LatinFinance - July/August 2015 - 18
TRADE
FINANCE
BRAZIL
A little-used export financing wrap is set to boom as BNDES takes a step
back from lending. By Sara Rosner
Guaranteed
revival
W
hen Brazil rolled out its export guarantee program in 1979, the prospect of a
wrap from a sub-investment grade sovereign, unsurprisingly, caught little interest from commercial lenders. For decades, the guarantee, which can cover up to 100% of the commercial
and political risk of a financing, remained exclusively the province of state development
bank BNDES.
Even when Brazil reached investment grade in 2008, the appeal of the guarantee - and efforts by Secretaria de Assuntos Internacionais (SAIN), which administers the program, to
expand the offering - was muted by the global financial crisis.
"Honestly, very few people were aware of the structure. It has been handled for 35 years by
people based in Brasilia that only talked to BNDES. It was not really a focus of the government to market these things," says Florence Shoshany, head of structured trade and export
finance at Deutsche Bank in São Paulo.
That is quickly changing. Brazil's dreary economy - Goldman Sachs forecasts GDP will contract 1.1% this year, compared to 0.3% growth in the region as a whole - and a government
bid to rein in BNDES' budget is setting the conditions for a new push.
"BNDES financing carries a much higher cost for the Brazilian government compared to a
structure where the government issues a guarantee and private banks bear the costs of providing the financing," Shoshany says.
18 L ATINFINA NCE.COM - July/August 2015
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - July/August 2015
Contents
LatinFinance - July/August 2015 - Cover1
LatinFinance - July/August 2015 - Cover2
LatinFinance - July/August 2015 - Contents
LatinFinance - July/August 2015 - 2
LatinFinance - July/August 2015 - 3
LatinFinance - July/August 2015 - 4
LatinFinance - July/August 2015 - 5
LatinFinance - July/August 2015 - 6
LatinFinance - July/August 2015 - 7
LatinFinance - July/August 2015 - 8
LatinFinance - July/August 2015 - 9
LatinFinance - July/August 2015 - 10
LatinFinance - July/August 2015 - 11
LatinFinance - July/August 2015 - 12
LatinFinance - July/August 2015 - 13
LatinFinance - July/August 2015 - 14
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LatinFinance - July/August 2015 - 16
LatinFinance - July/August 2015 - 17
LatinFinance - July/August 2015 - 18
LatinFinance - July/August 2015 - 19
LatinFinance - July/August 2015 - 20
LatinFinance - July/August 2015 - 21
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LatinFinance - July/August 2015 - Cover3
LatinFinance - July/August 2015 - Cover4
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