ANNOUNCEMENT 25 Dec 2013In December 2013, the government of Republic of Korea announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Export-Import Bank of Korea press release: Korea Eximbank Provides USD 340 Million Ship Financing to Stena
Available at: https://www.koreaexim.go.kr/site/program/board/basicboard/view?currentpage=8&menuid=002001007&pagesize=10&boardtypeid=284&boardid=16949
Guide to the Export-Import Bank of Korean
Available at: https://www.koreaexim.go.kr/site/inc/file/fileDownload?dirname=/doc/002&...
ExImBank official website: https://www.koreaexim.go.kr/site/main/index002
On 25 December 2013 the Export-Import Bank (Eximbank) of Korea signed a loan agreement with Swedish Stena amounting to USD 340 million in ship financing. The loan consists of a USD 240 million Direct Loan and a USD 100 million Comprehensive Guarantee. The loan finances the Swedish company's purchase of two semi-submersible drilling rigs from Korean Samsung Heavy Industries at a value of USD 1.4 billion.
In this context the Bank stated: 'Stena retains a cancellation option for one of the two drill ships which is effective until the end of 2013, and we moved quickly to secure that portion of the contract for Samsung Heavy Industries with our customized financing.'
The Eximbank of Korea operates with various financial instruments, including Direct Loans and Comprehensive Guarantees, to promote its maritime sector. Direct Loans are provided to foreign buyers when financing their purchase of specific Korean maritime goods, whilst a Comprehensive Guarantee is provided for ship buyer's repayments. More information on the Bank's financial instruments can be found on the official website or the "Guide to the Import-Export Bank of Korea" publication.
According to UN Comtrade, no trading partner exceeded the GTA threshold of USD 1 million in the affected tariff lines in the year prior to the intervention. Thus, no affected trading partners have been identified.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.