAs operate
• Gentleman’s agreement• Level playing field• Detailed set of rules• Particularly strict since 2011 ASU• Criteria re. calculation of fees• “Home Country Rule” (limited exceptions)
OECD Arrangement and the Aircraft Sector Understanding
http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?doclanguage=en&cote=tad/pg(2018)1
© Watson Farley & Williams 2018
Recent developments
• European ECAs– Standardised documents / panel of law firm advisers– Fronting / reinsurance
• Coface / Bpifrance Assurance Export– Insurance (95%) and guarantee (100%)– Expanded scope of guarantee– Increasingly broad range of products (innovation)– Recent move to Bpifrance (December 2016)
• Export Credits Guarantee Department– Changes to its enabling legislation
COFACE / BPIAE and other European ECAs
Slide 6
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Other recent developments affecting all ECAs
• Cost of ECA finance (2011 ASU)• Competitive commercial finance• The rise of the lessors– Credit ratings (unsecured finance)– Access to the capital markets
Slide 7
© Watson Farley & Williams 2018
Most recent developments affecting ECA activity
EX-IM BANK• Delta case• US government shutdowns• Missing board member(s)
EUROPEAN ECAS
• Airbus bribery allegations • Airbus’ use of brokers (self-reporting)• Aircraft, helicopters and satellites
Slide 8
© Watson Farley & Williams 2018
Increased interest from the private insurance market
• Investment in longer-dated products– Private placement– Schuldschein
• Residual value insurance
• Development of AFIC by Marsh for Boeing aircraft
• Possible development of innovative AFIC-style support for Airbus aircraft
Slide 9
© Watson Farley & Williams 2018
Global Aviation Partners
Slide 10
Contact us
Charles ViggersParis Office
+33 1 76 40 15 [email protected]
Rex RosalesLondon Office
+44 20 7863 [email protected]
Siva SubramaniamSingapore Office
+65 6551 [email protected]
Jahnavi RamachandranLondon Office
+44 20 7863 [email protected]
Jonathan MullenderMunich Office
+49 89 237086 [email protected]
Samuel KolehmainenSingapore Office
+65 6551 [email protected]
Louise MorLondon Office
+44 20 7814 [email protected]
Oliver TebbitDubai Office
+971 4 278 [email protected]
© Watson Farley & Williams 2018Publication code number: 61557942V1 © Watson Farley & Williams 2018
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Slide 11
All references to ‘Watson Farley & Williams’ and ‘the firm’ in this presentation mean Watson Farley & Williams LLP and/or its Affiliated Undertakings. Any reference to a ‘partner’ means a member of Watson Farley & Williams LLP, or a member or partner in a WFW Affiliated Entity, or an employee or consultant
with equivalent standing and qualification. This presentation constitutes attorney advertising.
© Watson Farley & Williams 2018
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