AIRFINANCING WORKSHOP AFTERNOON SESSION – MARCH, 30th

PANEL 2: Resources for the sector: access to the capital and financings

PAINEL 2: Recursos para o setor: Acesso ao capital e financiamentos

BNDES Export Credit and Guarantor Funds Division (AEX)

April, 2017Marcio Migon

Classification: Open InformationManagement Unit: AEX

Founded on June, 20th, 1952.

100% state-owned company under private law.

Key instrument for implementation of Federal Government’s industrial and infrastructure policies.

Main provider of long-term financing in Brazil.

Emphasis on financing investment projects.

Support to micro, small and medium-sized companies is a BNDES´ strategic priority at the moment.

BNDES Highlights

InfrastructureHeavy Industry – Consumer Goods

Technological Development

Time Line

Energy

Agribusiness

Exports

Urban and Social Development

Social Inclusion

Small BusinessSustainability

Innovation

50’s 60’s 70’s 80’s 90’s 00’s Today

Imports Substitution

Privatization Program

10’s

Privatization Program

Total Assets

In R$ billion

187 203277

387

549625

715782

877931

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Annual Disbursements

65

91

136

168

139

156

190 188

136

62

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q

In R$ billion

Data for the first three quarters of 2016.

Disbursements for Export Finance

Converted to US dollar on the disbursement dates.In US$ billion

3,24,5

3,54,9

1,70,9

1,70,4 0,9

0,2 0,3

2,6

4,5

8,0

2,3

2,9

3,7

2,2

0,3

1,6

1,0 0,5

0,4

0,4

0,20,3

0,7

1,0

0,9

1,4

1,10,8

0,7

1,2

1,7

2,0

2,5

1,9

1,8

1,0

0,6

0,1

5,9 6,3

4,2

6,6

8,3

11,3

6,75,5

7,1

4,4

2,1

4,1

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TotalPost-shipmentBNDESPost-shipmentFinamePSIPre-shipment

8Fontes: Embraer e BNDESData base: dezembro/2016

1.072 aeronaves financiadas, US$ 20,3 bi desembolsados

Embraer 120, 135, 140 e 145646 aeronaves Embraer 170, 175, 190, 195

426 aeronaves

1434 40

9480

129

70 7151

18

1333

23

20 17 9 4 721

42 4361

1

11

3 15 3832

14

171

1

10 82

6

6

7 6

14

44 48

94

80

129

70

84 85

52

0

2334

53

3627

45 4943

62

204

606665

1414

1154

1910

1354

16191755

1224

0

483

692

1221

988

584

995 1005 985

1463

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0

20

40

60

80

100

120

140

160

180

200

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Família145(601) Família170(293) Família190(133) Outros- defesa,executivaeE120(45) Desembolsosanuais

Aeronaves(unidades)

Desembolsos(US$milhares)

Liquidez ‘exuberante’ Crise 2008

Disbursements for Aircraft Export Finance

IDB - Inter-American Development BankIBRD - The International Bank for Reconstruction and Development (World Bank)CAF - Corporación Andina de FomentoCDB - China Development Bank(*) Converted by the quote currency against the US dollar 31/12/2015 (**) Unlike other institutions, 12-month fiscal year ends June 30th

Capitalization - Shareholders' Equity / Total AssetsROA - Return On average AssetsROE - Return On average Equity

US$ million BNDES* IDB IBRD** CAF China DB*Dec 31st, 2015 Dec 31st, 2015 Jun 30th, 2015 Dec 31st, 2015 Dec 31st, 2015

Total Assets 236,019 111,139 343,225 32,470 159,058Shareholders' Equity 7,845 25,253 38,639 9,524 157,576Net Income 1,542 960 686 77 14,045Capitalization 3.33% 22.72% 11.26% 29.33% 99.07%ROA (%) 0.67% 0.86% 0.20% 0.24% 8.83%ROE (%) 15.37% 3.80% 1.78% 0.81% 8.91%Established 1952 1959 1945 1968 1994

BNDES vis-à-vis Multilateral Banks

BNDES Funding

Domestic Funding§ FAT – Workers’ Assistance Fund (Constitutional)§ PIS-PASEP Fund§ FI-FGTS§ BNDESPAR Bonds§ National Treasury

Foreign Funding§ Government Agencies and Multilateral Institutions§ Market Funding§ Bonds, Loans, Structured Notes (ABS)

Who can apply for BNDES´ Financing?

Legal Entities established

in Brazil

Brazilian Private

Individuals

• Companies: agro-business, industry, trade and services etc.

• Cooperatives or associations• NGOs, OSCIPs or Foundations

• Rural producer• Truckers• Micro-entrepeneur

• Municipalities • States• Federal

Brazilian Public

Management

Export Credit and Guarantor Funds Division

(AEX)

Competitive export § to improve competitiveness of Brazilian products§ Emphasis on products with higher-aggregated value

Credit facilities§ lines of financing designed to facilitate exports

Support for small and medium-sized export companies § to increase the number of Brazilian exporters

Indirect operations aimed to small business§ operating in partnership with a network of accredited financial

institutions in Brazil and over 100 foreign banks

Goals

Financing for the production of goods earmarked for export,

linked to specific shipments, or to the increase of the

company’s total exports

Buyer or Supplier Credit: financing for the commercialization of goods and services in foreign countries

BNDES Exim

Pre-shipmentProduction in Brazil

Post-shipmentForeign Trading

Export Support - Credit Lines

Aircraft

Oil & Gas

Vehicles

Machinery and Equipment

15

Examples

Industry

Hydroelectric Power

16

Banks

Lessors

Capital Markets

ECAs

Main Sources of Airfinance

17

25% 21% 28% 31% 28% 27%

5% 11%14%

28% 34% 36%22% 25%24%

24% 23% 24%33%

34%26%

15% 13% 11%13% 7% 5%2% 2% 3% 2% 2% 2%

0%10%20%30%40%50%60%70%80%90%

100%

2011 2012 2013 2014 2015 2016F

bankdebt capitalmarkets cash

exportcredit lessors(self-fund) taxequity

A participação das ECAs oscila, historicamente, em torno de 20% do total anual do mercado de finaciamento de jatos comerciais novos...

ECAs:

Main Sources of Airfinance

Post-shipment by Export Destinations

AfricaEurope and AsiaNorth AmericaSouth and Central America

In US$ billionConverted to US dollar on the disbursement dates.

COFIG

Ministries: . Industry, Foreign Trade and Services;. Planning, Development and Public

Management;. Finance (SAIN and STN);. Foreign Affairs;. Chief of Staff; and. Agriculture.

Financing

Council of Ministers

19

CAMEX

Operacional Committee

PROEX

Export CreditInsurance

Institutional Arrangement

What we are doing....

o Aircraft (D1)• Support Embraer on its transition for new generation of

commercial aircraft “E2” and the launch of its multipurposeaircraft KC390

• On-lending transactions (e.g., China Exim)• Securitization of liquid assets

o Services (D2)• Execution of new compliance terms• Disbursement resumption• New project analysis

o Goods (D3)• BNDES as its own “Agent Bank” (goal: over 100 new

transactions in 2017)• Exim Automático – network of accredited financial institutions

BNDES Challenges and future

o Domestic market• New operational policies • Convergence TJLP-Selic interest rates• Focus on long term financing solutions• Local content requirements• Other sources of funding

o Foreign market• BNDES Guarantee for short term transactions and foreign

investments in Brazil• Further BNDES underwriting risk on its balance sheet• Loan “4131” / FX and interest rate hedge solutions • On-lending transactions• Other sources of funding / Securitization

22

Thank you!Brazilian Development Bank - BNDES

Export Credit and Guarantor Funds Division (AEX)

www.bndes.gov.br/english