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Project and Export Finance

Tailored funding for capital projects

Capture opportunities driven by infrastructure spend and economic growth, and emerging market-related cross-border flows with the HSBC Project and Export Finance team. We provide services in project finance, export finance and global specialised finance.

Project Finance

HSBC's Project Finance team is a leading global adviser and arranger of limited recourse project financings.

What is project finance?

  • Project finance is the medium- to long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors
  • The predominant sectors for project finance are oil and gas, petrochemicals, mining, power, transportation and telecommunications
  • A typical project financing structure would involve one or more sponsors (equity investors in the project company) as well as a debt package provided to the project company by a syndicate of banks and/or capital markets and/or other sources of debt
  • The debt is secured by the project assets and repaid from project cash flow with only limited recourse to the project sponsors
  • In recent years, project financing techniques have been used to develop public-private partnerships (PPPs) and the UK Private Finance Initiative (PFI)
  • Due to the complexity of project finance structures, most project sponsors engage specialist financial advisers such as HSBC to develop a credit-worthy and bankable financial structure for the project. One of the key tasks of the project finance adviser is the identification and allocation of project risks

Download this Project Finance publication by James Wright and David Gardner to learn more.

HSBC's award-winning Project Finance team

  • HSBC has one of the most recognised project finance teams globally, having won the marquee Euromoney Award for Best Project Finance House for 2011 and the Financial Times' The Banker Award for Best Project Finance House for three years running (2009, 2010 and 2011)
  • The team has four regional hubs in the Americas, Europe, the Middle East and Asia
  • At any one time, HSBC's Project Finance team is actively involved in more than 100 advisory and lending mandates
  • HSBC's Project Finance team is able to provide consistent value-added solutions through its roles as Financial Adviser, Mandated Lead Arranger and Project Bond Bookrunner on some of the world's most complex and large-scale projects
  • HSBC's Project Finance team works in close cooperation with HSBC's Resource and Energy Group, Leveraged Finance, Export Finance, Debt Capital Markets and Principal Investments teams to provide a comprehensive service to its clients
  • HSBC leads its competitors and consistently delivers innovative solutions for its clients. This is evidenced by the team having won over 42 awards globally during the last 12 months (as at October 2011), including 12 House Bank and 30 Deal of the Year awards:
    • The Banker – Most Innovative Investment Bank in Infrastructure and Project Finance – 2009, 2010 and 2011
    • Euromoney – Best Global Project Finance House 2011; Best Asian Project Finance House 2011
    • EMEAFinance – Best Project Finance House 2010; Best Project Finance and Advisory House – 2008, 2009 and 2010
    • Project Finance International – Best East and African Bank of the Year – 2010
    • The Asset – Best Project Finance House, Asian Awards – 2008 and 2010
    • Multiple Deal of the Year Awards in 2010 for projects including:
      • 03b Networks – a greenfield satellite project for emerging markets
      • Singapore Sports Hub – a PPP financing of a sports stadium and retail park in Singapore
      • Odebrecht – USD1.5 billion project bond for drill ship charted by Petrobras in Brazil
      • SATORP – USD8.5 billion petrochemical project, the largest project financing in Jubail, Saudi Arabia

Export Finance

HSBC's Export Finance team is a global leader in arranging Export Credit Agency-supported finance.

What is Export Credit Agency finance?

  • It is medium- to long-term financing provided to corporates, governments and project companies to finance the import of capital goods and services, eg equipment for a power station, railway line, telecoms network, etc
  • Export Credit Agencies are government-backed agencies created to support their countries' exports; an ECA typically provides a guarantee or insurance policy to a commercial bank (eg HSBC) for a loan provided to the buyer of the goods
  • Export Credit Agency facilities can be denominated in all major currencies and, in certain cases, can also be denominated in local currency
  • Most of the major Export Credit Agencies conform to a common set of guidelines and characteristics known as the 'OECD Consensus', which govern criteria such as financing tenors, repayment terms, grace periods, minimum insurance premia, percentages of financing, etc

Advantages of Export Credit Agency finance

  • Availability – often available to borrowers when other sources of finance are not; this is particularly true in volatile market conditions
  • Tenor – the total loan horizons tend to be longer than commercial loans, ranging from 5 years to 14 years post-delivery/construction depending upon the nature of the contract to be financed
  • Low all-in costs – all-in pricing, comprising interest rates, Export Credit Agency insurance premia and other costs, are highly competitive
  • Funding diversification – uses a very small percentage of the borrower's credit lines (typically five per cent) or sometimes none at all, leaving those lines available for other financings
  • Attractive fixed interest rates – Export Credit Agency-supported fixed interest rates (CIRRs), where available, typically cost less than commercially arranged fixed-rate facilities

HSBC's Export Finance team

  • One of the largest export finance teams of any bank, with offices throughout the world and excellent relationships with all the major Export Credit Agency
  • A global leader in export finance – currently ranked no.1 in Dealogic's League Table of Global ECA Arrangers (Q3 2011) and consistently ranked in the top 5 annually
  • An award-winning Export Finance team – 13 Deal of the Year Awards in 2010 from the three leading trade finance publications: Global Trade Review, Trade Finance magazine and Trade and Forfaiting Review
  • An innovative Export Finance team with a number of firsts:
    • First Export Credit Agency loans on a project-risk basis – Philippine power plant
    • First tripartite multi-sourced Export Credit Agency deal – Malaysian power plant
    • First Export Credit Agency facility on an Islamic structure – Yemeni telecommunications project
    • First Export Credit Agency wrapped bond issue for Mexican borrower – Pemex Samurai bond
    • First ruble-denominated Export Credit Agency facility – Russian telecommunications project
    • First-ever Export Credit Agency structure devised to finance Bus Rapid Transit Systems throughout the world

Export Finance awards – 2010-2011

GTR Best Deals of 2010 Rea Vaya, South Africa
Deal of the Year by Global Trade Review and Trade Finance
Mandated Lead Arranger
TAAG, Angola
Deal of the Year by Global Trade Review
Mandated Lead Arranger
Trade Finance Deal of the Year 2010 ERC, Egypt
Deal of the Year by Global Trade Review
Mandated Lead Arranger
Telkom, South Africa
Deal of the Year by Global Trade Review, Trade & Forfaiting Review and Trade Finance
Mandated Lead Arranger
TNF Deals of the Year 2010 EMAL, UAE
Deal of the Year by Trade Finance
Mandated Lead Arranger
Telkomsel, Malaysia
Deal of the Year by Trade Finance
Mandated Lead Arranger
GTR Asia Leaders in Trade Awards 2011 O3b Networks
Deal of the Year by Trade Finance
Mandated Lead Arranger
Deal of the Year by Trade Finance
Mandated Lead Arranger
  Yeong Yang Wind Park
Deal of the Year by Trade Finance
Mandated Lead Arranger
  Air China Ltd
Deal of the Year by Trade & Forfaiting Review and Airfinance Journal
Mandated Lead Arranger
  Best Export Finance Arranger in Asia-Pacific by Global Trade Review

Global Specialised Finance

HSBC's Global Specialised Finance team is a leading arranger/provider of large-ticket and/or medium-term commercial trade finance ancillary to the Export Credit Agency-supported facilities arranged by HSBC's Export Finance team.

What is global specialised finance?

  • Global specialised finance provides large-value and/or medium-long term financing principally targeting emerging or developing market financial institutions or government (including quasi-sovereign) imports of capital goods or services complementary to Export Credit Agency-supported corporate trade finance
  • Buyer credit financing underwritten by our operations are typically secured by documentary letters of credit, stand-by guarantees, bills of exchange/promissory notes and framework loan agreements
  • A centralised portfolio risk management discipline is maintained to avoid credit or political concentration risk supported by high-calibre, experienced syndication expertise
  • Our trade facilities can be denominated in all major/transferable currencies and provide flexible financing (including local costs) terms without Export Credit Agency sourcing restrictions or criteria

Advantages of global specialised finance

  • Availability of flexible large-value and/or medium-term financing complimentary to HSBC Export Finance's cross-border financing capabilities in developing markets
  • A strong portfolio management discipline and market-driven risk/pricing analysis provides added security for self-liquidating cross-border trade obligations, which typically receive priority payment status by emerging market governments
  • Provides comprehensive financing and risk management solutions for importers and exporters drawing on HSBC Group worldwide experience and market knowledge
  • Exporter funding diversification – our buyer credit trade finance facilities do not typically impact exporter lines of credit, which remain available for other working capital purposes
  • Attractive floating or fixed interest rate facilities available in major currencies

HSBC's Global Specialised Finance team

  • HSBC Global Specialised Finance is centrally managed in London (Europe, CIS and Africa), supported by high-calibre, skilled origination personnel in New York (Americas), Dubai (MENA) and Hong Kong (Asia) alongside HSBC's significant Export Credit Agency presence globally
  • HSBC is a global leader in trade and export finance, and our expertise is consistently recognised by our clients and deal/industry awards for commitment to highest levels of service and innovation
  • Some recent deals which highlight our expertise in arranging complementary facilities to Export Credit Agency facilities include:
    • TAAG Airlines, Angola – underwriting and syndication of USD78 million, five-year commercial tranche (guaranteed by the Ministry of Finance Angola) for TAAG's purchase of a Boeing 777-300ER aircraft. This was arranged in conjunction with the USD255 million US export-import supported facility arranged by HSBC as sole Mandated Lead Arranger
    • Vnesheconombank (VEB) Russia – underwriting and syndication of a USD49.6 million, seven-year commercial facility to finance the downpayment on the import of breeding cattle by VEB's client, Bryansk Meatworks, from Australia. The remainder of the contract was financed by a USD39.7 million Australian export credit facility arranged by HSBC as sole Mandated Lead Arranger.
    • Union Bank of Nigeria – USD95 million pre-delivery finance for an Airbus, to be refinanced by HSBC Export Finance