Thailand / Project for Export of Bulk Carriers to TTA Group
Nippon Export and Investment Insurance
NEXI has decided to underwrite Buyer's Credit Insurance for the loan extended to Thoresen Thai Agencies Public Company Limited (TTA) Group, a major shipping agent in Thailand. The loan will be used by the TTA Group to buy two bulk carriers built by Japan's Oshima Shipbuilding Co., Ltd. and the bulk carriers will be exported by Sumitomo Corporation.
The Buyer's Credit Insurance will be provided with percentage of cover of 97.5% for political risks and 95% for commercial risks for the portion of the loan extended by a commercial bank (Société Générale, Tokyo Branch) that amount to approximately JPY3.2 billion. This amount is equivalent to half the total amount of loan (approximately JPY6.4 billion) extended by the Japan Bank for International Cooperation (JBIC) and Société Générale, Tokyo Branch. The loan contract was concluded on October 31, 2007.
TTA Group has made the decision to purchase newly-built vessels backed by the increase in demand for dry bulk shipping of such materials as coal, iron ore, structural steel, etc. and the high utilization rate of vessels in response to the construction rush in China and the Middle Eastern countries. The insurance covers the loan necessary in buying the vessels built by Oshima Shipbuilding Co., Ltd. This transaction will support the export by the shipbuilding company which has a reputation for its technology and has been building about 400 bulk carriers since it was established by concentrating on building bulk carriers.
NEXI has decided to cover the transaction as a result of making a prudent assessment on the creditworthiness and the status of security granted on the concerned parties as it is a non-L/G transaction or a transaction without government guarantee and also a buyer's credit transaction where financing is shared between commercial bank(s) and JBIC (in this case the financing is shared equally between the commercial bank and JBIC).
NEXI intends to make good use of this experience and provide support to the expansion of orders for the shipbuilding companies through further extending insurance coverage that meets the needs of Japanese shipbuilding companies.
|Insured||Société Générale, Tokyo Branch|
|Type of Insurance||Buyer's Credit Insurance|
|Covered Risks||Political and commercial risks|