During 2016, no fewer than 24 Deutsche Bank trade finance deals completed in 2015 were recognised in the industry media’s clutch of Deals of the Year awards – all judged by panels of industry experts for innovation, social purpose, clever risk mitigation and continued support to trade.

As Daniel Schmand, global head of trade finance said at the time, “This recognition is testament to the professionalism and expertise within the teams and the ability to provide innovative financial solutions to our clients”.

Now that TFR has published its full list of winning deals for 2016 (with other media sector awards following on shortly), flow has taken the opportunity to share more detail about the Deutsche Bank transactions that stood out from the crowd.

The TFR Deals of the Year awards separate fully commercial deals (in other words those with no government or development finance institution underwriting) from export finance deals. Despite the impact of low commodity prices and sluggish trade growth, the flight to quality in 2016 stood out in the 120 deals that did come into the magazine, so for Deutsche Bank to win two in each category is a notable achievement.

Deutsche Bank AG, Amsterdam Branch and Societe Generale (nominating banks of this deal) together with ten other international banks acted as mandated lead arrangers and book runners for the US$3bn, seven-year hydrocarbon products pre-export financing facility (PXF) in favour of TCO. This is where a loan is made to a producer or exporter of commodities based on the value (price and quantity) of commodities to be sold and delivered to an eligible off-taker. Key to the structure is that the ultimate credit risk remains with the exporter, who must ensure that the size and timing of shipments are sufficient to meet the debt service requirements. Even if the off-taker defaults, the exporter is legally obliged to repay the loan.

In this deal, the PXF is secured by the export proceeds from TCO’s sales of crude oil, liquefied petroleum gas, and sulphur, all to be paid into offshore pledged collection accounts. In addition, TCO has unconditionally and irrevocably guaranteed all the repayment obligations. It was a landmark transaction for Kazakhstan, TCO and the PXF syndicate, and it was hardly surprising that the deal was oversubscribed well in excess of the borrower’s fundraising target.

Deployment of the PXF has paved the way for the successful return of TCO in the capital markets following its early bond issue in 2004 to fund its Sour Gas Injection/Second Generation Plan (SGI/SGP) project. With the PXF facility providing a strong backbone to the overall fundraising strategy, TCO went on to raise a successful eurobond in July 2016. Capital projects such as this one are big generators of Kazakh-supplied content, with SGI-SGP engaging more than 200 Kazakh companies and workers.

“Chevron’s 20-year Kazakh adventure continues with the quality of this oversubscribed PXF demonstrated by no fewer than 12 banks”

“I believe this deal deserves an award because of size and tenor, combined with the complexity that comes with working with some of the largest oil companies in a context of uncertainties around the oil price and impact on Kazakhstan”

Borrower: Tengizchevroil Finance Company International Ltd (TCO)
Nominated by: Deutsche Bank AG, Societe Generale
Region: Kazakhstan
Deal: Pre-export financing
Purpose: Part of a US$21.5bn capital expenditure financing package to allow TCO to further develop the Tengiz field and significantly increase its production
Signed: July 2016
Amount: U$3bn
Tenor: Five years with potential sixth and seventh year extensions

Participants: Banca IMI SpA, Bank of China Limited (senior MLA and bookrunners);  BTMU, Citibank, Deutsch Bank AG; HSBC Bank plc, ING Belgium SA, JP Morgan Chase Bank NA, Mizuho Bank Ltd, Societe Generale, SMBC, UniCredit Bank Austria AG (MLAs and bookrunners); Mizuho bank Ltd (facility agent).
Legal adviser: Latham Watkins LLP (lenders); Sullivan & Cromwell LLP (client)

When the wider three-project deal was first was first contemplated, there were no recent precedents or proxies in the market to determine market interest or pricing levels.

Deutsche Bank, in its role as coordinating initial mandated lead arranger (shared with HSBC and KfW Ipex-Bank) and coordinating bookrunner, arranged and syndicated the loans to 17 international banks. The loans were backed by Euler Hermes, the world’s largest trade-related credit insurer.

In addition, for the first time, Deutsche Bank assumed the role of environmental lead bank and managed a complex environmental and social project due diligence process.

“Although structured as a traditional ECA backed facility, these deals stand out because of a combination of size and the 15 year tenor, which are both impressive for a challenging credit such as Egypt”

Borrower: Egyptian Electricity Holding Company SAE
Nominated by: Deutsche Bank AG, Banco Santander SA
Region: Egypt
Deal: Export finance
Purpose: To finance 85% of the Siemens AG contract value and 85% of the Euler Hermes premium amount in respect of the construction of a 4,400MW combined cycle power plant project (CCPP). The individual project costs of Burullus and New capital are €2bn each, including the Siemens element of around €1.2bn in each one.
Signed: March 2016
Amount: €1.16bn (Burullus), €1.19bn (New Capital)
Tenor: 15 (3+12) years

Participants: Deutsche Bank AG, HSBC Group, and KfW Ipex-Bank (CIMLAs); Banco Santander SA; Crédit Agricole CIB Paris; Commerzbank; ING Bank; JP Morgan Chase Bank; Landesbank Baden-Württemberg; UniCredit Bank AG; Societe Generale (MLAs); AKA Ausführkredit-Gesellschaft mbH; Bayerische Landesbank; BNP Paribas Fortis; DZ BANK Deutsche Zentralgenossenschaftsbank; Heleba Landesbank Hessen-Thüringen Girozentrale (lead arrangers); IKB Deutche Industriebank AG (arranger)

Facility agent: KFW Ipex-Bank
ECA: Euler Hermes
Contractors: Siemens, Orascom Construction
Legal adviser: Allen & Overy

Deutsche Bank, the mandated lead arranger (MLA), structuring bank and facility agent arranged an eight-year US$75m buyer’s credit, with Bankmed – a Dubai International Financial Center based branch of the Lebanese bank Bankmed SAL – as co-MLA and co-lender in support of the GE contract and backed by Coface, the French export credit agency.

The buyer’s credit was part of a broader financing package also consisting of a US$ 30m five-year loans provide by GE, the gas turbine manufacturer. Dubai-based CT&F was financial adviser to Qaiwan on the entire financing package.

It attracted the attention of the judges because of four firsts: the first Coface-supported loan, the first senior unsecured loan obtained by a local corporate and the first GE vendor financing in Iraqi Kurdistan – and it is the first corporate debt for Qaiwan Group.

Furthermore the financing was transformational – it enabled Qaiwan to start the construction of the power plant before obtaining the financing, and refinanced Quaiwan while the power plant was reaching completion at the start of 2016.

"These transactions underscore Qaiwan Group's position as a model firm, operating with transparency and accountability, and one with robust operations. It also indicates that our growth strategy is one that engenders confidence from the international community," said Hasan.

"This is the ECA doing exactly what it should be doing. Helping banks go to places where they normally would fear to tread. Iraqi Kurdistan region deals are rare because they are difficult. Among the few transactions that have closed this year in Kurdistan, this one stands out because of its size and private nature of the borrower”

Borrower: Qaiwan Company for Construction and Electrical Construction:  (Qaiwan)
Nominated by: Deutsche Bank AG
Region: Iraqi Kurdistan region
Deal: Export finance
Purpose: To co-finance a US$75m Coface-backed loan for the supply of four model 9E gas turbines to the Bazian simple cycle power plant in Kurdistan.
Signed: January 2016
Amount: €75m
Tenor: Eight years

Participants: Deutsche Bank AG (MLA, structuring bank and facility agent); Bankmed Dubai (MLA, lender)

Facility agent: KFW Ipex-Bank
ECA: Coface
Contractors: General Electric

Note that John MacNamara, Global Head of Structured Commodity Trade Finance and one of the judges of these awards (along with representatives from Citibank, Societe Generale and the law firm Clyde & Co), will be speaking at the TFR Cross-border Trade Forum 2017 where these awards will be presented on 9 March 2017 in London, UK.