JLS Capital Strategies, LLC

Thought Leadership

Industry news and trends

JLS Newsletter - Latin America -TXF Americas 2018 Edition

In advance of the upcoming TXF Americas Conference in Miami, for which JLS Capital is proud to be a sponsor, this edition of our newsletter focuses on energy investment in Latin America-- a story of increasing opportunity and persisting risks.

Higher oil prices are improving the environment for oil and gas investment, though price volatility remains an inherent risk. As in the past, prices for commodities gold, copper, and other commodities have tended to rise with oil prices, fueling a resurgence of mining investment in the region. However, investment in these broader sectors may be hampered by political forces, largely stemming from upcoming general elections in several key markets. 

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Miki FlamenbaumComment
JLS Newsletter - Project Finance 2017

2017 BRIEF
For our final newsletter of 2017, JLS Capital would like to highlight a few of the year’s prominent energy sector trends that have affected the project finance industry. Through Q3 2017, global project finance investment volume totaled approximately $184 billion, with nearly two-thirds of this activity concentrated in Europe and North America (See Exhibit 1). This activity represents a decrease of 15% compared to the first three quarters of 2016.

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Miki FlamenbaumComment
The Liberal Art of Project Finance

For many of us, the Thanksgiving and upcoming winter holiday break mean the return of children from college and – at our house - opportunities for greatly appreciated parental guidance on the value of the liberal arts educations children are receiving.  Actually, guidance may be less than fully appreciated.  To those who are steeped in coursework on literature, philosophy, history, language, quantitative reasoning, and other enjoyable but seemingly impractical pursuits, it all seems quite theoretical — just another set of parental lessons to be filed away.

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John SchusterComment
Your Project’s Just Not Into You

I have been struck recently by a large number of stalled projects.  You see them – literally – driving along the road in certain parts of Africa and Asia. They are evident in available statistics and from the number of parties calling for help.  The trend isn’t surprising, given chronically low oil and commodity prices, which have just dropped again.  What is noteworthy is how developers and lenders respond:  Things have gone wrong. Various problems have emerged such as loan defaults, project degradation, and permit lapses.  Yet, project parties want to continue as they were.

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John SchusterComment
THE ART OF THE DEAL REVISITED: PART II

Experience is the hardest teacher because it gives its tests first and its lessons afterwards.  After the big test in late March on how to pass complicated health care reform, the lesson has clearly been that the business promotion and poker playing techniques many associate with deal making are not useful in the legislative process.   Instead, let’s add legislation to the realms where project finance style negotiations would be more effective. 

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Miki FlamenbaumComment
End Ex-Im Bank’s Wild Ride – A Proper Budget Review Will Help Ex-Im Bank Get America to Work

Export-Import Bank employees and supporters had a real roller coaster ride last week. Following a February 9, 2019 announcement by Senator Heitkamp of North Dakota, that President Trump, had agreed to restore full lending powers to the Export-Import Bank, there was speculation that President Trump would use his February 17 speech to Boeing workers at its South Carolina plant to announce a new board member and a return to business for Ex-Im Bank.  His speech even noted that U.S. exporters would soon again be on a “level playing field” with foreign competitors, borrowing a key phrase from Ex-Im Bank’s mission statement.

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Miki FlamenbaumComment
Ex-Im Bank – A Carrier Plant a Day in Job Creation in Jeopardy

A sad saga continues for a true U.S. success story as the U.S. Export Import Bank (Ex-Im Bank) remains under a dark cloud. In June of last year, Ex-Im Bank’s authorization lapsed. It was reauthorized five months later, but more than another year has passed without the bank being able to authorize deals over $10 million, as the Senate has not confirmed new Board members, denying the bank a quorum it needs.

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Miki Flamenbaum
Learning from Venus

Even 50 years into the women’s liberation movement and even with increasing numbers of women at the negotiating table, women are under-represented at senior levels of finance companies, and views about how to conduct finance and business negotiations remain decidedly male-dominated.

When I first started at the US Export-Import Bank, my wife would ask me regularly whether I had “kicked banker butt.”

Donald Trump’s high-handed The Art of the Deal approach continues to typify conventional wisdom about deal making.  To succeed, women need to be as or more aggressive than men to be taken seriously.  In an upcoming film at the Sundance Festival, the film Equity about female investment bankers is being heralded as “the first female-driven Wall Street film.”  The female lead characters are tough, aggressive and even ruthless.

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Miki Flamenbaum
Agency Lenders – Both Sides Now Side 2 –The Trouble with Agencies

Agency lenders do not get the respect they deserve from a market too quick to point to their deficiencies. Hence I give you Side 2 of this two part series on agency lenders – The Trouble with Agencies – a title inspired by the Alfred Hitchcock film The Trouble with Harry. The film uses the focal point of Harry, who in typical Hitchcock fashion is dead, but it’s not a murder mystery.   Rather, Harry’s corpse is a plot device used to motivate a love story between Shirley MacLaine’s and John Forsythe’s characters.  

Unlike Harry, agencies aren’t dead, but many do seem quick to want to bury them[1].  The favorable aspects of agencies, highlighted in Part 1, come with baggage that often makes life difficult for agencies and those who work with them.   However, a description of the agencies’ troubles is not the article’s goal.  Rather, I wish to convey how a better understanding of agencies will facilitate working with them more effectively.

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Miki Flamenbaum
Agency Lenders – Both Sides Now Side 1 –Why Agencies Are Often More Efficient Risk Managers

This two part series examines the positive and negative aspects of working with “agency lenders” or “agencies”. “Agency Lender” is a name given to a group of publicly controlled or officially affiliated lenders.  They have either “multilateral” relationships – support from and for a large number of countries - or “bilateral” relationships, which historically entailed affiliation with one sovereign lender, which had bilateral relationships with sovereign borrowers.  Agency lenders now lend to sovereign and non-sovereign entities and include export credit AGENCIES, multilateral development AGENCIES, and other bilateral and multilateral lending and finance AGENCIES.  You now understand why these lenders are called agency lenders or agencies.  

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Miki Flamenbaum
Agency Lenders- Both Sides Now

This two part series examines the positive and negative aspects of working with “agency lenders” or “agencies”.  “Agency Lender” is a name given to a group of publicly controlled or officially affiliated lenders.  They have either “multilateral” relationships – support from and for a large number of countries - or “bilateral” relationships, which historically entailed affiliation with one sovereign lender, which had bilateral relationships with sovereign borrowers.  Agency lenders now lend to sovereign and non-sovereign entities and include export credit AGENCIES, multilateral development AGENCIES, and other bilateral and multilateral lending and finance AGENCIES.  You now understand why these lenders are called agency lenders or agencies.  

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Miki Flamenbaum
How to Lose a Banker in Ten Minutes

My experience as a project and structured finance lender was that fewer than 10% of projects were sufficiently well developed for proper consideration when they were first brought to the bank’s attention. I usually needed only about ten minutes to review and send the deal back to the project developer for substantial additional work, which in many cases was tantamount to rejection. This often left me frustrated as most project teams were earnest, hard-working, and well-intentioned.

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Miki Flamenbaum
Death, Dying and Debt Restructuring

A little over a decade ago, I was asked to deliver a luncheon speech to describe how financial restructurings work and how to avoid them.  

At that time, I was a managing director at the US Export-Import Bank and was dealing with the fallout from the Asian financial crisis, along with dozens of public agencies and private lenders.  As a veteran of a dozen or so debt workouts following the boom and bust of international coal and oil and gas investments in the 1980s, I had a somewhat unique perspective. 

The perspective I presented then and in which I still believe surprised everyone: the stages of a financial restructuring mirror the five stages of death and dying, as presented by Elisabeth Kübler-Ross in her seminal work On Death and Dying

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Miki Flamenbaum