Download EMW09_Vincent

Funding in Times of Crisis:
“ Relieving the Burden”
Finding Local Currency solutions
to Loan Repayments
[email protected]
www.e-mfp.eu
Agenda
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Introduction
Risks related to MF Investments
The Post Lehman's period
Local Currency Loans
The Local Markets
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Foreign Exchange; Focusing on Less Liquid Exotic Markets
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International Assets Holding Corporation (IAHC) is an independent, publicly owned
financial services firm focused on select, niche international markets. By using its capital
and expertise, INTL seeks to facilitate wholesale, cross-border financial flows through
market making and trading of international financial instruments.
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INTL Global Currencies specializes in providing specialist foreign exchange and treasury
services to NGO’s and multi-national corporations doing business in the more difficult
emerging markets for more than 25 years.
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Clients include over 450 NGO’s, UN and bilateral aid agencies, OECD embassies
worldwide, Financial Institutions and Corporations. 2009, has seen the addition of MIVs
and DFIs to this extensive client base.
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Market coverage of over 125 currencies with longstanding experience in the less liquid
markets. In these smaller more difficult markets, our relationships with a wide variety of
local banks allows us to capture very competitive rates not offered by the larger
international banks.
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Through our proprietary dealing platform – FXecute - we provide an integrated web-based
solution for Clients to manage their large currency requirements.
[email protected]
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MF Investment Risks
Hard Currency
Loan
Country Risk
Lender
Credit Risk
Lender
Currency Risk
Borrower
Liquidity Risk
Borrower
Settlement Risk
Lender & Borrower
Burden on MFI
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The Post Lehman’s Period
 International banks called in their loans > USD
squeeze started;
 Biggest impact on the more stabilised emerging
countries with a track record of a stable economy;
 This created the effect of unwinding in 6 months a
steady 6 years’ worth of investments economy;
 Leading to huge currency depreciation > MFIs
suddenly faced huge liability in combination with
shortage of USD for repayments
Relieving the burden……
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Local Currency Loan Risks
Hard Currency
Loan
Local Currency
Loan
Solution for
LC Loan Risks
Country Risk
Lender
Lender
X
Credit Risk
Lender
Lender
X
Currency Risk
Borrower
Lender
Hedging
(e.g. TCX, MFX, Cygma)
Liquidity Risk
Borrower
Lender
Professional
Service Provider
Settlement Risk
Lender & Borrower
Lender
Professional
Service Provider
Burden on MFI
Burden on MIV
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Burden can be relieved
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Local Markets
Central/Latin America
Africa
Asia
Liberalized market
Liberalized market
Regulated market
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Added Value of Professional Executer for DFIs,
MIVs and MFIs
Access to:
 Knowledge: local rules and regulations
 Operational Excellence
 Professional and Dedicated staff
 Liquidity
 Competitive Pricing
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www.e-mfp.eu