Friedrich Plassmann SETF Moscow Commerzbank Eurasija Recent developments HERMES-covered Financing in Russia

Friedrich Plassmann SETF Moscow Commerzbank Eurasija

Recent developments

HERMES-covered Financing in Russia

2Friedrich Plassmann SETF Moscow St. Petersburg, April 28th 2014

1. Commerzbank in Russia

2. HERMES – Basic Scheme

3. Special Issues in Russia

Table of Content


Commerzbank AG at a glance

Commerzbank AG was founded in 1870 and is today based in Frankfurt am Main. With equity amounting to EUR 26.7 billion (as of 09/2013), Commerzbank is the second largest German private sector bank and has total assets of 593.2 billion (as of 09/2013).

Commerzbank in Germany has a network of 1,200 branches. Internationally, the Group’s core activities are concentrated primarily in Europe, with a particular focus on Central and Eastern Europe.

Some 54,000 employees, including 11,000 abroad, serve more than eleven million corporate, institutional and retail customers in more than fifty countries.

The bank has positioned itself as a creative partner for providing financial services to a number of different customer groups in corporate and institutional business.

Commerzbank has especially dedicated to serve Germany’s medium sized companies domestically and abroad.


Commerzbank AG in Russia

Subsidiary Commerzbank Eurasija SAO, 100% ShareholderCommerzbank AG for corporate clients

HQ in Moscow, Branch in St. Petersburg

Representative office since 1976 for correspondent banking

Subsidiary bank since 1993/ 1999 (DreBa/ CoBa)

Core Business – Corporate Clients

Employees: 150

2nd place among German banks in Russia*

10th place among international banks in Russia*

_________________

* In terms of capital, banki.ru, dec. 2012.

HQ in Moscow

Branch in St. Petersburg





Table of Content


HERMES-covered Buyer Credits Major features

flagship-product of HERMES

long-term credit to finance specific export transactions

generally HERMES provides coverage for 95% of all commercial and political risks, majority of the credit risk is therefore mitigated

at the same time payment security (for the supplier) and long-term financing (for the Buyer)

Pricing is below and tenors are beyond market terms

Major structures are corporate credits (Borrower = Importer = Corporate) and bank-to-bank credits (Borrower = Importers bank)


HERMES-covered Corporate CreditsContractual structure

ExporterImporter/Borrower

Commerzbank

ECA

Export cover

Export credit cover

Deliveries and related services

Export Contract

Loan Agreement

Repayment / Interest Payments

Disbursement of loan to fund supplies(in line with Russian FX-Control via Passport Accounts)


HERMES-covered Bank-to-Bank Credits Contractual structure

Disbursement of loan amounts pro ratadeliveries made /services rendered

Exporter

Commerzbank

Buyer

Buyer‘s local bank


Loan Agreement (Buyer Credit)


ECA

Deliveries and related services

Export Contract

Export cover

Export credit cover

Local LoanAgreement


HERMES-covered Corporate CreditsBenefits for Borrowers/Importers and Exporters

Borrower

Tenors beyond market terms (up to 10-12 years door-to-door), repayment structure closer to the amortisation of the asset financed

Repayment starts only upon finalisation of the respective export transaction, i.e. once commercial benefits of Borrowers investment can be realised

Pricing competitive as insurance premia from HERMES are below market prices

HERMES-covered financing does not walk away in financial crisis

HERMES offers additional risk taking capacity

Exporter

Financing tied to his supplies, therefore an advantage over competitors

Payment security comparable, though not equal, to a confirmed Letter of Credit

HERMES provides further risk mitigation in conjunction with a Buyer Credit (prefabrication risk, coverage for bonds)





Table of Content


Special Issues in RussiaCurrency Risks

Many companies buy abroad, but sell their final products locally

Long-term foreign currency loans are a long-term currency risk

HERMES is, in principle, ready to provide coverage in RuR

Commerzbank is able to provide long-term financing in RuR


Special Issues in Russia„Local“ Exporters

Many companies sell German products, but via local subsidiaries or distributors

Role of local intermediaries is to undertake customs, currency control related adminstration etc., final clients should not do that

Further it is easier to organise after-sales services with local companies

In principle HERMES does accept such structures, although it take sometimes a lot to explain it


Special Issues in RussiaCountry policy HERMES

Country policy is unchanged


Disclaimer

Structured Export & Trade Finance

This presentation has been prepared and issued by Commerzbank AG. This publication is intended for professional and institutional customers.

Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Commerzbank Group with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgement at this date and time, and are subject to change without notice. This presentation is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation.

Commerzbank AG and/or its subsidiaries and/or affiliates (herein described as Commerzbank Group) may use the information in this presentation prior to its publication to its customers. Commerzbank Group or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. Commerzbank Group may also provide banking or other advisory services to interested parties.

Commerzbank Group accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation.

Friedrich Plassmann SETF Moscow Commerzbank Eurasija

Friedrich PlassmannHead of Structured Export & Trade Finance, Commerzbank Eurasija SAO

Phone +7 495 / 651-60-33Fax +7 495 / 797-48-29Mobile +7 915 / 142-06-22Mail [email protected]

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Friedrich Plassmann SETF Moscow Commerzbank Eurasija Recent developments HERMES-covered Financing in Russia