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Euromoneys 10th Anniversary Syndicated Loans Conference London, 12 March 2008 Stefania Berla Global

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'Korea Investment Corporation is buying $2 billion worth of new preferred shares ... 'Indian firm Tata Steel has won the battle against Brazilian CSN to take over ... – PowerPoint PPT presentation

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Title: Euromoneys 10th Anniversary Syndicated Loans Conference London, 12 March 2008 Stefania Berla Global


1
Euromoneys 10th Anniversary Syndicated Loans
ConferenceLondon, 12 March 2008Stefania
BerlaGlobal Head of Syndications, IFC
2
Emerging Headlines
  • The Abu Dhabi Investment Authority invest 7.5
    billion in Citigroup, offering the needed capital
    to offset big losses from sub-prime mortgages
    Wall Street Journal (11/27/2007)
  • Korea Investment Corporation is buying 2
    billion worth of new preferred shares in Merrill
    Lynch Financial Times (12/03/2007)
  • Grameen Bank from Bangladesh comes to USA with
    microfinance projects in New York and Texas New
    York Times, (12/12/2007)
  • Sovereign wealth funds save Wall Street
    Financial Times (01/24/2008)
  • Indian firm Tata Steel has won the battle
    against Brazilian CSN to take over Anglo-Dutch
    steelmaker Corus with an offer of 11.3bn BBC
    News (01/31/2007)
  • Brazilian Vale (CVRD) has secured about 50
    billion in financing to take over Xstrata,
    Anglo-Swiss miner LatinFinance (02/14/2008)
  • The Emerging Investors are coming ?

3
Contents
  • Evolution of Emerging Market Flows
  • Emerging Market Syndications
  • IFCs Experience

4
The Global Economy Real GDP Growth
  • Some decline is expected due to
  • US/Western Europe economies slowing down
  • Infrastructure constraints
  • Decrease in Commodity Prices


Emerging Markets growth rates have consistently
outpaced OECDs rates
12
10
8
6
4
2
0
2003
2004
2005
2006
2007
2008 E
2009 E
2010 E
2011 E
2012 E
OECD
Non-OECD
Source Economist Intelligence Unit 2/2008
5
FDI Inflows, Global and by Group of Economies,
1980-2007
EMs are attracting more capital
(Billion of dollars)
22 EMs
US bn
World total
1400
Emerging economies
1200
25 EMs
1000
Developed economies
800
South-East Europe and CIS
600
400
200
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2005
2007
Source UNCTAD, based on its FDI/NTC database
6
Total Net Inflows to EMs, by Type of Flow
1990-2007
Commercial Banks play an increasing role
US bn
Source UNCTAD, based on World Bank 2006 and The
Institute of International Finance
7
FDI Outflows from Developing Countries 2001 -
2006
EMs increasingly becoming significant
international investors
Source UNCTAD
8
Cross-Border MA Activity with Buyer from EMs
And Global Players
of total
US bn
Source UNCTAD
9
Main benefits gained by developing-country from
investing abroad results of the UNCTAD global
survey, 2006

Source UNCTAD global survey
10
The Credit Evolution of EM Sovereign Debt, 1997
vs 2007
Reflecting stronger credit fundamentals
100
52
80
92
60
40
48
20
8
0
1997
2007
Investment Grade
Sub-Investment Grade
Source Citigroup
11
Contents
  • Evolution of Emerging Market Flows
  • Emerging Market Syndications
  • IFCs Experience

12
EM Banks Participation in Cross-Borders
Syndications
Participating more in international syndications.
US bn
Source Dealogic 2/2008
13
Banks Participation in EM Loans, by Nationality
And becoming more active in EM Syndications
US bn
45
40
35
30
25
20
15
10
5
0
India
China
Taiwan
United Arab Emirates
South Korea
South Africa
Brazil
Total
2007
2003
2005
Source Dealogic 2/2008
14
Banks Investments in EMs Outside Own Markets
As well as increasing SouthSouth activity
100
90
80
70
60
50
40
30
20
10
0
United Arab Emirates
India
China
Taiwan
South
South
Brazil
Total
Korea
Africa
Ratio of Investments/Total Value
2003
2005
2007
Source Dealogic 2/2008
15
EM Borrowers with Participation from EM Lenders
EM banks are increasingly active in South-South
lending, but amounts are still limited.
Syndications
Total Number of Deals
Total Value () (m)
Source Dealogic 2/2008
16
Contents
  • Evolution of Emerging Market Flows
  • Emerging Market Syndications
  • IFCs Experience

17
IFC Evolution of EM Participants 2005-2007
IFCs experience is consistent with market trends

25
25
20
20
15
15
10
10
5
5
0
0
2005
2006
2007
Number
of Total
Source IFC Syndications 3/2008
18
IFC Case Study Eleme Petrochemicals
Borrower Eleme Petrochemicals Nigeria.
Sponsor Indorama International Finance
UK/Indonesia Project US 162 m Acquisition
Finance Financing A Loan US 50m B Loan US
80m Terms 7 years (25) LIBOR 500
Participants
Source IFC Syndications 3/2008
19
Limitations to Further Growth
  • EM Banks cost of funding is still relatively
    high
  • Limited international experience
  • Few clients engaging in South-South investments,
    but changing
  • Regulation constraints Basel II
  • No real momentum yet

20
Thank you www.ifc.org/syndications
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