1. Alan Andrews
Vice President,
Global Trade, PNC Bank
Banking in the United States for Turkish Investors – Financial Resources Available

2. PITTSBURGH STEELERS –SUPER BOWL CHAMPS!! 2006

3. Tunç Ilkin
12 years with Pittsburgh Steelers
Pro Bowl Honors ‘88, ‘99

4. Who is Owns & operates banks in 8 states and the Washington D.C.
13th largest bank in the United States
Established in 1860
Head Office located in Pittsburgh, PA
Assets of US$93.2Bn
Owns & operates banks in 8 states and the Washington D.C.
Listed on the NYSE - PNC
One of the 15 largest banks.
We are not well know like other international banks that you have heard. In international banking we are a niche bank. Our niche is financing of US exports with the support of Ex-Im Bank.
A: In terms of Ex-Im Bank transactions, …..

5. Who is Finance companies from start-up to $5 billion in revenue
ATMs: 3,600
Total staff: More than 23,000 in 27 U.S. states and overseas locations
Customers: 2.9 million consumer and Small and Medium Sized Enterprises (SME’s = Family Businesses)
PNC ranks as 9th largest Small Business Lender in the USA
One of the 15 largest banks.
We are not well know like other international banks that you have heard. In international banking we are a niche bank. Our niche is financing of US exports with the support of Ex-Im Bank.
A: In terms of Ex-Im Bank transactions, …..

6. Who Are We?

7. SME’s = Family Businesses
In the USA, SME’s comprise 97% of U.S. exporters
SME’s create 70% of new jobs in America
SME’s account for only small share of U.S. exports
SME’s desire to grow through exports
Untapped potential !

8. Why Are We Here?
PNC has increased its resources and services that specialize in international banking, evidenced by:
In 2005, PNC awarded the Presidential “E” Award.
In 2005, PNC selected by the U.S. Department of Commerce as first financial partner to help SME’s grow internationally.
In 2005, PNC largest user of U.S. Export-Import Bank programs.

9. Why Are We Here?
Provide attractive financing to Turkish SME’s that are investing in U.S. SME produced capital goods and services

10. Actual Case Study #1
U.S. manufacturer of environmentally friendly “supercritical fluid solution” systems
4 Turkish SME’s in SÖKE form new company to invest in this new technology to extract oils from flax and herbs – US$1 million
5-year PNC financing
Unique and challenging structure

11. Actual Case Study #2
U.S. manufacturer of plastics extrusion systems
Turkish SME in Izmir invests in this technology with PNC financing for 5 years to extrude plastic parts for automobiles – US$1.5 million
New $3mm investment planned for

12. Financing Solutions
Medium term financing – up to 7 years
with U.S. Export-Import Bank support
The least expensive way to finance U.S. equipment purchases

13. Machines and equipment - new or used Services that can be capitalized
Which Goods Can be Financed Medium-Term?
Machines and equipment - new or used
Services that can be capitalized

14. Borrower Benefits Medium Term Financing
Low interest rate – US$ LIBOR or € LIBOR base All-in annualized rate of 6.2%-8.5% p.a.
Flexible Terms
Payment terms of up to 7 years for end users
No need for collateral
No local bank guarantee or L/C
Semi-annual repayments
Grace period (up to 18 months)

15. Information Required
Last three years of financial statements
Financial information must be audited if request is US $ 1 million or larger
Project information
Business activities of borrower
“Good” credit references

16. OTHER U.S. Government support
OPIC
Targets US Joint venture in Turkey that may result in US exports; products mfgd can be exported back to US
small business focus
insurance, direct loans

17. Banking in the U.S.??
Most US banks tried to have specialized groups (Foreign Direct Investment - FDI) internally covering all foreign investment But…
Too differentiated, too unique
Most now handle as normal course of their business

18. Banking in the U.S.??
Opening accounts
A bit more than what we would require of a US co.
Patriot Act validation (OFAC) & AML documentation – hour turnaround
Basic KYC: to ESTABLISH IDENTITY most important, purpose of the account, source of funds (evidence)
DEPENDS on Type of Entity, incl. Articles of incorporation; Partnership Agreement; official documentation; Copy of By-Laws, Incumbency Cert.(who officers are) Corp. Resolution
Tax Forms – W-8
Turkish Bank or counsel REFERRAL helps
No U.S. Address? (special circumstances –agents, overseas lending), challenging

19. Banking in the U.S.??
Opening accounts
Physically present self…again - KYC!
Probably no different that other OECD country governmental requirements

20. Banking in the U.S.??
CREDIT
All types and sizes – depends on entity (business Life cycle) and needs
Secured, unsecured, Working Capital, equipment financing, leasing, real estate lending
Business Credit Card, Business Insurance (property & casualty, risk mgmnt svcs); Employee benefits (401k, workplace bkg,etc.)
Personal Bkg - Checking & Savings, vehicle loans, credit cards, home mtgs.
Investments – Brokerage Svcs, Stocks, Retirement Planning, Savings plans

21. Banking in the U.S.??
CREDIT
Controlled Block Agreement (also called Blocked Account Agreement or Deposit Access and Control Agreement)
3rd party or pvt lender (can be overseas bank)
Lender requires lockbox set up by PNC to control sale proceeds – high cost, but available or
Turkish bank standby L/C with beneficiary being PNC to support local sales office borrowings

22. Banking in the U.S.??
Cash Flow
The right type of checking accounts
The right type of money Mkt, and Business LOC
Merchant Services
On-line money mgmnt services
On-Line FX
On-Line Trade Services

23. Banking in the U.S.??
Leveraging US Federal Gov’t Programs and State assistance Programs – wide variety – for start-ups, commercial real-estate, equipment inventory and working capital
Typically less stringent requirements as to equity and collateral
Lower down payments, and longer terms
PNC Bank is an SBA preferred lender

24. Banking in the U.S.??
Relationships still important
Find your CHAMPION!!

25. Actual Case Study #1
Etimine USA, Inc. (sub of Eti Aluminyum)
Importer of boron, chemicals and ferrochrome for steel industry in U.S., 5 direct employees, approx $20mm sales currently
Has substantial deposit accounts at PNC, currently no borrowing (industry doing very well now, has borrowed in past, small amounts <$100k, unsecured), originally wanted $500k LOC “because it is largest aluminum co in Turkey” …(it doesn’t work this way)

26. Actual Case Study #2
U.S. Electro-Fused Metals LLC
Brazilian mfr of metal coatings ($12mm in sales in BZ)
1st met w/Real Estate Development Fund, intro’d to PNC lender, who reached out to PA Dev Authority, recvd $3.4mm 15 year plant loan jointly w/PNC, workig cap of $1.5mm, on line bk svcs, personal bkg, now US has $20mm in sales and is largest revnue generator of group
No personal gtees, no parent gtee – all domestic liens
WIN-WIN situation

27. Actual Case Study #3
LEEDS INC.
$12mm-in-sales U.S. importer/distributor of promotional items, bought by large French firm; PNC taken out of credit by aggressive European lender
Co found borrowing from Euro bank too cumbersome
PNC structured $10mm LOC secured only by A/R
Lockbox, purchasing card, merchant svcs
Canada lockbox for Canada sales
Unique and challenging structure

28. Actual Case Study #4
PROMINENT FLUIDS, INC.
German owned mfgr of pumps; 20-year relationship with PNC. Originally we financed plant development with PA state assistance, and parent gtee.
Now, $3mm LOC extended against inventory and A/R, large FX dealings, all Treasury management Services on-line…no personal or corp gtees but does have a subordination agreement of parents credit to US company

29. Contact Alan D. Andrews Vice President and Manager Global Trade
PNC Bank, N.A.
Two PNC Plaza
Pittsburgh, PA
office
fax