RFI-OPIC-19-I-0001_ForeignCurrency.pdf

Document Type: Sources Sought Notice Request for Information Number: OPIC-19-I-0001 Posted Date: 11/6/2018 Response Date: 11/20/2018

NAICS Code: 523930

CONTRACTING OFFICE ADDRESS

Overseas Private Investment Corporation (OPIC), Office of Acquisition, 1100 New York Avenue, NW, Washington, DC 20527.

DESCRIPTION

This is a combined SOURCES SOUGHT/Request-for-Information (RFI) notice. This is not a request for proposals and does not obligate the Government to award a contract. THERE IS NO SOLICITATION AT THIS TIME. All responsible businesses, including small businesses, are encouraged to respond to this notice. The information requested by this notice will be used within the OPIC to facilitate the decision making process and will not be disclosed outside the agency. OPIC will not be responsible for any cost incurred by interested parties in responding to this notice.

Unsolicited proposals or offers of any kind will not be considered in response to this notice. All information received in response to this notice that is marked Proprietary will be handled accordingly. Responses to this notice will not be returned.

OPIC’s Financial Management Department is seeking capability information and industry comments pursuant to the attached Draft Statement of Work (SOW). This information shall be provided by interested contractors that believe they are potential sources for providing financial advisory services.

At this time, questions concerning the composition and requirements for a future solicitation, as well as those regarding the nature of future services to be performed under any OPIC requirements will not be accepted. E-mail responses to this Sources Sought/RFI notice to Contract Specialist Arlette Tongue at Arlette.Tongue@opic.gov by 10:00 AM Eastern Standard Time (EST) on November 20, 2018.

REQUIREMENTS

OPIC is seeking advisory services from a Contractor experienced in these transactions as demonstrated by the contractor’s ability to serve in the market-equivalent role of a Qualified Independent Representative (“QIR”) to private sector parties. The Contractor will provide expert advice to OPIC in providing detailed guidance in structuring hedge transactions as part of its various financing packages and scenarios to ensure sound risk assessment and mitigation.

Minimum capabilities shall include documented evidence of experience and expertise in accordance with the scope of the attached SOW. Interested vendors shall include any comments or questions in regards to the OPIC’s draft SOW. This shall be a separate document entitled: “Foreign Currency and Interest Rate Advisory Comments & Questions; (Include COMPANY NAME/GSA Schedule Number is Applicable).

This document will not be included in the page limitation count for an interested vendor’s respective response noted below.

OPIC will evaluate market information – including responses received in regards to this posting – to determine the potential market capacity to:

• Provide services consistent with the existing scope noted in the attached SOW.

• Secure and apply a full range of resources (technical, corporate financial and human capital).

• Provide services under a performance-based service contract to successfully perform similar requirements.

SUBMISSION INSTRUCTIONS

If your company has the potential capacity to perform these contract services, please provide the following information:

1. Company name; mailing address; physical address; point of contact; telephone number; fax number; e-mail address; DUNS number; NAICS code; company business size (if small, indicate type); and GSA schedule number and SIN number (if applicable).

2. A tailored capability statement between one and ten (10) pages that address the particulars of the draft SOW, with appropriate documentation that clearly support the claims of organizational and staff capability.

3. Responses to questions with no more than half a page per question. If you do not have experience in an area, leave the response blank.

1. Does the vendor adhere to US and EU regulatory requirements for advisory services to entities engaged in swaps and derivatives contracts? Specifically:

A) Does the vendor adhere to the current "ISDA DF Protocol"?

B) Does the vendor have the capability to serve as an Advisor to a Special Entity as defined at 17 CFR 23.440, and 23.450?

C) Is not subject to any statutory or regulatory disqualification, sanction, or debarment by any industry regulatory, or self-regulatory body, state or Federal, US or foreign, or subject to undisclosed conflicts of interest.

Please provide a brief summary of qualifications with respect to these regulatory and industry standards.

2. Has the vendor advised, structured, or negotiated, ISDA transactions in respect of emerging or frontier markets? Specifically, countries listed as Low, Lower-Middle, or less preferred, Upper-Middle income economies, as listed at <https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups> ?

https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups

If Yes - Please provide a table and brief summary of relevant transactions, redacting or abstracting client-confidential information as necessary.

In particular: (a) note any transaction involving OPIC or any bilateral or Multilateral Development Finance Institution (DFI, MDB) (b) whether the vendors role was in support of a lender, investors, or other entities, and (c) what document, terms, or economics did the vendor advise or structure.

3. Does vendor provide a data platform or service for foreign currency or interest rate exposure tracking?

If so:

A) What functions are supported?

B) Does the platform enable (1) Tracking of actual and projected cashflows, and/or

(2) portfolio risk analysis/valuation for counterparty, interest rate, foreign currency or other valuation (CVx) purposes?

C) Will all data created on the Vendor platform remain the property of OPIC and be transferred to OPIC at the termination of the contract in a machine-readable form with no copies retained?

D) Will data or calculations on the platform created in interaction with OPIC data become the property of the Corporation, such that an independent third party can validate calculations even after termination of the contract?

E) Can contractor provide evidence and results of third part reviews including security, data integrity, functionality and internal controls such that the Corporation and its auditors may rely on such evidence?

4. A representative sample of contracts awarded by the contractor that are similar in scope to the requirements as described in the draft SOW within the past three years. For each contract listed, include the type of contract; total estimated value; contract period of performance (e.g., base and number of option periods); customer (i.e. federal agency) and respective point of contact (e.g., point of contact’s name, phone number, and e-mail address).

5. A Rough Order of Magnitude (ROM) pricing for one base year of services.

STATEMENT OF WORK

FOREIGN CURRENCY AND INTEREST RATE ADVISORY, TRAINING AND DATA

SERVICES

1.0 BACKGROUND

The Mission of the Overseas Private Investment Corporation (OPIC) is to support development finance in less developed countries and regions.

[Recently enacted legislation establishes a new Corporation – the International Development Finance Corporation (DFC) - to encompass the functions of OPIC and incorporate other substantial changes (See Public Law 118-254, Division F, available at https://www.congress.gov/115/bills/hr302/BILLS-115hr302enr.pdf#page=300). The requirements described in this SOW are not expected to change under the new legislation.

References to OPIC, or the “Corporation”, below should be interpreted to equally refer to OPIC, or the future successor entity to OPIC, the International Development Finance Corporation

(DFC).]

OPIC’s financing, and insurance, with rare exception has been denominated in US Dollars. In some transactions, the Corporation is indirectly exposed to the foreign exchange (“FX”) and interest rate (“IR”) risks, as a project may earn revenues in the local currency of the country where the project is located and interest payments, which could be either fixed or floating, and principal repayments are made to the Corporation in US Dollars. The Corporation may also directly assume FX and IR risks where interest and principal repayments to the Corporation may be denominated in the currency of the country where the project is located. Furthermore, if such local currency debt were made on floating interest rates, payment of interest may be exposed to the basis risk in the local currency.

Pursuant to federal and Corporation policies and requirements, total risk to the government is limited through several mechanisms – for example by USD denominated limits on amounts directly disbursed, or on contingent liability. As a wholly owned US government corporation, loans and guarantees are funded and budgeted for pursuant to the Federal Credit Reform Act of 1990 (FCRA) essentially through liabilities denominated in US Dollar and bear fixed or floating interest rates. FCRA requires transaction costs to be estimated on a net present expected value basis. A key aspect of the work of the vendor will be to advise the Corporation and other advisors retained by the Corporation, on market-consistent implementation of FCRA within other constraints and objectives of the Corporation.

1.1 OBJECTIVES

OPIC needs advisory services to a special entity as defined at 17 CFR 23.440, and 23.450, and maintain adherence to the current ISDA DF Protocol. OPIC presently estimates one to ten transactions within the next 12 calendar months. OPIC cannot guarantee minimum levels of work or billable hours. OPIC’s transactions range from very large and sophisticated infrastructure transactions approaching $350 million or more, involving multiple lenders and multiple technical advisors, to small and medium enterprise transactions of less than $2 million.

https://www.congress.gov/115/bills/hr302/BILLS-115hr302enr.pdf

A diverse set of OPIC projects are described at <http://www.opic.gov/opic-action/all-project-descriptions>.

1.2 SCOPE OF WORK

OPIC is seeking advisory services from a Contractor qualified to operate under the US CFTC and similar European Market Infrastructure Regulation (EMIR) requirements – in respect of foreign currency and interest rate hedges. The Contractor shall be qualified to serve as an Advisor to a Special Entity as defined at 17 CFR 23.440, and 23.450, and maintain adherence to the current ISDA DF Protocol.

The Contractor shall provide expert advice to OPIC in structuring its transactions in respect to direct or underlying hedge transactions to ensure sound risk assessment, risk-mitigation, and other corporate objectives. The Contractor shall also provide a periodic review of the Corporations prior hedging deals to ensure best practices are followed and assist in any required restructuring of hedges at either the Corporation or on a project-level basis.

In addition, the Contractor shall provide to the Corporation training on foreign currency transactions, derivative documentation and market norms relevant to its business, and accounting and financial statement advisory support to the Corporation, to include necessary documentation support for policy and procedure manuals, external audit support, internal control review, and inspector general reviews.

1.3 TASKS/WORK REQUIREMENTS

1.3.1 TASK 1: ADVISORY SERVICES

Contractor shall provide OPIC the analytical advice and market knowledge below consistent with fast-response market operations and ongoing transaction negotiations. Such effort may involve intense effort of 2 or more staff for a week or more, or periods of no billable activity, depending on the pace of negotiations. In general, OPIC will seek on-demand or within 3-5 business day responses on each of the activities within this Task.

Advise OPIC on Transaction, ISDA, and related documents, to which the Corporation may be may directly or indirectly a party;

The most likely form of advice will be to serve as a resource to transaction teams or to internal governance of the Corporation, throughout the transaction life cycle. For example:

o Early Stages - On the feasibility and economic design of transactions at the early stage (term-sheet) level of detail.

o Negotiation - On transaction economics during detailed negotiations including formulation or evaluation proposals and counter proposals and execution methodology, including liquidity management considerations;

o Monitoring /Execution– On monitoring or accounting for changes in Swap economics during life of project.

o Workout – Advising Corporation in restructuring swaps in context of workout-recovery efforts.

o Review - The Contractor may be tasked to provide a review of prior transactions to provide a level of quality assurance.

Represent OPIC in establishing documentation and negotiations with counter parties, outside counsel, auditors and stakeholders in respect of the transaction.

• Provide scenarios and projected cash flows such that the Corporation can separately model and update modeled costs under the Federal Credit Reform Act of 1990. Contractor does not need to be expert in Federal Credit Reform, however Contractor will work with the Corporation’s other advisors in this regard.

• Review of documents, and any other normal and customary advice provided by an Advisor to a client in a market context.

• Advise the Corporation in the design and implementation of its programs, products, governance, accounting, or budgeting for consistency with market best practices, market data sources and services.

• Travel may be required for this task. Costs shall be reimbursable only within the character and limits prescribed elsewhere in the contract.

1.3.2 TASK 2: TRANSACTION AGENT SERVICES

Subject to specific tasking and authorization, vendor may be Contracted to act as an Agent of the Corporation in respect of negotiating, monitoring, or facilitating the performance of ISDA or related documents to which the Corporation may be a direct or indirect party.

This task may include negotiation of ISDA master guarantee agreements, and other related documents such as schedules, credit support, confirmations, and any elections or amendments. This task may include payments monitoring, management, accounting, or invoicing.

Travel may be required for this task. Costs shall be reimbursable only within the character and limits prescribed elsewhere in the contract.

1.3.3 TASK 3: TRAINING

Contractor shall provide to the Corporation training on Foreign Currency and Interest rate risk mitigation strategies and hedging instruments enabling staff at specific levels to perform their functions – such as negotiating transactions, or implementing governance and quality controls.

The Corporation envisions training to be classroom-based instruction at OPICs offices over 1-2 days with a particular focus for the lenders perspective for transactions typical of OPIC’s portfolio. Subject to specific tasking and funding, this training may be repeated semiannually or followed up with refreshers via videoconference or other distance-learning. In general, there are three audiences:

1. Transaction Staff – Loan officers, analysts, and interns involved in underwriting, structuring, negotiating, monitoring and work-out of loans, guarantees, insurance, and equity positions. Staff are at a wide range of experience, but all will be familiar with financing documents and term sheets.

2. Executives – Leadership level staff either within the management of the Corporation or in governance functions (eg Board members)

3. Policy Governance – Transaction and Financial – staff responsible for implementing corporate wide quality control and risk management. This population reviews transactions and implement internal controls and decision governance requirements. For this population, training may be more detailed and extend to a full work week.

Travel may be required for this task. Costs shall be reimbursable only within the character and limits prescribed elsewhere in the contract.

1.3.4 TASK 4: VALIDATION REVIEW

Contractor shall review the current or historical work of another vendor. Typically, this will be limited to a document review of existing or draft documents, and conference calls and to deliver to the Corporation a written assessment or recommendations contrasting the documents for review to Corporate objectives, Market best practices, and other recommendation criteria as the Vendor may propose.

Travel may be required for this task. Costs shall be reimbursable only within the character and limits prescribed elsewhere in the contract.

1.3.5 TASK 5: DATA SERVICES

Contractor shall provide FX and IR exposure tracking, reporting, accounting, functions in order to enable the Corporation to:

a) Track and analyze the terms of contracts, swaps or other instruments

b) Track actual and projected cashflows

c) To conduct portfolio risk functions for counterparty, interest rate, foreign currency or other valuation purposes

All data created on the Vendor platform remains the property of the Corporation and shall be transferred to the Corporation at the termination of the contract in a machine-readable form with no copies retained. Data or calculations on the platform created in interaction with other data are the property of the Corporation, unless otherwise specifically agreed to in writing by the Corporation.

Where available, vendor shall provide evidence and results third party reviews including security, data integrity, functionality and internal controls such that the Corporation and its auditors may rely on these reviews.

1.4 QUALIFICATION AND SKILLS

The Contractor(s) shall be acceptable to the Corporation and have the following qualifications:

1. Adherence to US and EU regulatory requirements for advisory services to entities engaged in swaps and derivatives contracts. Specifically:

a. Adherence to the current "ISDA DF Protocol"

b. Capability to serve as an Advisor to a Special Entity as defined at 17 CFR 23.440, and 23.450?

c. To act as a fiduciary, in the Corporation’s best interest, consistent with A) and B) above.

d. Is not subject to any statutory or regulatory disqualification, sanction, or debarment by any industry regulatory, or self-regulatory body, state or Federal, US or foreign, or subject to undisclosed conflicts of interest.

2. Experience advising, structuring, or negotiating, ISDA transactions in respect of emerging or frontier markets? Specifically, countries listed as Low, Lower-Middle, or less preferred, Upper-Middle income economies, as listed at <https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups>

3. For any Data Platform services provided under Task 5, or as may be incidental to other tasks –

a. All data created on the Vendor platform remain the property of OPIC and will be transferred to OPIC at the termination of the contract in a machine-readable form with no copies retained.

b. Data or calculations on the platform created in interaction with OPIC data become the property of the Corporation, such that an independent third party can validate calculations after termination of the contract

c. Where available, Vendor will provide evidence and results of third party reviews including security, data integrity, functionality and internal controls such that the Corporation and its auditors may rely on such evidence https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups

Contractor shall submit resumes and other qualifications for staff on each task, and periodically refresh the resumes for available staff. No assigned staff or resources may be subject to a regulatory disqualification or process which may result in a regulatory censure or disqualification.

Contractor shall have market certifications, track record, and experience with regulatory frameworks appropriate to this work.

1.5 DELIVERABLES

The contractor shall provide an advance template for its representation and scope of its Quality Assurance process with respect to the Task. For each deliverable, Contractor shall provide the Quality Assurance Plan, or other internal governance plan or process, evidencing the internal reviews of the deliverable work product. Specific deliverables and due date will be detailed and requested with each individual task.

1.6 PLACE OF PERFORMANCE

The Contractor shall performed duties at its own premises, on Contractor’s own systems, at all times consistent with financial sector best practices for security and integrity.

Travel may be required for completion of tasks.