Chile: Doing deals the old way

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Chile: Doing deals the old way

If you were trying to scupper the career of an over-zealous colleague, this is the sort of financing mandate you might want to throw in their direction: first, make it a commodity deal (preferably not oil which is suddenly showing signs of revival); second, set the deal in a developing country, at a time when emerging markets are out of vogue, and local currency financing is scarce. Finally, throw in a little political difficulty, such as the arrest of a former president, which leads to fighting on the streets and the threat of trade sanctions.

Nobody is suggesting that Deutsche Bank's London-based international trade finance team is unpopular with its colleagues, but these are just a few of the elements which they had to overcome in a deal for Empresas Nacional de Minería (Enami) in Chile.

At the beginning of the year the state-owned copper, gold and silver mining company was looking for a pre-export financing facility of up to $60 million. Enami acts as an intermediary between Chilean mining producers and the international market. It is the official vehicle through which the government subsidizes small and medium-size mining companies. Even though copper prices remain weak and the Chilean peso was coming under pressure, the government was unwilling to give any explicit guarantees for further borrowing.

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