Leumi Wins Awards
2006 "Best Transaction" Prize
In order to accompany its customers in all countries in which they operate, and to provide them with a number of business opportunities, Leumi executes large volume international financing transactions throughout the world. One of the proofs of the success of these transactions is the 2006 transaction of the year prize awarded by the international export magazine, “Trade Finance” for a financing transaction executed by Leumi.
The Essence of the Transaction
Within the framework of this transaction, Leumi lent $ 21.6 million to Bank CABEI, which is owned by a number of Central American Governments. The purpose of the transaction was financing the installation of an optical communications grid in Costa Rica to be executed by ECI Telecom, ICE in the past (a government company for supplying electricity and telephone services in Costa Rica).
A Creative Solution to Regulatory Limitations
This transaction was made complex and spellbinding by a number of regulatory risks, which required solutions and which highlighted it amongst the thousands of transactions executed this year and presented to the magazine. One of the apprehensions was related to the Costa Rica government's ability to cancel the infrastructure project unilaterally from public benefit aspects, a fact leaving the lenders in the Costa Rican market facing the risk of non-repayment of the loan. Furthermore this transaction was not granted a government guarantee. These two problems were amongst the factors that led Leumi to a unique decision: splitting the risk amongst various bodies including secondary guarantors and insurers. Cooperation between them required very tight cooperation.
A Winning Combination of Professionalism and Mutual Trust
This transaction was insured by Israeli government owned, Isra –The Israeli Co. for Insuring Export Ltd., which obtained secondary insurance from the well known insurance company, Zurich. Leumi included the French bank, BNP P. as an additional financer in the transaction.
The excellence, cooperation, trust and sensitivity in which the proceedings between the various involved bodies were executed, as well as the creative solutions proposed by the parties, all resulted in Leumi receiving the prize.