Deutsche Bank offers an alternative for corporate borrowing within the GCC

The growth in corporate borrowing in the MENA region is fuelled mainly by infrastructure projects in the GCC and met by the huge lending appetite of banks in the region. However, the capacity to finance more than an estimated US$1 trillion in future projects is finite, forcing lenders and borrowers to increasingly look to new sources of finance such as Islamic bonds.

Supporting this trend, Deutsche Bank has developed Structured Trade & Export Finance (STEF) which offers a funding alternative that incorporates tailor made, often-complex, financial solutions with substantial in-built risk mitigation in support of cross-border trade transactions covering the export of goods and services either to or from the Middle East over short to long term tenors, typically 1-15 years.

Borrowing against trade finance contracts provides a further source of funds that can create a balanced portfolio. In addition, the trade finance market is less volatile both in terms of price, as well as availability and tenor, than bond or syndicated loan markets.

Corporate borrowers would be able to use trade finance to establish a track record and credit history that enables them to access the trade finance market relatively quickly. In times of reduced liquidity or increase in perceived risk, the trade borrower with a track record will be relatively well insulated.

Deutsche Bank is currently mandated to provide US$1 billion of STEF business in the GCC and has provided more than US$6 billion in STEF since 2000 to GCC companies.

Nadim Zaman, Head of GTB for MENA, commented;

"Deutsche Bank clearly realises the importance of the MENA region as the market continues to mature and capital flows into and through the region continue to grow. We have taken care to structure offerings to our clients here that support the increasingly global nature of the region and deliver a proposition that links payments; trade; liquidity management; and information delivery in such as way as to maximize the accessible efficiencies and magnify their impact with consolidation of dollar, euro, and multi-currency funds flows."