Ghana Cocoa board’s (Cocobod) annual pre-export finance facility has secured a record number of commitments, closing at US$1.5bn.
The transaction is in its 18th year, and it remains the largest structured soft commodity finance facility closed in the Sub-Sahara African market to date.
The facility was launched at US$1.2bn, and raised over US$1.8bn during syndication, but following scale-backs, it now stands at US$1.5bn.
The signing ceremony is set to take place in Accra, Ghana in mid-September.
Mandated lead arrangers (MLAs) this year are Crédit Agricole, ICBC, Ghana International Bank, SMBC, and Standard Bank.
Including the MLAs, a total of 28 banks are participating in the facility, with ticket sizes following scale-backs ranging from US$5mn to US$80mn .
The margin is 90 basis points (bp), a substantial fall from the 250bp over Libor paid on last year’s facility, but it is double the 45bp paid on the 2008 facility.
Speaking to GTR, Anne-Marie Woolley, director, head of structured trade & commodity finance, Africa, at Standard Bank, remarks: “Although at the beginning there were concerns over widening liquidity premiums, ultimately this is a well-priced transaction with a good track record. Furthermore, there are not that many assets of this calibre in the market, so this also helped us achieve a good oversubscription.”
The structure of the deal remains unchanged, with the facility used to purchase cocoa beans for the 2010/11 season, and it will be secured by the assignment of contracts from buyers.
This year’s transaction is said to feature some banks that are new to the deal, or haven’t participated in the transaction for a number of years.
The deal also illustrates the tightening trade ties between Africa and Asia, with the Chinese bank ICBC taking the MLA role. In addition, this year marks the first time the arrangers organised an Asia deal road show held in Beijing, in addition to the usual London show.
Yet, such efforts were ultimately more an exercise in raising awareness of the Cocobod deal in China, as the show did not result in any additional Chinese banks joining the facility.
Last year’s Cocobod deal was launched at US$1bn, and was closed at US$1.2bn. Joint coordinating banks on this year were Ghana International Bank, Natixis, Société Générale and Standard Chartered.
Last Updated August 25, 2010
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