SACE Guarantees for strategic
infrastructures & renewable energy
Bruxelles, 17th May 2011
SACE is the Export Credit Agency (ECA) of Italy, 100% owned by the
Ministry of Economy and Finance.
All SACE’s commitments are counter-guaranteed by the Italian
Government.
SACE does not lend funds but its products facilitate the raising of
finance.
Our mission
2
What we do
Traditional business
In order to support Italian exports
Export credit Insurance:
Political Risk Insurance:
New markets
In order to support internationalization of
Italian companies and initiatives of strategic
interest for the Italian Economy
Internationalisation:
Market Window:
“Non marketable” business, bound
by Consensus Rules
Non-internationally regulated
business aimed at supporting
Italian investments abroad
against political risks
New “marketable” business,
supporting the Internationalisation
of Italian Economy
New “marketable” business,
supporting initiatives of strategic
interest for the Italian Economy
3
4
Risks insured by geographical area (year end 2010)
SACE’s Oustanding Commitments: € 32.7 Bn
Italy
Ru
ss
ia &
CIS
Lati
n A
me
rica
Tu
rke
y &
Mid
dle
Ea
st
As
ia P
ac
ific
Ce
ntr
al &
Ea
ste
rn E
uro
pe
No
rth
Am
eri
ca
Su
b S
ah
ara
n A
fric
a
Oth
er
Co
un
trie
s
20% 16% 9% 7% 6% 4% 3% 2%
22%
Gu
lf S
tate
s
11%
to the BorrowersSACE’s support: key benefits
Zero Risk Weight : SACE guaranteed assets are 0% weighted under Basel I and under Basel II
(fully guaranteed by the Italian State)
Risk Partner: Acting as a risk taker SACE decreases syndication risks
Competitiveness: Longer term financings and, for export credit transactions, attractive all-in cost of
funding
Additional Capacity and Liquidity Provider: Preservation of current bank credit lines
Stability: Improvement of balance sheet composition (diversification of funding sources)
For the Banks
For the Borrower
5
Strategic sectors
Infrastructures
Expand the national and international transport system (e.g.
highway, airport, railway, maritime port )
Promote the diversification of energy sources (e.g. Lng terminals,
gas pipelines, gas storage, waste to energy plant)
Improve telecommunications networks
Renewable energy
Research and development
Production of machinery
Renewable power production plants
Energy efficiency investments
6
Main projects SACE in the Renewables and
Strategic Infrastructures sector 2008-2011
Helios
€ 25 mln
8 MW PV plant
2009
SunRay- Lazio
€ 26,5 mln
24MW PV Plant
2009
Campidano-Sardegna
€ 33 mln
70MW Wind Farm
2009
AES SOLAR
€ 28 mln
43 MW PV plant
2010
Falck
€ 22 mln
52MW Wind Farm
2008
Veronagest
€ 18 mln
16 MW PV plant
2010
SunRay- Lazio
€ 98,3 mln
52 MW PV Plant
2010
Falck
€ 27,6 mln
138 MW Wind Farm
2010
HFV
€ 17 mln
16 MW PV plant
2010
Helios
TRM-Torino
€ 130 mln
Waste to Energy Plant
2008
Moncada-Sicilia
€ 29 mln
Photovoltaic Modules Production Plant
2008
ASPI- Italia
€ 500 mln
Motorway
2010
SdP- Italia
€ 50 mln
Motorway
2011
Centostazioni-Italia
€ 7,5 mln
Railroad Station
2008
Renewables
Strategic
Infrastructures
7
8
How it works
8
SPV
BANK / POOL
Project /
Corporate Loan
First demand
guarantee
CONTRACTORS
USERS / PURCHASERSProject
contracts
Available to cover construction risk
Partial coverage of loan
Debt service type guarantee. Acceleration of guaranteed payment only at SACE option
Benefit of security package and loss-sharing mechanism on a pro-rata basis between SACE and the
lenders
Direct voting rights or power to influence guaranteed banks on decisions
Time of payment to SACE is aligned to lender remuneration (i.e. partially upfront and partially as risk
margin over the life of the guarantee in line with interest payments)
Reliance on same consultants with lenders; possible exception for intercreditor issues
The Andromeda transaction
Unconditional and irrevocable first demand guarantee provided by SACE to the Issuer on the PF-A1 (monoline style)
Covering nonpayment and claw back risk in respect of PF-A1 scheduled principal and interest
The payment obligations of SACE are valid irrespective of any invalidity, irregularity or
unenforceability of any of the guaranteed obligations
The guarantee does not cover the make-whole amount or any prepayment or acceleration
payment
SACE has the option but no obligation to accelerate the guaranteed obligations in case of an acceleration of the PF-A1
SACE (“Project Facility A1
Guarantor”)
P+I under Class
A1 and A2 Notes
Guaranteed
Amounts
P+I under PF-A1 and
PF-A2
Andromeda PV S.r.l
(“Borrower”)
Andromeda Finance S.r.l.
(“Issuer”)
EIB
Investors
Guaranteed
Amounts
9
10
to the BorrowersCompliance with state aid rules
credit analysis performed by SACE structures
Attribution of a specific rating to the borrower/project
Coverage of expected loss and expenses
calculation of “risk load”
Application of excess spread in order to achieve
target RAROC
Check market data for comparable transactions
Borrower/project financial soundness
Market oriented price
Compliance with 80% rule (exception for debt
securities)
Preference for balanced risk sharing with lenders
(on average 35% of whole lending amount)
Maximum coverage of outstanding loan
11
Risk assessment: Rating Models
Counterparty rating
Counterparty rating +
recovery rate adjustement
Transaction rating
Corporate
Bank
Project Finance
Structured
Finance
Type of RatingType of Risk
12
Pricing Model – Pricing to Risk
The transaction is
assigned a rating
Pricing
“Mark to Market”
The implicit PD is
estimated
=
Counterparty rating for unsecured risk
Transaction rating for secured risk
Fair Premium Level
is defined
For each rating and each tenor: it is
computed by the simple moving
average
13
Fair Premium Level
Expected Loss
Excess Spread
Expenses
Income from Capital
Capital Charge
+
+
+
-
(Exposure at default) * (Probability of
default) * (1 – Recovery Rate)
Running costs, human resources,
etc..
Level of Profitability
“Risk Load”
Risk Adjusted Performance Measure
RAROC - RARORAC
14
Spread data obtained from market providers
Italy
Head Office
Wo
rld
wid
e
RomePiazza Poli 37/42 - 00187 Rome
Tel. +39 06 67361 • Fax +39 06 6736225
BrazilAl. Min. Rocha Azevedo, 456 – CJTO 101
01410-000 Sao Paulo
Tel. +55 11 31712138 • Fax +55 11 32664051
China40/f Suite 4001 - Central Plaza 18
Harbour Road - Wanchai, Hong Kong
Tel. +852 36202323 • Fax +852 36210227
Romaniac/o ICE - Str. A.D. Xenopol, nr. 15 - Sector 1
010472 Bucharest
Tel. +40 21 2114240 • Fax +40 21 2100613
Russiac/o ICE - Office n.1202
Krasnopresnenskaja Naberejnaja 12
123610 Moscow
Tel. +7 49 52582155 • Fax +7 49 52582156
South AfricaTwo Commerce Square - 39, Rivonia Road
Corner Melville Road Sundhurst
2196 Sandton, Johannesburg
Tel. +27 11 2680623 • Fax +27 11 2680617
Turkeyc/o Consulate General of Italy in Istanbul
Tom Tom Kaptan Sokak, 15
34433 Beyoglu, Istanbul
Tel. +90 212 2458431 • Fax +90 212 2458430
How to contact us
www.sace.it
BariVia Amendola 172/5 - 70125 Bari
Tel. +39 080 5467763 • Fax +39 080 5467764
LuccaVia Dante Alighieri 167 - 55100 Lucca
Tel. +39 0583 40071 • Fax +39 0583 400790
MilanVia A. De Togni 2 - 20123 Milan
Tel. +39 02 4344991 • Fax +39 02 434499749
ModenaVia Elsa Morante 71 - 41123 Modena
Tel. +39 059 891240 • Fax +39 059 820832
Monzac/o Unione Industriali Monza e Brianza
Viale Petrarca 10 - 20010 Monza
Tel. +39 039 3638262 • Fax +39 039 3638208
RomePiazza Poli, 37/42 - 00187 Rome
Tel. +39 06 6736309 • Fax +39 06 6736770
Turinc/o ICE - Via Bogino 13 - 10123 Turin
Tel. +39 011 836128 • Fax +39 011 836425
VeniceViale Ancona 26 - 30172 Venice Mestre
Tel. +39 041 2905111 • Fax +39 041 2905103
15
16
Disclaimer
This presentation has been prepared solely for information purposes and should not 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 or has been
prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly,
SACE does not represent or warrant that the information is accurate and complete.
Disclaimer
Top Related