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SACE and the shipping finance: new financing solutionsNaples, 3 rd October 2013

SACE and the shipping finance: new financing solutionsNaples, 3 rd October 2013

2

SACE and shipping industry

SACE’s support to shipowners

Appendix

Introduction3

SACE’s support to shipyards

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8

13

16

SACE and the shipping finance: new financing solutions

Overview

SACE and the shipping finance: new financing solutions 3

MARKET

� Cargo demand shortage� Oversupply� Freight rate slump� Decrease value and price of

newbuilding� Scrapping increase� Fall in the volume of shipbuilding

orders

BANKS

� Scarcity of bankfinancing

� Less risk appetite

� Increasing cost of funding

� Reduction LTV (≤70%) � Overcollateralization

Fro

m

Sep

tem

ber2

008

Introduction

� New structures in financing (joint venture, bond, leasing)

� New players (private equity funds, ECAs)

Peak cargo owner’s risk

Peak shipowner’s riskFre

ight

rate

pai

dby

shi

pper

Time

TODAY?

4

Company profile and history

Factoring and discounting of credit with the public sectorShort-term credit insurance, sureties and construction risks

Data acquisition and credit recovery

Export credit, credit insurance, investment protection, sureties, reinsurance, financial guarantees, project & structured finance

100%100%

SpA

History1977 2004 2005 2008 2010 2012

Establishment of SACE as public entity under the surveillance of the Italian Ministry of Economy & Finance (MEF)

SACE enters the short-term credit insurance market through the establishment of SACE BT

SACE enters the surety market through the acquisition of ASSEDILE

SACE BT creates SACE Servizi, specialised in business info and recovery solutions

SACE BT enters the factoring market through SACE Fct

SACE enters CDP Group

SACE is transformed into a

joint stock company, whose

capital is wholly owned by MEF


Introduction

5

We support companies’ competitiveness

Over 30 years of providing risk management solutions

EXPERIENCE

€ 6.2 billion Shareholders’ equity and A- credit rating

(Fitch)

FINANCIAL SOUNDNESS

With SMEs and large corporations in 189

countries

FLEXIBILITY

We offer solutions for theintegrated management

of commercial and political risks

� Export credit and project finance� Protection of foreign investments� Financial guarantees� Credit insurance� Surety and construction risks� Factoring

Introduction


Our products

Export credit and project financeExporting at favourable payment terms?

Protection of foreign investmentLooking to invest in high-risk countries?

Financial guaranteesDifficulty getting access to domestic credit?

Credit insuranceNeed to grant extended payment terms?

Sureties and construction risksBidding for contracts in Italy and abroad?

FactoringNeed to unfreeze credits?

6

Introduction


Shipping risk backed by SACE

As of 30th Jun 2013, SACE’s exposure to shipping industry, amounted to,approximately, € 2,8 Bn.


7

8,8%

17,7%

2,0%0,8%

0,4%

70,4%

RORO SPECIAL VESSEL PRODUCT TANKERLNG BULK CONTAINER CROCIERISTICO


Buy a ship

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SACE supports entire ship life cycle with customized solutions



Our products to supportshipping industry

SACE S.p.A. – Corporate Presentation

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ORDERING BUILDING USINGShip life cycle

BUYER CREDITGuarantees on loans granted by banksto foreign borrowers in ordered tofinance Italian ship orders

SURETY� Guarantees covering contractual and legal

obligations (bid bonds, performance bonds, advance payment bonds, retention money bonds), for transactions in Italy and abroad

SUPPLIER CREDIT POLICY � To hedge the risk of unfair bond calling and

the production risk - i.e. orders revocation

POLITICAL RISK INSURANCE

To safeguard shipowner from thefinancial implications of politicalturmoil in developing countries,protecting vessel overseas.

FINANCIAL GUARANTEE

Guarantees on loans granted by banks inorder to finance vessel price

SACE PRODUCTS TO SUPPORT ITALIAN SHIPYARDS

SACE PRODUCTS TO SUPPORT ITALIAN SHIPOWNERS

SHIPOWNER SHIPYARD



Financial guarantees

10


ITALIANSHIPOWNER

SHIPYARD

Guarantee

loan

price

vessel

Bank orExport Credit

Agency

How to make access to credit easier

SACE covers loans (pre and post delivery) for purchase of vessels to use abroador to cover requirements for working capital in connection with internationalcontracts

SHIPOWNER SHIPYARD



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Main features


• SACE guarantee is at first demand, irrevocable, unconditioned in favour ofthe financing bank

• SACE’s support is fully backed by the Italian Republic guarantee

• Risk sharing with the financing bank which is covered up to 80% of theloan, with respect to non-payment risk of principal and interest*.

• Payment of SACE Premium: retrocession (on a running basis) - from thefinancing bank to SACE or possibility to have upfront payment.

*Interests coverage capped at bank funding costs

SHIPOWNER SHIPYARD


Why SACE: Main advantages


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For the financing bank

� Loan non-reimbursement risk sharing

� Zero-weighting of the quota guaranteed by SACE (considered as fully backed by the ItalianRepublic) under Basel II-III calculation of regulatory capital ratios

� With SACE guarantee, the bank is more likely to grant you a medium/long-term financing forhuger amounts

For the financed company

� Possibility to finance: � Foreign investments carried out by Italian companies� The working capital needs related to foreign purchasers’ orders� Investments realised in Italy aimed at enhancing companies competitiveness and their

internationalisation process.� Saving, for the portion of loan guaranteed by SACE, of the company’s credit line with banking

and insurance system� Possibility to have access to longer-term loans� Possibility to replace pool loans with bilateral loans, reducing structural costs for the company


SHIPOWNER SHIPYARD


Political Risk Insurance “PRI”

SACE covers the risk of so called "ship loss" due to political events. In detail SACE can cover losses due to: (i) expropriation acts (expropriation, confiscation, requisition, nationalization of the asset), (ii) war and civil unrest.

The PRI may be included in security package of shipping financing transactions by insurance rights’ assignment to lenders

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Vessel abroad

Political risks coverage

SHIPOWNER SHIPYARD



Surety

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SACE covers contractual obligations (bid bonds, performance bonds, advance payment bonds, etc.) and performance of legal obligations (tax bonds, custom bonds, etc.), in connection to contracts undertaken in Italy and abroad

Direct issue

FOREIGNSHIPOWNER

ITALIAN SHIPYARD

Paym

ent

Bond issue

Vessel

Request for bond issue

Cover risk of unduecalling of bond

FOREIGNSHIPOWNER

ITALIAN SHIPYARD

ITALIAN OR FOREIGN

BANK

Vessel

Paym

ent

Bond issue

Cover risk of undue calling of bond

Request for bond issue

Bank guarantee


SHIPOWNER SHIPYARD


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Supplier Credit Policy

Supplier Credit Policy provides coverage to unfair calling of bonds and risk of order’s revocation of exported goods.

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FOREIGN SHIPOWNER

ITALIAN SHIPYARD

Risk of order’srevocation

vese

l

FOREIGNSHIPOWNER

ITALIAN SHIPYARD

Risk of undue calling of bonds

Issu

ebo

nd

SHIPOWNER SHIPYARD



Buyer Credit

SACE guarantees loans to foreign shipowners for the purchase of made in Italy ships

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FOREIGNSHIPOWNER

ITALIAN SHIPYARD

Guarantee

Loan

price

vessel

ITALIAN OR FOREIGN

BANK


SHIPOWNER SHIPYARD


Cooperations

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Appendix

SACE cooperates with major trade associations and global financial players, with Simest, ABI e CDP: EXPORT BANCA


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Our sales network

� 4 branches and 8 offices� 51 agents*� 121 brokers*

� 8 representative offices serving the emerging economies

Sao Paulo

Johannesburg

Hong Kong

Moscow

We support enterprises looking to go far

* Credit insurance, surety and construction risk businesses only

Italian network Overseas network

Rome

Venice

ModenaMilan

Turin

Lucca

Bari

Monza

IstanbulBucharest

Verona

Mumbai

FlorencePesaro

Brescia

Mexico City

Appendix


Head office

Domestic branches Representative offices

RomePiazza Poli 37/42 • 00187 RomeTel +39 06 67361Fax +39 06 6736225

BucharestStr. Icoanei nr. 15, 3rd floor, sector 2 010472 BucharestTel +40 21 2102183 - Fax +40 21 2100613

IstanbulSüzer Plaza Askerocağı Cad. 9 K.21 Apt.02 Elmadağ Şişli - 34367 Istanbul Tel. +902122458430/1 - Fax. +902122458432

Hong Kong40/f Suite 4001 - Central Plaza 18Harbour Road - Wanchai, Hong KongTel +852 36202323 - Fax +852 36210227

JohannesburgBuilding 3, No 4 Karen Street, Bryanston, JohannesburgTel +27 011 4635131 - Fax +27 11 2680617

MoscowKrasnopresnenskaja Naberejnaja, 12123610 Moscow - Office n.1202Tel +7 49 52582155 - Fax +7 49 52582156

Mumbai84, Maker Chamber VIBackbay Reclamation, Nariman Point - 400 021, MumbaiTel +91 22 43473473 - Fax +91 22 43473477

Sao PauloAl. Ministro Rocha Azevedo, 456 - cjto. 101 Edificio Jau Cerqueira César - 01410-000 - São PauloTel +55 11 31712138 - Fax +55 11 32664051

Customer care

+39 06 [email protected]

WWW.SACE.IT

BariVia Amendola, 172/5 • 70126 BariTel +39 080 5467763 - Fax +39 080 5467764

BresciaVia Cefalonia, 60 • 20124 BresciaTel +39 030 2292259

FlorenceVia Lucchese, 84/c • 50019 Sesto Fiorentino (FI)Tel +39 055 536571 - Fax +39 055 5365600

LuccaVia Dante Alighieri, 167 • 55100 LuccaTel +39 0583 40071 - Fax +39 0583 400790

MilanVia A. De Togni, 2 • 20123 MilanoTel +39 02 434499701 - Fax +39 02 434499749

ModenaVia Elsa Morante, 71 • 41100 ModenaTel +39 059 891240 - Fax +39 059 820832

MonzaVia Damiano Chiesa, 3 • 20052 MonzaTel +39 039 3638247 - Fax +39 039 3638208

PesaroVia Cattaneo, 34 • 61100 Pesaro Tel. +39 0721 383229

RomePiazza Poli, 37/42 • 00187 RomeTel +39 06 6736309 - Fax +39 06 6736770

TurinVia Bogino, 13 • 10100 TurinTel +39 011 836128 - Fax +39 011 836425

VeniceVia Torino, 105 • 30172 VeniceTel +39 041 2905111 - Fax +39 041 2905103

VeronaPiazza della Cittadella, 12 • 37122 VeronaTel +39 045 8099460 - Fax +39 045 8041656

Appendix

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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.

Appendix


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