By Ed Ansell
Satellite Finance (3/14/14)

Satellite Finance

The Russian export credit agency EXIAR is looking to play an integral role in helping International Launch Services win more commercial launch contracts.

The agency has already met with a number of satellite operators and is actively offering its support for ILS in ongoing launch tenders.

Speaking to SatelliteFinance, Alexey Tyupanov, head of business development and member of the management board at EXIAR, said the ECA will be increasingly active in the sector and that it does not have any limitations on the lending guarantees it can provide.

Tyupanov said: “Before the creation of EXIAR, ILS’ commercial proposals were lacking the state’s financial support. Now, hopefully, we will fill that gap. ILS is a core customer and we will be very focused to support it.”

Over the past few years, the US and French ECAs have become ubiquitous in the bids proposals made by their satellite manufacturers and launch providers.

This is something that ILS believed left it with a competitive disadvantage. Indeed, ILS CEO Phil Slack believes that there have been contracts that the company has lost out on because it had not offered ECA support. He gave one example where ILS pitched at a price 20% below its rival but lost out due to lack of an ECA option.

Tyupanov wants to provide the company with that competitive advantage and believes that EXIAR can offer a product that its French and US rivals currently do not.

“What differs us from other ECAs, and what we have been presenting to customers of ILS, is that legally we do not have limitations in terms of the minimum amount of Russian content in the project. Every project is considered on a case by case basis and we decide whether we will support it or not. This gives us a certain flexibility compared to other ECAs.

“For example, in terms of satellites, we will look at a project with a Russian launcher and a foreign satellite and payload and we will consider supporting the whole project – not just the launcher.”

Tyupanov pointed out that EXIAR can also bring financing from Russian banks. He said: “The satellite industry has not seen them before. While we work well with international banks like ING and HSBC, there is substantial liquidity in the Russian banking system and this is an absolutely untouched pocket of money for satellite and telecoms companies all over the world. And the financial terms of Russian banks with EXIAR cover can be very, very competitive.

“Russian banks have not been active in export credit because, while they know the Russian client, they have never dealt with the risks outside Russia. Now that they have EXIAR on board they feel much more comfortable.”

EXIAR was established as a state-owned joint stock company in 2011. Unlike the US ExIm Bank and Russia’s own Roseximbank, which provide direct loans, EXIAR follows a similar model to France’s COFACE, providing export credit insurance. This sees it typically guarantee 95% of a bank loan.

In 2013, its first active year of operation, EXIAR covered about 60 transactions worth US$2.5bn. It currently has about 100 projects in the pipeline, valued at more than US$10bn.

None of these though are for the space sector and Tyupanov is hoping to change that. One such way is through EXIAR offering to refinance loans used by satellite companies to fund Proton launches.

“We feel this will give a certain degree of comfort to prospective customers – to look how EXIAR is operating, how Russian and international banks cooperate with EXIAR and what can be the financial terms. And they have time to decide,” he said.

See the next edition of SatelliteFinance for the full exclusive interview with Alexey Tyupanov.

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