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Overview of the Overseas Private Investment Corporation (“OPIC”). April 27, 2006. Mission Statement.

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Mission Statement (“OPIC”)

“OPIC's mission is to mobilize and facilitate the participation of United States private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from non-market to market economies. In accomplishing its mission, OPIC will promote positive U.S. effects and host country developmental effects. OPIC will assure that the projects it supports are consistent with sound environmental and worker rights standards. In conducting its programs, OPIC will also take into account guidance from the Administration and Congress on a country’s observance of, and respect for, human rights. In accomplishing its mission, OPIC will operate on a self-sustaining basis.”

  • Public Ownership: Overseas Private Investment Corporation (OPIC) is a self sustaining U.S. government corporation. OPIC’s obligations are backed by the full faith and credit of the US government.

  • Activity: Public investment insurance agency. OPIC is not an export credit agency; therefore its programs are not tied to the export of US goods.

  • Geographic cover: OPIC is involved in 150 countries.

  • Self-Sustaining: Recorded a net income of $163 million in 2004 with reserves greater than $5.9 billion.


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The Overseas Private Investment Corporation (“OPIC”) is an agency of the United States of America.

OPIC’s programs are backed by the full faith and credit of the United States government.

OPIC Overview

OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide.

  • Over the agency’s 30-year history, OPIC has supported US$ 164 billion worth of investments that have helped developing countries generate over US$13 billion in host-government revenues and created more than 732,000 host-country jobs.

  • OPIC’s Political Risk Insurance and financing helps mobilize and facilitate the participation of U.S. private capital in the economic and social development of transitional economies by assisting U.S. Investors (including eligible U.S. financial institutions) through four principal activities designed to promote overseas investment and reduce the associated risks:

    • Insuring investments overseas against a broad range of political risks

    • Financing businesses overseas through loans and loan guarantees

    • Financing private investment funds that provide equity to businesses overseas

    • Advocating the interests of the American business community overseas


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Microfinance an agency of the United States of America.

Environmentally & Socially Responsible Financings

  • Extensive environmental and social policiesin project financing

  • Experienced staff in environmental and social issues evaluation

  • OPIC’s partnership with companies provides advice and assistance to borrowers to apply OPIC’s statutory requirements to projects that would otherwise not meet international standards

  • OPIC’s willingness to operate on a global scale provides the network and best practices methods to reach the unbanked in partnership with microfinance institutions

  • Citigroup recently completed two landmark transactions in 2005, Compartamos (Mexico) and ProCredit (Germany), with OPIC

OPIC Developmental Initiatives

U.S. Private Investment in Key Sectors

Small and Medium Sized Enterprises

  • OPIC solutions implemented to support private investment in more than 150 developing and emerging market countries worldwide

  • Focus on supporting United States small businesses

  • Sector focus on oil & gas, power, housing, consumer, and infrastructure

  • Support for SME and Middle Market clients investing internationally

  • OPIC support enhances commercial banks’ ability to lend to these entities via risk-sharing facilities

  • OPIC support for small businesses is dedicated to sustainable profitable growth

4


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Comprehensive OPIC guarantee for both commercial and political risks

Political Risk only

Financing Structures: OPIC Finance vs. OPIC PRI

OPIC Finance

OPIC PRI

Type of Cover

  • US lenders of at least 25%

  • US investor clean exposure of at least 25%

Eligibility

  • No use of bank lines for sponsor

  • Recourse to parent not necessarily required by OPIC

  • Financing can be on a project-finance or a corporate-finance basis, or a hybrid thereof

  • Mitigation of cross-border risk

  • Parent guarantee only called in commercial event

  • Protection against expropriation and political violence

Benefits

  • Comprehensive cover can be more costly than PRI

  • Parent guarantee required; parent bank lines utilized

Considerations


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Benefits of an OPIC supported structure political risks

  • Mitigation of Cross Border Risk

  • Diversification of funding base

  • Longer tenor than available in bank or capital markets

  • Competitive Cost of Financing

  • Execution Experience



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OPIC Finance Program political risks

OPIC’S objective is to promote and facilitate investment in developing markets by providing medium- to long-term funding to ventures involving significant equity or management participation by U.S. businesses.

OPIC can provide financing on a project-finance or a corporate-finance basis, or a hybrid thereof.

  • Preference for capital expenditures. Also eligible for privatization and acquisition finance with strong preference towards highly developmental projects.

  • Most valuable in non-investment grade countries characterized by costs and credit constraints (but available in any of the 150 countries where OPIC is open for business).

    Eligibility & Guidelines

  • U.S. investors must own 25% of a project company.

  • 50% of voting shares in a project company should be held by a private sector entity.

  • Tenors range from 3-15 years, following a suitable grace period.

  • Creditor participation is on a senior basis, pari passu with holders of other senior debt.

  • OPIC will share in a first lien on fixed assets and any other appropriate collateral.

  • OPIC normally requires a bi-lateral agreement but not a host government guarantee.

OPIC can typically lend up to $250 million per project on either a project finance or corporate finance basis in countries where conventional institutions are often unable or unwilling to lend on such a basis.


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The US$196 million Hamma Water Desalination is the world’s largest ever non-recourse project financing for a seawater desalination plant using reverse osmosis technology.

The transasction is the first non-recourse financing in Algeria for 18 years.

Hamma Water Desalination

US$196,000,000 Term Loan Facility

Transaction Highlights

  • Long-term OPIC financing supported by strong take-or-pay offtake agreement with Sonatrach, Algeria’s national oil & gas company, and Algerienne des Eaux

  • Pathfinder greenfield project financing for the first of a series of water desalination projects awarded to international sponsors by Algerian Energy Company under a Government program to build new desalination capacity of 1 million cubic meters per day of potable water by 2008

  • The transaction was closed in less than 18 months and was unaffected by GE’s acquisition of Ionics in late 2004

  • Largest ever non-recourse project financing for a seawater desalinization plant using reverse osmosis technology

    Innovations

  • First ever project financing in Algeria for an onshore contracted project

  • Longest ever tenor for an onshore project financing in Algeria—first 18 year non-recourse financing in Algeria

  • First ever OPIC financing in Algeria

  • First ever non-recourse financing in Algeria funded by U.S. capital markets investors under an U.S. Agency guarantee, previous US-Exim buyers credits were funded in the bank market and with full recourse to Sonatrach

  • Structure had single issuance into an offshore Trust, which obviated interest rate volatility. Disbursements were then able to be made discreetly minimizing funding costs

Borrower: Hamma Water Desalination SpA, a 70/30 joint-venture between GE Ionics and AEC.

Issuer: Fixed Rate Funding & Liquidity, Limited – a Delaware Trust which acted as intermediate borrowing and funding vehicle.

Purpose: The design, development, financing, construction, testing and commissioning, operation and maintenance of a US$250 million 200,000 m3/day seawater desalination plant in Algiers, Algeria.

Agency Provider: Overseas Private Investment Corporation (“OPIC”) provided the comprehensive guarantee for the Certificate of Participation (“COPs”) issuance to U.S. Capital Market Investors.

Offtaker: Long-term take-or-pay offtake agreement with Algérienne des Eaux and SONATRACH (Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures).

EPC Contractor: Orascom Construction Industries SAE, Egypt and Besix SA, Belgium.

Facility: Fixed-rate OPIC Amortizing Term Loan (the COPs).

Total Financing: US$196 million (+ US$10 million recourse performance bond).

Signing Date: 25 June 2005

Closing Date: 6 December 2005

Maturity: 18 years

Citigroup Roles: Sole Financial Advisor, Placement Agent of the OPIC COPs, Hedging Bank, Onshore Account Bank and Security Agent, Offshore bank, Paying Agent


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COP Holders largest ever non-recourse project financing for a seawater desalination plant using reverse osmosis technology.

(1)

(2)

Facility Agent

(1)

(2)

Borrower

OPIC Finance Structure – Non-Recourse

(1) OPIC extends a direct loan to the Borrower and sells Certificates of Participation (COPs) to U.S. capital market investors. The COPs are guaranteed by OPIC.

(2) Borrower makes principal and interest payments through the Facility Agent to the COPs Holders.

For Discussion Purposes Only


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Types of Political Risk Insurance Coverage largest ever non-recourse project financing for a seawater desalination plant using reverse osmosis technology.

OPIC Political Risk Insurance (“PRI”)

  • OPIC’s PRI Program objective is to promote and facilitate U.S. investment in emerging market economies by helping businesses manage risk.

  • OPIC offers the following types of Political Risk Insurance Coverage:

  • PRI protects and compensates against nationalization, confiscation, or expropriation of funds or assets as well as covers against unlawful governmental actions restricting investors of fundamental rights in a project.

Expropriation

  • OPIC compensates for property and income losses associated with violence undertaken for political purposes or motives.

Political Violence

Currency Inconvertibility

  • PRI protects investors against new currency restrictions or controls preventing the conversion from local currency to dollars. OPIC insures earnings, return of capital, principal and interest payments, and other fees associated with investment, and pays investors in U.S. dollars.


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In February 2004, Citigroup was Sole Bookrunner and Lead Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

This transaction was the first Agency guaranteed bond for Brazil following the 2002 market freeze.

Brasil Telecom: OPIC PRI Bond Offering

BRAZIL TELECOM S.A.

Transaction Highlights

  • Brasil Telecom provides fixed-line telecommunication services in nine Brazilian states located in the Western, Central and Southern regions of Brazil and in the Federal District, totaling 9.8 million of lines in service and 96% of market share for local services in the region

  • Citigroup was the Sole Bookrunner and Lead Manager for this US$ 200 million OPIC PRI Bond Offering, with the right to re-open issue up to US$ 300 million

  • Citigroup also obtained the Political Risk Insurance (“PRI”) for the bond through OPIC, with an amount of up to US$ 27 million, which is equivalent to 12-month debt service

  • The PRI term coverage is 10 years and covers currency inconvertibility and expropriation of funds

  • The proceeds will be used for refinancing of short-term debt, expansion and modernization of network and IT infrastructures, and other general corporate purposes

  • Brasil Telecom needed long-term financing at attractive costs, which was made possible through the OPIC PRI enhancement solution offered by Citigroup

    Market Reaction

  • First successful and oversubscribed OPIC enhanced transaction in the Latin America market

    Innovations

  • First Agency guaranteed bond for Brazil following the 2002 market freeze for the country

  • The transaction achieved better pricing in the market than a bond backed by private insurers

US$200,000,000 Political Risk Insurance Bond

Borrower: Brazil Telecom S.A. (“BrTelecom”)

Purpose: To refinance short-term debt, expansion and modernization of network and IT infrastructures and other general corporate purposes

Guarantor: Overseas Private Investment Corporation (“OPIC”) provided the Political Risk insurance for the bond

Facilities: US$ 200,000,000 Senior Unsecured Notes under 144A/Reg. S

Total Financing: US$200 million

Total Project Cost: up to US$ 300 million

Ratings: BBB- (S&P)

Baa3 (Moody’s)

Closing Date: February 17, 2004

Maturity: February 18, 2014

Citigroup Roles: Sole Bookrunner and Lead Manager


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Lenders (>25% U.S. Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

lender participation)

(1)

OPIC PRI

Statutory

Business Trust

(4)

(3)

(2)

Project

Company

OPIC PRI Structure

(1) Lenders compromising of at least 25% U.S. financial

institutions, lend into Trust.

(2) Trust lends to Project Company

(3) Project Company repays loans through Trust.

(4) In the event a default, Lenders, through the Trust, make a

claim under the PRI policy from OPIC.

For Discussion Purposes Only


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Millicom Ghana Limited: Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

US$20 Million OPIC-Supported Financing

Millicom

Transaction Highlights

Citigroup as Sole Lender, Lead Arranger and OPIC Facility Agent closed a US$ 20MM financing in July 2005 to finance capital expenditures to expand network capabilities of Mobitel’s GSM network in Ghana

  • Millicom Ghana (widely known by its trade name “Mobitel”) was the first cellular operator in Ghana, having commenced operations in 1992 with an analog ETACS network. The company also pioneered the concept of pre-paid services in Ghana with the launch of the “Starcall” pre-paid card product in 1998

  • The facility will support the purchase of key network equipment to Ghana to increase network coverage and improve service quality

  • The door-to-door tenor is 5 years with an average life of 3.17 years

    Innovations

  • Achieved a successful close and an expeditious transaction execution despite challenging market circumstances

  • First Citigroup OPIC facility for telecommunications in Africa

Borrower: Millicom Ghana (“Millicom” or “Mobitel”)

Guarantor: OPIC

Shareholders: Millicom Ghana is 100% owned by Millicom International Cellular S.A. (“MIC”), with MIC having increased its shareholding from 70% to 100% in mid-2002

Transaction Size: US$20 million

Purpose: To finance expenditure for telecom facilities and implement Millicom Ghana’s strategic plan to increase its network capabilities on the mobile GSM network in Ghana, take advantage of the continuing growth in the GSM market in Ghana.

Tenor: 5 years

Closing Date: 19 July, 2005

Citigroup Roles: Sole Lender, Lead Arranger and OPIC Facility Agent

Lender: Citigroup


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OPIC Risk-Sharing Transaction Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

Citigroup

Borrower

(2)

(1)

(3)

  • (1) OPIC provides a 100% comprehensive guaranteed loan for 50-75% of full loan amount to Borrower with Citigroup acting as lender of record

  • (2) Citigroup provide a clean loan to the Borrower for the remaining loan amount and issues the loan in the full amount to the Borrower

  • Repayments of principal and interest flow through Citigroup

For Discussion Purposes Only


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New York Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

Washington, DC

OPIC and Citigroup Transactions Around the World

Frankfurt

Frankfurt

Brussels

Brussels

London

London

Paris

Paris

Istanbul

Milan

Milan

Chicago

Chicago

Seoul

Seoul

Algiers

Algiers

Tokyo

Tel Aviv

Shanghai

Miami

Miami

Cairo

Cairo

Taipei

Bahrain

Bahrain

Dominican Republic

Dominican Republic

Mexico City

Mexico City

Hong Kong

Mumbai

Dakar

Dakar

Hanoi

Hanoi

Caracas

Manila

Manila

Bangkok

Bangkok

Singapore

Singapore

Bogotá

Bogotá

Kuala Lumpur

Kuala Lu

Nair

Nair

Nair

obi

Jakarta

Jakarta

Lima

Lima

Lima

Sao Pau

Sao Paulo

Johannesburg

Johannesburg

Sydney

Santiago

Santiago

Buenos Aires

Buenos Aires

Global Export and Agency Finance Regional Offices

Local Corporate Finance Offices

Countries where OPIC and Citigroup work together


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Citigroup’s Leading Experience with OPIC Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

Citigroup is the market leader in developing innovative OPIC financing structures.

Citigroup and OPIC have been partner for many years. The partnership success is reflected in the innovation and number of deals completed.

  • Between 2002 and 2005: Citigroup and OPIC completed over 20 Risk Sharing transactions and closed the Iraqi Middle Market Development Fund (IMMDF).

  • First financial institution to have secured OPIC insurance for an interest rate swap obligation (Tri-Energy).

  • First financial institution to arrange a co-insurance agreement with the private sector (Brazil – Zurich Insurance).

  • First Equity investment fund established for OPIC (African Growth Fund, 1988).

  • First lending trust structure providing OPIC coverage to a syndicate of multinational banks (Kafco, 1992).

  • Only multi-user Commercial Paper vehicle accepting OPIC-backed assets (1993).

  • First public offering of OPIC Certificates of Participation (1994).

  • Since 1994, OPIC and Citigroup have signed commitments of close to US$5 billion.


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Contact List Manager of a US$200 million OPIC PRI Bond Offering for Brasil Telecom.

Citigroup Export & Agency Contact List

11


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Although the information contained in this presentation is believed to be reliable, we make no representation or warranty as to the accuracy or completeness of any information contained in this presentation or otherwise provided by us and we accept no liability for the accuracy or completeness of such information. Prior to entering into any transaction contemplated hereby (a “Transaction”) you should determine, without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks), as well as the legal, tax and accounting characterizations and consequences of any such Transaction. In this regard, by accepting this presentation, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice, (b) there may be legal, tax or accounting risks associated with any Transaction, (c) you should receive (and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters.

Any terms set forth in this presentation are intended for discussion purposes only and are subject to the final expression of the terms as set forth in separate definitive written agreements. Notwithstanding anything herein or in any agreement we may enter into to the contrary, you (and each of your employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to you relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.

This proposal is to be used as a basis for continued discussions, and does not constitute a commitment of Citigroup to lend, arrange or syndicate a financing or an agreement of Citigroup to prepare, negotiate, execute or deliver such a commitment. The delivery of a commitment would be subject, among other things, to (i) Citigroup's satisfaction with the results of its due diligence; (ii) final credit approval by Citigroup for its financing under the Facility; and (iii) Citigroup's satisfaction that other lenders would participate in the facilities on the basis outlined herein. The terms and conditions of the proposal, including the amounts, interest rates, amortisation and fees, may be modified or supplemented by Citigroup in its sole discretion at any time and from time to time during the course of its due diligence and credit approval process or as a result of changed market conditions or otherwise.

© 2003 Citigroup Global Markets Limited. Regulated by the Financial Services Authority.

CITIGROUP and Umbrella Device are trademarks and service marks of Citicorp or its affiliates and are used and registered throughout the world.


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