ANALYSIS: BNP Paribas tops Ex-Im bond financiers in first half

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French bank BNP Paribas has acted as arranger and/or bookrunner on eight US Export-Import Bank transactions worth $1.17 billion, making it the most active export credit agency bond financier in the first half of this year, according to data compiled by Flightglobal.

A total of 25 Ex-Im bond issuances were completed in the 1 January - 30 June period. JP Morgan followed closely with seven issuances, while Crédit Agricole-CIB and Citigroup arranged four transactions each.

During the first six months, Korean Air issued Ex-Im bonds worth $712 million, making it the largest export credit borrower, according to the data. The Asian carrier tapped the market four times, by issuing pre-funded floating-rate guarantee bonds, refinancing four deliveries.

Airlines turned to the Ex-Im bond market to fund more than 35 aircraft to the tune of $4.26 billion in the first half. This compares with $987 million worth of transactions in last year's corresponding period.

Export credit agencies-guaranteed transactions made a comeback in the first quarter with Emirates issuing a $187 million Coface-guaranteed bond, refinancing a new Airbus A380. The transaction priced at 2.341% in a deal arranged by JP Morgan.

Airlines issued $1.63 billion worth of Ex-Im bonds in the first quarter.  


LATAM issued two bonds guaranteed by the UK's Export Credits Guarantee Department (ECGD) in the second quarter, both refinancing four A320s each. The Latin carrier issued the bonds through the vehicle, Carpintero Finance, totalling $270 million. The 12-year bonds priced at 2% and 2.51% coupons, respectively.

The April-June quarter was particularly active with 15 deals closed totalling $2.55 billion.  


Pricing spiked mid-June after the US Federal Reserve chairman Ben Bernanke indicated that the bond stimulus could come to an end. The yield on 10-year US treasuries spiked to 2.3% immediately, after trading in the 1.7% range since the beginning of the year. Despite this, June proved a busy month for new issuers with Kuwaiti aircraft leasing company ALAFCO, LOT Polish Airlines and Turkish Airlines all tapping the market for the first time.

Turkish made its Ex-Im bond debut with a yen-dominated transaction refinancing some Boeing narrowbodies. The 12.58 billion yen ($128.4 million) 12-year bond priced at a 1.345% coupon, the equivalent to yen mid-swap spreads plus 50 basis points.

LOT Polish Airlines refinanced two Boeing 787-8 deliveries last month in a $185 million transaction.

The first bond totalled $89 million and refinanced a December 2012 delivery. The pricing on the coupon was 2.18% equivalent to mid-swap spreads plus 62 basis points. The second bond totalled $96 million and refinanced a May 2013 delivery. The pricing on the coupon was 2.22% equivalent to mid-swap spreads plus 62 basis points. The aircraft are part of a five-aircraft Ex-Im-guaranteed loan provided by Apple Bank for Savings, with an option to refinance in the capital markets with KGS-Alpha Capital Markets.

The Polish carrier tapped the capital markets again in July with a $97 million transaction priced at 2.677% a coupon equivalent to mid-swap spreads plus 65 basis points.

ALAFCO made its bond debut with a $161 million transaction, refinancing a new Boeing 777-300ER delivery that was acquired under a sale and leaseback agreement with Garuda Indonesia. The bond priced at a 2.209% coupon equivalent to mid-swap spreads plus 58 basis points.

The Ex-Im bond market is heading for a record year with 74% of last year's volume already completed during the first six months of this year.

In the second half of 2012, an estimated $4.71 billion in capital markets transactions were issued.