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NoEasy, thanks for the links. I thought I'd feed in what I'd seen on similar guarantees...I believe this may be relevant and a reasonable stab at how it might work, but can't guarantee that (ba dom bom). My experience is with similar govt guarantees but not these specifically, hence the potential for difference. The guarantees I've worked on are all tied into project financings though, so that's common.
There are normally 2 costs:
- Upfront all on close or often negotiated only on drawdown based on ~X% of the drawdown . The X% I've seen as high as 16%, and at the low end 7%. There's structural reasons for the stuff I do to be considered higher risk, so I'd hope for 7% or lower here. The X% is able to be funded by the loan, so the way to think about it is with a $100m facility with 10% premium, you roughly only get to draw $91m to fund capex and the balance of $9m is used to "pay" the upfront premium. Ie You're paying $100m, but you're only getting a $91m toy. You only really pay the $91m when you repay the loan. In the documentation you posted, that may be considered the guarantee arrangement fee...but I don't normally see that term specifically being used.
Ongoing guarantee fee - I've seen 40 to 75bps. This you see as a part of the interest calculation and paid every 6 months and can often be buried in numbers on the lenders side within their margin.
"They'll be at it with the white puddin supper next"
If they do, I'll emigrate......to Engleterre NE lol.
Prost
SL
A jock falls over........ claims for £10k's of comp and sets us back!
can't wait to get out of EU.......!
All the best (I wish him, and his family well :)
again probs.........!
NoEasy In anser to your 11.17 post youi have clearly overestimated HMG's response in this endeavour.
LL, Like many Brextremists you don't have much of a clue about the impacts of not having a deal with the EU. Even the Leave Alliance have this to say about WTO,
One can say, unequivocally, that the UK could not survive as a trading nation by relying on the WTO Option. It would be an unmitigated disaster, and no responsible government should allow it. The option should be rejected.
More than likely LL you just don't care about the impact upon the hundreds of 000's jobs at risk as you've no doubt worked out you'll be ok. There is no reason why the EU must capitulate in order to trade with us. They might just say Foff, and who would blame them? Its a high risk strategy to hope they will back down in order to trade with us. The Good ol' Blighty bull**** will count for nothing when push comes to shove. The fact is we need the EU more than they need us. This most inept government in history has us hurtling towards the status of a third world country. Currently we are part of the world order EU/US/China/Russia. Next year we will be on the outside looking in, no doubt fluffing up Trump for favours. How can that possibly be in our national interest?
First 1/4 2019 I'd be expecting the SXX sp to be at a rather exciting stage in its upward trajectory. I worry now the carpet is going to be swept from beneath our feet as the economic catastrophe begins to bite !
I am not in favour of brexit but accept we are leaving, The problem is the political landscape is bereft of talent capable of delivering such a complicated negotiation. It is hard enough trading with our "EU Friends" as a member state, I hate to think what it will be like as a non member whether under WTO rules or a negotiated deal.
In my view the government should have first prepared to exit on the basis of no deal and trade under WTO and having prepared for such said to the EU if you want a trade deal this is what we require. Instead they have pi55ed about with an election, went horribly wrong, and, then pandered to the requirements of the EU.
A complete shambles but not surprising since that "Tw*t Cameron" (to quote danny dyer) held a referendum because he was scared of UKIP and then effed off when it went wrong.
Oceanfox, As an example, take a look at the costs that were met by the banks for gaining public monies. The bank bail outs werent for free.
At least the gov know they know nothing of which they speak of.
That’s a darned site less worrying than the tea shack politicians here!
Just thought........!
can we claim that fee back against tax (commercial) and if not why not.............!
All the best.
An insurance policy to the lenders, and so our insurance, to HMT benifit........!
money merry go round eh.......!
All the best (money for old rope........ typical..!)
The fee charged for guarantee by HMT appears to be a secret so far. I suspect it will not be cheap as it is essentially an insurance policy
A no deal would cause absolute chaos ??.....no it wouldn't.....no deal is just badly named....no deal is , THE DEAL......virtually all trade with eu is done with WTO rules....the airplanes still fly etc....just look at the airbus nonsense....under wto rules there are no tariffs on aircraft parts......look what happens when a container ship arrives at a uk port from non eu....95 percent are cleared for release within 10 minutes....software notifies various government agencies ,four hours from port.....currently trucks at dover , roll on and roll off, but same software can be used for uk .....lots of countries trade with Europe without letting un elected officials impose laws on them......so can we ,it's up to Brussels if they want to cooperate with one of their largest trading partners .....
Hope. The sort of emotion that, rather than pull up the drawbridge and leave myself in splendid isolation, would lead me to prefer to work from the inside in order to be able to mould and shape an objective to better suit my needs.
per ardua ad astra
Wrt cash flow....i understand that sales of poly will commence prior to the mine actually going into production (using the excavated material extracted during construction of the mine shafts)
OR/PAAA - You both seem to be working that politicians are either adults or capable of anything approaching an adult discussion. May I ask what is the basis for such a presumption.
‘’they fail to start real negotiations’’
.....
Good morning, OR. Considering it is we who have decided to leave the union, in an ‘adult’ situation is it not entirely correct that it should be us whom suggest what we want from our decision - rather than wait for the other members to draw up for us the terms of our leaving for us? That’s hardly ‘taking back control’ is it! And since it has taken our divided government over two years since the referendum to draw up a set of conclusions anything like being able to be agreed (two senior Cabinet jobs later), I’d say it’s a bit much so suggest that it is the other members duty to ‘’start real negotiations’’.
Further, in the ‘adult’ negotiations you envisage, wouldn’t it be somewhat more conducive to productive negotiations if participants desisted from using unnecessarily inflammatory rhetoric such as ‘roll over’, when clearly neither side would be realistically expecting any such thing?
Cheers,
per ardua ad astra
A no deal scenario will only arise if the EU are so worried about losing the U.K.’s money that they fail to start real negotiations. We cannot simply roll over and accept their terms without adult negotiations.
OR
There's absolutely no chance a no deal scenario is already priced in. Despite considerable evidence to the contrary, a bull market is anticipating a sensible outcome that will minimise disruption to the economy as much as possible. A no deal scenario would cause absolute chaos — from the potential for food and medicine shortages to flights being grounded. On the trade front, without regulatory cooperation some sectors could lose their rights to operate, with areas such as financial services badly hit and intellectual property rules stymied. Further, those sectors not caught up in a regulatory nightmare will find exports to the EU would automatically be subject to the EU’s common external tariff; with all that entails.
No, rest assured an Armageddon scenario is not priced in whatsoever. No doubt a cause of much regret is that all this self inflicted harm was entirely avoidable. Anyone who voted leave without factoring in the political administration involved in untangling 40 years of cooperation and harmonisation - with all the attendant potential for chaos involved - either did so without deliberating thoroughly before coming to a decision, or worse, didn’t consider such a situation quite worthy enough when compared to their very own swivel eyed wet dream.
Cheers,
per ardua ad astra
Stokey12, I get what you mean, i guess all old trade deals will be moved to the new agreement, what ever that may be, to be compliant to UK law when it happens.
OzinHK - My concern is less of any action by the EU in relation to tariffs my concern is that any Free Trade Agreement would be delayed if certain amendments were to be passed. My principal concern is that say HMG are negotiating, or intending to negotiate, a free trade agreement with Brazil whihc would see tariffs agreed which are lower than in an agreement with the EU. If some of the amendments were to be passed we would need to wait while the negotating mandate is agreed by Parliament before the agreement is negotiated. That is just one area of potential delay.
Is the bad deal/no deal not already priced into the market as there was no guarantee that we would be getting a good deal from the EU in the first place.
Stage 2 would be well and truly announced by then (I would hope!) so the correlations may change, but the current Beta (rate of change in price) compared to the FTSE is 1.35. So a 1% drop in the FTSE should price in at a 1.35% drop in SXX.
I suspect that the share price will trade sensitive to potash and general commodity prices more than any Brexit deal by next March as the risks will primarily be commodity price and ability to build on budget and on time. I dont see the EU putting tariffs on imports, for example, on any Brexit deal.
Oceanfox
I'd be interested to hear posters thoughts on the likely impact upon the ftse generally of a confirmed 'bad' deal or a 'no' deal come next March.
I'd like to think SXX would be relatively unaffected and it might even be considered a safe bet for holders of other stock more directly affected. Might investors run here for cover thus keeping our sp at stable or would we part of a stock-wide crash?
I don't think we can trust anyone currently in government or opposition to tie their own shoelaces yet alone negotiate the most complex event in our lifetime. They seem to hate "Business" and thats worrying.
Agree with this post and the previous, this government is in disarray, quite worrying, regards Jesse