LH Asian Trade Finance Fund, set up and managed by EuroFin Asia Group, has carried out in excess of US$30mn in structured trade and commodity finance transactions during the first quarter of 2008. Most of these transactions were carried out in China, Singapore and Indonesia.
The largest transaction was a one-year US$10mn facility granted to a Hong Kong-based metals trading company. The loan proceeds were used to purchase lead ingots from a Chinese smelter, and delivered under an offtake agreement with a Taiwan lead-alloy manufacturing group. Combined with the assignment of contracts, the facility was secured by contract frustration insurance.
Another example of a credit facility provided by the fund includes a deal with a Singapore-based steel products trader involving a revolving credit facility backed by a collateral management agreement for goods located in a warehouse, serving as the hub for its various Indonesian distributions centres. The revolving facility is now helping the client better manage its finances given the rapidly rising global steel prices.
The Asian fund has also worked with an Indonesian-based coal mining group, converting an existing structured loan into a multipurpose credit facility secured by delivery of pre-sold prime quality coal. The loan self-liquidates from the proceeds of the sales to a leading commodity merchant listed on the Singapore stock exchange.
Established by EuroFin Asia in 2006, the fund provides trade and structured trade finance solutions to small and medium-sized businesses in Asia, and companies with Asian trade flows.
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