TNAG-2411-FCO40-3506-Proposed-airport-in-Macao-(Macau)-1992 — Page 25

CONFIDENTIAL

HKA

182144

CONFIDENTIAL

FM FCO

TO DESKBY 18013OZ HONG KONG

TELNO 1236

OF 171722Z AUG 92

INFO IMMEDIATE PEKING, UKREP JLG HONG KONG

INFO IMMEDIATE BTC HONG KONG, LISBON

8

131231

MDHOAN 9074

TOP COPY Q DIST?

MACAO AIRPORT: SECURITY REQUIREMENT BY EXPORT CREDIT AGENCIES

SUMMARY

1.

ECGD SAY THAT THEY WILL REQUIRE SATISFACTORY SECURITY FROM OUTSIDE MACAO (EG A FIRST CLASS BANK GUARANTEE) FOR PROVIDING CREDIT FOR CONTRACTS RELATED TO THE MACAO AIRPORT WHICH HAVE A REPAYMENT PERIOD BEYOND 1999. ECGD AND OTHER EXPORT CREDIT AGENCIES (ECAS) VIEW THE BANK OF CHINA AS SUITABLE. POSSIBLE

IMPLICATIONS FOR HONG KONG. VIEWS SOUGHT DESKBY 18093OZ.

DETAIL

THE

2. CONSORTIA, INCLUDING BRITISH COMPANIES, ARE SEEKING ECA SUPPORT FROM CURRENT PROJECTS RELATED TO THE MACAO AIRPORT. BUYER/BORROWER (COMPANTIA DE AEROPORTO DE MACAU (CAM)) HAS OFFERED THE FOLLOWING SECURITY FOR LOANS UNDER WHICH REPAYMENT

WOULD GO BEYOND 1999

A

CORPORATE GUARANTEE FROM CAM

- SHORTFALL GUARANTEE FROM THE GOVERNMENT OF MACAO (UNTIL 1999 ONLY)

3.

ECGD, AND WE UNDERSTAND OTHER ECAS, FIND THIS SECURITY INADEQUATE. CAM IS A CORPORATE BODY SET UP SOLELY FOR THE AIRPORT, AND ECAS ARE UNWILLING TO UNDERWRITE THE VIABILITY OF THE PROJECT. TO SUPPORT THE BUSINESS ON EIGHT AND A HALF YEARS CREDIT, TAKING THE RISK TO 2003, ECAS HAVE

STIPULATED THE NEED FOR SATISFACTORY SECURITY FROM OUTSIDE MACAO, EG A FIRST CLASS BANK GUARANTEE. THE AMOUNT INVOLVED IS A FEW

TENS OF MILLIONS OF POUNDS.

4.

ONE OF THE BRITISH COMPANIES CLAIMS THAT A FOREIGN COMPETITOR HAS OFFERED FINANCE ON THE STRENGTH OF THE ABOVE SECURITY TO 1999, SUPPLEMENTED BY THE GUARANTEE OF THE BANK OF CHINA FOR LATER MATURITIES. WE UNDERSTAND THAT THE PORTUGESE ECA WOULD BE CONTENT WITH THIS: BUT WE DO NOT KNOW WHETHER THE

1

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