STRUCTURED FINANCE DEALS
HOW DO THEY WORK AND WILL THEY WORK?
by David Hew
Tel:(65) 2501211; Fax: (65)2501277; E-mail: apcasec@singnet.com.sg
© David Hew 2000. All rights reserved
The information contained herein should not form the basis of
any decision as to a particular course of action; nor should it
be relied on as advice or regarded as a substitute for detailed
advice in individual cases. The services of a competent
professional adviser should be obtained in each instance.
1
PRELIMINARIES
• Definitional incongruity;
• UNCTAD’s definition;
• Structured Finance pre Asian Crisis;
and
• Situation post Asian Crisis
2
DEFINITIONAL INCONGRUITY
• “Structured financing operations {include} a wide array
of instruments: leveraged buyouts, management buyouts, restructuring, industrial projects, infrastructure
projects; secured debt;term loans, operating loans and
asset-based secured lending” - A major U.S. financial
institution
– Comments: Vague. Excludes project finance, does not deal
with import or export of commodities as well as non-banking
operations such as securitisation
3
DEFNITIONAL INCONGRUITY
• “Structured Commodity Finance refers to the sum of
banking operations pertaining to an import or export of
commodities which are not plain vanilla” - A major French
bank.
– Comments: Vague. Implies that anything a bit complex will
qualify as structured.
• “Structured Commodity Finance provide working capital in
difficult environments by mitigating the risk through
mortgaging an export flow” - Branch of an Austrian bank.
– Comments: What about structured commodity financing for
commodity importers?
4
DEFINITIONAL INCONGRUITY
• “{Include} asset-based financing, limited recourse project
financing, cross-border financing and structured/hybrid debt
products” - A leading South African bank.
– Comments: Definition too broad.
• “Commodity linked financing, also known as asset-backed
securitisation or structured finance, makes the use of
commodity or asset to improve the credit quality of
financing” - Managing Director of the International
Commodity Division of a major U.S. commercial bank
– Comments: Commodity financing can be structured for use by the
5
banking market and for non-banking investors as well.
UNCTAD’S DEFINITION
“A technique whereby certain assets with more or
less predictable cash flows can be isolated from the
originator and used to mitigate risks (eg. transfer of
foreign exchange, contract performance and
sovereign risk), and thus secure a credit”.
6
UNCTAD’S DEFINITION DISSECTED
• “A technique …”
– A methodology implying certain requisite skills or knowledge.
• “… certain assets … with (1) more or less predictable cash
flow … (2) isolated from the originator and used to
mitigate risk ...”
– (1) Suggests that structured finance is financing based on future
receivables which are IDENTIFIED and more or less ASSURED.
– (2) Suggests that assets to support the financing must be
AVAILABLE, ISOLATED and USED to mitigate risk. This
implies that there are 2 ESSENTIAL PARTS in a structured
finance transaction.
7
2 ESSENTIAL PARTS
• (1) Arrangements which ensure that if a transaction
proceeds normally, the financier is automatically
reimbursed. The loan is therefore self-liquidated.
• (2) Arrangements further ensure that, if anything
goes wrong, the financier has recourse to some assets
as collateral.
8
UNCTAD’S CONCLUSION
Overall “this form of finance allows for wider
possibilities than other forms of short-term financing,
which are normally limited to companies with
acceptable credit risk or conditional upon onerous
security, and gives access to financing on better
terms”.
9
UNCTAD’S CONCLUSION
• Why “ … wider possibilities …” apart from the 2 reasons?
– “Bankability” increased because transaction economics improved.
– Can be used in both trade and project finance.
– Can be used in credit structures by bank or non-bank entities
• How “ … financing on better terms …” ?
– From the financier’s perspective, better pricing can be offered
since credit is either enhanced or the risk shifted to a strong offtaker and all other risks identified and mitigated.
– From the borrower’s perspective, better costing achieved, longer
maturity periods and more favourable balance sheet treatment.
10
PRE-ASIAN CRISIS STRUCTURED FINANCE
• Two types of structured finance techniques prevalent
before the Asian Financial Crisis.
• Asset Backed Securitisation (ABS) – Fixed income
debt instrument whose principal and interest
payments are governed by cash flow generated by
underlying asset. By convention ABS is backed by
non-mortgage assets.
• Mortgage Backed Securitisation (MBS) – Specific
type of ABS where the debt instruments are backed by
a pool of mortgage loans.
11
ASSET SECURITISATION STRUCTURE
Initial cash flow
Future cash flow
Obligors
Proceeds
Originator
Special
Purpose
Vehicle
(1) Transfers right to
receive future receivables
Payments
(4) Investors look to future cash flows
and credit enhancement for repayment
Rather than to the originator.
Third
Originator risks eliminated.
Parties
Proceeds
Investor
(3) SPV issues asset
backed & rated securities
Principal and
Interest
(2) Enhancements added to the
Structure to improve credit quality
12
ASSET BACKED SECURITIES
• Process of distributing risk by aggregating debt
instruments or assets in a pool, then issuing new
securities back by the pool.
• Asset pool being securitised has a lower default risk
than the company itself and therefore if financed
discretely, commands a better rating and tighter
pricing. Ratings improvement can also occur
relative to the issuer or the sovereign ceiling rating if
the issuer is resident in a non-investment grade
country.
13
MORTGAGE BACKED SECURITIES (MBS)
• MBS in Asia emulates the United States’ success in
securitising housing loans mortgages (where fees and
interest received are not liquid and loans not negotiable),
making them liquid and marketable
– “Fannie Mae” of the Federal National Mortgage Association
and “Freddie Mac” or the Federal Home Farm Mortgage
Corporation
• Asia’s equivalent
– Indonesia – SMF (secondary mortgage facility); Malaysia –
Cagamas; Hong Kong – Hong Kong Mortgage Corporation
14
HOWEVER, ABS or MBS requires
• Good credit ratings – Examples of AAA rating
– Thai Cars, LIBOR+22bps, average life – 1.5 years
– ASF 1, LIBOR+17 bps, average life – 0.9 years
• Attractive coupon rates;
• Stable cash flow;
• Liquid secondary market; and
• Range of maturities
15
SITUATION POST ASIAN CRISIS
• ABS and MBS activities to sustain pre-crisis rapid
growth momentarily halted by Crisis;
• Funding still needed (in fact even more needed) but
financiers’ risk tolerance considerably reduced;
• Asian companies still experiencing difficulty to access
capital markets and still needing to diversify funding
sources;
• Therefore greater need for structured finance solutions
because of the risk mitigating characteristics.
16
TERMS OF REFERENCE
• How do they work?
–  Project which link trade and investment
– Structured finance deals for trade finance
• How much of a solution?
• Conditions for their wider use
• Links to underlying markets, which markets and
their robustness
17
KARNAPHULI US$423
MILLION FERTILISER
PLANT DEAL
Project which links trade and investment
OBJECTIVE:
To illustrate a structured finance
transaction embedded in a project
financing structure linking
trade and investment.
18
KARNAPHULI DEAL - THE BACKGROUND
• Funding of US$423 million sought by the
Bangladesh government to finance the engineering,
procurement, construction, operation and
maintenance works of a fertiliser plant in
Bangladesh.
• Typical project financing structure with payment of
the loan to be by way of the proceeds of the future
sale of urea and ammonia produced from the plant.
19
KARNAPHULI DEAL - THE CONSIDERATIONS
• How to link the borrower’s commercial activities
to its financial obligations; again using the
commodities not yet physically available as
collateral and payment.
20
KARNAPHULI DEAL - IN SUMMARY
Equity investors (of which
Government of Bangladesh
holds 41%)
Investment of
Export Credit Agency
7-10 year loan of US$ 423 million
US$130 million
Karnaphuli Fertiliser
Company limited Security over plant, site, property, equipment
Contract
to buy
full urea
output,
at
market
price
20-year gas supply contract
at price linked to urea output
Contract to buy full ammonia
output, at market price
Transammonia
(Switzerland)
Marubeni
(Japan)
Investment
insurance
cover
Bank
syndicate
Government guarantee
on performance of
BCGL
Bakrabad Gas
&
Systems (BGSL)
Guarantee to approve
escrow account and
make foreign exchange
available
Government
Payment for purchases
P
a
y
m
e
n
t
Escrow
account
21
KARNAPHULI DEAL - POINTS TO NOTE
• Debt/Equity ratio is high. Would conventional loan be
possible?
• The fertiliser company sold its production forward. A
Swiss and Japanese company agreed to commit themselves
to buy this entire production for an extendible period of at
least 7 years starting from the commencement of plant
operations. These 2 companies also agreed to deposit their
payments for the fertilisers in an offshore account, from
which the debt would be served. The banks took
additional security over the plant.
22
KARNAPHULI DEAL - POINTS TO NOTE
• Agreement for offshore escrow account needed to be
approved by the government of Bangladesh, which it did.
The government also agreed that it would not limit the
amount of foreign exchange available to this escrow
account, eg. by forcing the fertiliser plant to directly
repatriate its foreign exchange earnings.
• Financiers obtained insurance from a number of export
credit agencies which would be triggered if the government
interfered in the escrow account arrangement or otherwise
expropriate the plant.
23
KARNAPHULI DEAL - POINTS TO NOTE
• A 20 year agreement was signed between Bakrabad Gas
Systems, a government parastatal, for the delivery of gas,
the main input to the fertilizer production process. The gas
company promised the delivery of minimal annual amount
(which will ensure that the fertilizer company has sufficient
inputs to produce the required amounts of urea and
ammonium) and in addition agreed to tie the payments for
this gas to regional bulk market urea prices. As a result, the
fertiliser company automatically hedged one of its major
price risks, locking in a minimum profit and a certain
operational efficiency.
24
KARNAPHULI DEAL - POINTS TO NOTE
• The government in turn, guaranteed the gas
company’s performance.
• The banks ensured that their loans were indeed used
for constructing the fertilizer factory and not
diverted for other uses by using an independent third
party to approve all project expenditures.
25
KARNAPHULI DEAL - POINTS TO NOTE
• Further comfort over the operational efficiency of the
fertilizer plant was given by the fact that those
constructing the plant were willing to take part of the
equity. The Bangladeshi government retained 41.2% of
the equity, but more than half of the equity was held by
foreign companies (with a small part in the hands of local
investors). These foreign companies thus kept a strong
control over the future day-to-day management of the
facility, once it becomes operational.
26
TERMS OF REFERENCE
• How do they work?
– Project which link trade and investment
–  Structured finance deals for trade finance
• How much of a solution?
• Conditions for their wider use
• Links to underlying markets, which markets and
their robustness
27
Structured Deals for Trade Finance
OBJECTIVE:
To illustrate use of structured
finance techniques in trade finance.
28
COMPOSITION OF ASIAN EXPORTS
Economy
Year
Primary
Produce
(%)
Textiles and
other labour
intensive items
(%)
Electronics and
machinery (%)
Other
manufactures
(%)
Indonesia
1970
98.6
0.2
0.0
1.2
Malaysia
1994
1970
60.7
94.7
22.8
0.9
4.8
1.0
11.7
3.4
Singapore
1994
1970
29.4
71.2
8.3
6.8
44.4
8.0
17.9
14.0
South Korea
1994
1970
17.1
35.2
4.9
39.6
57.7
6.3
20.3
18.9
Thailand
1994
1970
8.1
94.0
22.2
1.4
34.5
0.1
35.2
4.5
1994
31.1
23.8
27.7
17.4
SOURCE : EMERGING ASIA – CHANGES AND CHALLENGES
29
THREE MAIN TYPES
• Export receivables backed financing
• Inventory financing
• Prepayments
30
EXPORT RECEIVABLES BACKED FINANCING
• DEFINITION: A loan is made with recourse to the
exporter whereby the security is provided by the
assignment of export sales contracts and receivables,
and the repayment comes from the export proceeds paid
by identified buyers directly to the lender.
• Is the basic form of structured commodity finance. The
other two namely, inventory financing and prepayments
are variants of the same theme – the future sale of the
commodity will provide the borrower with the means to
repay the financing.
31
EXPORT RECEIVABLES BACKED FINANCING
• Sale contract between exporter and importer
• Sales proceeds assigned to bank
• Against assignment, bank advances loan to exporter
• Export made by exporter to importer
• Importer makes payment to escrow account controlled by
bank
• Loan is repaid from escrow account
• Excess after agreed deductions released to exporter
32
INVENTORY FINANCING
• DEFINITION: A loan is made with recourse to the exporter
whereby the security is provided by an assignment of the
commodity stored (or about to be stored) in a warehouse
and the repayment comes from export proceeds paid by
future buyers directly to the lender.
• It is the only structured finance solution, if the exporter has
not identified a buyer yet.
• Can be used by importer to obtain pre-shipment finance to
pay for a portion of the cost of imported commodities
pending re-imbursement from its sale.
33
INVENTORY FINANCING
• Exporter puts goods in warehouse
• Bank takes security interest over goods in warehouse
• Goods inspected and security interest perfected
• Bank makes loan to exporter
• Exporter sells goods
• [If necessary Bank obtains top-up goods and gives order to
warehouse for sold goods to be delivered to buyer]
• Buyer pays sale proceeds into escrow account
• Bank is repaid from escrow account and excess after agreed
34
deductions release to exporter
PREPAYMENT
• DEFINITION: A loan is made without recourse to the buyer
for prepayment of the commodity sold by the exporter
whereby the security is provided by an assignment of the
prepaid export sales contract and by an assignment of the
commodity stored (or to be stored) in a warehouse and
whereby the repayment comes directly from the buyer.
• Used when relationship between the buyer and the exporter
is strong eg. when the exporter is a subsidiary of the buyer.
Is generally with limited recourse and buyer is responsible
to service loan only if commodity is delivered.
35
PREPAYMENT
• Sale contract between exporter and importer providing for
prepayment by the importer assigned to Bank
• Bank inspects goods for purposes of loan to importer to
enable importer to prepays goods to exporter.
• Bank takes security over goods stored in warehouse upon
prepayment. Can make advance without security over goods.
• Importer sells goods to sub-buyers with sub-sale proceeds
from sub-buyers assigned to Bank
• Goods released from warehouse against payment paid to
Bank with excess split between exporter and importer. 36
TERMS OF REFERENCE
• How do they work?
– Project which link trade and investment
– Structured finance deals for trade finance
•  How much of a solution?
• Conditions for their wider use
• Links to underlying markets, which markets and
their robustness
37
HOW MUCH OF A SOLUTION?
• Trade & project finance perspective
– By comparing characteristics of traditional vs.
structured trade & project finance
• Asset backed securitisation perspective
– Seen from the borrower or seller of the assets for
purposes of a securitisation program;
– Seen from the financier or investor in a securitisation
program; and
– From the perspective of other participants
38
TRADE & PROJECT FINANCE PERSPECTIVE
TRADITIONAL vs STRUCTURED FINANCE
• Traditional financing rely heavily on creditworthiness of
borrower and not the payback from the borrowed funds.
Structured Financing relies heavily on the payments to
be received from the transaction being financed. The
transaction is structured such that the repayment of the
loan is automatically made via the transaction proceeds
– NB: Traditional financing may require the purpose of the loan
to be approved but is generally not concerned with the
profitability of the transaction. In Structured Finance
performance of the transaction is key and must be carefully
evaluated and controlled.
39
TRADE & PROJECT FINANCE PERSPECTIVE
TRADITIONAL vs STRUCTURED FINANCE
• Traditional financing require a strong balance-sheet. In
Structured Finance the reliance is on the soundness and
merits of the transaction and not the balance sheet.
• Borrowers must provide chargeable assets to give
financiers the comfort they need in event of a default.
Borrowers must equally provided chargeable assets in
Structured Finance. The assets however are limited to
and usually related and specific to the transaction.
40
TRADE & PROJECT FINANCE PERSPECTIVE
TRADITIONAL vs STRUCTURED FINANCING
• All direct and indirect (in varying degrees, depending on
the financier, country and borrower concerned) factors
relating to the borrower taken into account in Traditional
Financing. In Structured Financing all direct and
indirect factors relating only to the transaction in
question and not the borrower are taken into account.
• Country risks can be a deal-breaker in Traditional
Financing. Country risks is surmountable in Structured
Finance provided the performance and risk of the
transaction is acceptable.
41
TRADE & PROJECT FINANCE PERSPECTIVE
TRADITIONAL vs STRUCTURED FINANCING
• Expertise required in Traditional Finance are relatively
straightforward. Specialised and broad-based expertise
required in Structured Finance deals and degree of
difficulty higher compared to Traditional Finance.
• Cost of Traditional Finance can be high compared to
Structured Finance because both direct and indirect
factors are taken into consideration. Up-front cost is
high in Structured Finance, but because of the lower
cost of funding, overall cost can be lower than that in
Traditional Finance.
42
STRUCTURED FINANCE
COFFEE IN KENYA – 3 MONTHS CREDIT
No Structured Finance With Structured Finance
Value of Goods
US$7,000,000
US$7,000,000
Advance Rate
50%
Loan Proceeds
US$3,500,000
Interest rate pa
LIBOR + 15%
LIBOR + 2.5% (Savings in
interest charged over US$
3.5 mil = US$120,000)
Storage/insurance/inspection &
other professional fees
1.7%
2.55% (Additional upfront
fees US$ 59,000)
Total storage etc. etc. & interest
costs
US$304,000
80% (increased utilisation
of assets by 30%)
US$5,600,000 (Extra
credit US$2.1 mil)
US$298,000 (Savings
achieved, US$6,000)
43
ASSET BACKED SECURITISATION PERSPECTIVE
BORROWER/SELLER
• Off balance sheet funding and removing assets allows
borrower/seller to achieve better financial ratios.
• Cheaper funds given the higher credit quality of the
segregated and credit enhanced assets.
• Allows access to capital markets which may otherwise
be unavailable, therefore providing alternate funding
source.
• Provides liquidity and cash for otherwise illiquid
assets
44
ASSET BACKED SECURITISATION PERSPECTIVE
BORROWER/SELLER (con’t)
• Allows efficient matching of maturity profile and
interest rate of segregated assets charged with
principal and interest payable to investors.
• Possibility of fee-income to borrower/seller since
borrower/seller is likely to be retained as manager of
assets sold of assets not recognised in the balance
sheet.
• Risks in assets transferred to others who can better
managed risks.
45
ASSET BACKED SECURITISATION PERSPECTIVE
FINANCIER/INVESTOR
• Permits diversification to new asset class which is
liquid and which may not otherwise be available.
• Allows institutional investor to match assets and
liabilities by acquiring assets which suits its cash flow
and maturity requirement
• Securities issued pursuant to a securitisation program
offers higher returns than other corresponding rated
securities.
46
ASSET BACKED SECURITISATION PERSPECTIVE
OTHER PARTICIPANTS
• Fee income
47
ASSET TYPE BY COUNTRY
Asset
Type
Auto
Loans
Credit
Cards
Mortgage
One
Proper
-ty
Country
Hong Kong
Indonesia
X
X
X
X
X
X
Malaysia
Philippines
Thailand
Singapore
X
X
Toll
Road
Trade
Receiv
-ables
Proj
-ect
Oth
-ers
Finance
X
X X X X
X X X
X
X
X
X
X
48
DISADVANTAGES OF STRUCTURED FINANCE
• Complexity; and increased transaction costs.
• Therefore an appropriate alternative to
traditional secured finance if lower cost of
funding and other benefits achieved (eg. where
financing would not otherwise be available or
increased quantum of loan).
49
TERMS OF REFERENCE
• How do they work?
– Project which link trade and investment
– Structured finance deals for trade finance
• How much of a solution?
•  Conditions for their wider use
• Links to underlying markets, which markets and
their robustness
50
CONDITIONS FOR THEIR WIDER USE
• Available of Good Collaterals
– Therefore the question what are the attributes of a
good collateral
• Conditions specific to trade and project finance
• Conditions specific to asset securitisation
51
ATTRIBUTES OF A GOOD COLLATERAL
• Standard and quality which can be independently
certified to ensure marketability. Reputation of the
certifier is important.
• Market transparency to enable real value of collateral to
be determined and to allow for price risk management.
Ideally collateral is quoted on an exchange.
• Deliverability to an organised market place to prevent
deterioration in quality and price and other liquidation
costs. (NB: In a forced sale situation, discount can be
large.)
52
ATTRIBUTES OF A GOOD COLLATERAL
• Good and safe location ensuing that appropriate and
good storage facilities and that if the bank needs to
liquidate, it can obtain and sell the collateral and
receive the currency it requires.
• Good durability providing security that, if the bank
has to liquidate, delays do not have a negative impact
on its value.
53
ATTRIBUTES OF A GOOD COLLATERAL
• Reasonably low price volatility providing security
that the value of the commodity, even if not
hedged, will continue to be sufficient to cover the
loan. The more perishable and volatile the price of
a commodity is, the riskier it is to store. If a
distributor cannot know what the price is when a
sale is made, he may have to cover part of this risk
by futures or options.
54
TRADE & PROJECT FINANCE CONDITIONS
• The Right Financier
• Available and Reliable Information &
Know-how AND
• Good Risk Analysis AND Control
55
THE RIGHT FINANCIER
• One who is able to identify quality recurring trade
flows and the participants to these trade flows.
• Has global connections of suppliers and buyers.
• Is well positioned on both sides of the trade flow.
• Has good information sources (accurate information
can be more important than the collateral)
56
THE RIGHT FINANCIER
• Has the appropriate appetite for risk, the necessary
knowledge & expertise and the use of special
techniques.
• AND who is able to support these trade transactions
by making use of
– Normal trade finance instruments
– Futures and derivative markets.
– Expertise to keep financing close to the trade flow.
57
THE CONCERNS OF THE RIGHT FINANCIER
• Are returns interesting enough?
• Is the financier comfortable with all the risks
and are there good collateral to back-up the
risks involved ?
• (For bank financiers) Does the “reserve
requirement” permit doing the deal?
• (For bank financier) Does the bank have
enough “lines” to take the “country risks”?
58
INFORMATION
• Product and market information
• Country information
• Information on the relevant parties (producers,
buyer and seller and all intermediaries involved in
the entire chain) in terms of
– Management team of the relevant parties, their
knowledge, abilities & experiences
– their reliability, ability to deliver the right goods on time
& payment track record
– Risks control systems
59
KNOW-HOW
• Inventiveness and creativity
• General knowledge of traditional financing methods
• Specialist knowledge of non-traditional financing
techniques
• Experience (can be more important than qualifications)
• Contacts, network & knowledge of capabilities of contacts
and network, a differentator
• Documentation skills
• Good risks analysis & transaction management skills
60
ASSET BACKED SECURITISATION CONDITIONS
• Same factor of right financiers, availability &
reliability of information and know-how
• Presence of legal/regulatory framework
• Availability of data
• Depth of investor bases
• Availability of good rating agencies familiar with
markets
• Appropriate Central Bank policies
• Seller system capabilities
61
TERMS OF REFERENCE
• How do they work?
– Project which link trade and investment
– Structured finance deals for trade finance
• How much of a solution?
• Conditions for their wider use
•  Links to underlying markets, which markets
and their robustness
62
THE UNDERLYING MARKETS
• The markets involved bond market, money and
foreign exchange market, commodities, energy
and transport market and the equity market
• Above all the derivative markets in each of these
markets
63
MARKETS IN TERMS OF PLACEMENT
• International Private Placement Market
• International Public Bond Market
• Bank Loan Market
• Asset Backed Commercial Paper Market
• Local Markets
64
HOW ROBUST?
• Matured or emerging market and their efficiency?
• Challenges of emerging markets
– Historical sectoral data for benchmarking asset performance does not
exist or is not disclosed;
– Historical portfolio data for estimating performance on a securitised
pool does not exist or is not disclosed;
– Macro-economic change is volatile with possible adverse financial
impacts to the seller or the portfolio;
– The legal framework does not resemble what investors are familiar
with
– The regulatory and political model is different, with unexpected
consequences
65
THE APPROPRIATE CONSIDERATION
• The robustness of the specific deal AND NOT
the market.
• To achieve robustness all aspects of a specific
deal and its structure must be examined
specifically.
• A deal from a matured market can possess
“emerging market” characteristics whilst a deal
from an emerging market can possess “matured”
market characteristics.
66
WHAT ASPECTS OF THE DEAL?
Transaction
Analysis
Physical
Aspects
Risk
Analysis
Documentation
Performance
Monitoring
Physical
Aspects
Documents
Process
Documents
Process
Fund Flow
Process
Fund Flow
Process
Key Players
Involved
Key Players
Involved
67
CONCLUSION - THE WAY AHEAD
• Structured finance is the way ahead - HOWEVER
• One needs knowledge, experience and skills which
are broad-based as well as specialised.
• Thus the need in most cases, for a team.
• The start-up effort and cost for the formation of
such a team is beyond most private entities
(especially the SME or developing countries)
• Therefore the need for a special unit or agency at a
national, regional AND international level.
68
CONCLUSION - THE WAY AHEAD (con’t)
• The national agency would serve the specific interests of
its exporters and nationals which competes with others.
• Countries can opt to share expenses of the regional
agency to address their common needs peculiar to the
Asia Pacific region, like
– Gathering and disseminating information;
– Providing education;
– Gathering and making available expertise to countries sharing
costs of agency at a cost not otherwise available commercially;
– Building network specific to the region.
69
THE END.
THANK YOU FOR LISTENING.
by David Hew
Tel:(65) 2501211; Fax: (65)2501277; E-mail: apcasec@singnet.com.sg
© David Hew 2000. All rights reserved
The information contained herein should not form the basis of
any decision as to a particular course of action; nor should it
be relied on as advice or regarded as a substitute for detailed
advice in individual cases. The services of a competent
professional adviser should be obtained in each instance.
70