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GTR News Brief: Episode 1

The annual receivables-backed pre-export financing for Ghana Cocoa Board (Cocobod) has closed with a 47% oversubscription in general syndication. Standard Chartered Bank and Natexis Banques Populaires were mandated lead arrangers this time around – for a US$810mn term loan. This is up from US$550mn raised last year through Calyon, Royal Bank of Scotland (RBS) and SG as lead banks.

This transaction is the largest structured soft commodity syndicated deal in Africa. It is highly regarded in the market with a proven track record of 14 years. The pool of banks – both Ghanaian and international financial institutions, some with a local presence – includes long-standing relationship banks of Cocobod as well as new banks.

Whilst the borrower elected to an increase in the transaction size, the 26 participating banks in the loan nevertheless had to be scaled back as the result of the very high level of appetite displayed in the market, claim the mandated lead arrangers.

The deal has a tenor of 10 months (average life seven months) and pays a margin of Libor + 20bp compared to a margin of 32.5bp last year. Tickets of US$30mn, US$20mn, US$10mn and US$5mn were on offer this year for fees of 40bp, 36bp, 32bp and 27.5bp. Also, there is a US$50mn ticket with fees of 46bp.

Senior lead arrangers were: Bayerische Landesbank, BHF Bank, BNP Paribas, Citibank International, DekaBank, Dresdner Bank, DZ Bank, HSH Nordbank, KBC Bank, Rabobank International, and RBS.

Lead arrangers were Bank of Tokyo-Mitsubishi UFJ and ICICI.
Arrangers were Bank Melli Iran and Landesbank Rheinland-Pfalz.

Lead managers were Arab Bank, Ghana Commercial Bank, Ghana International Bank, Landesbank Baden-Wurtemberg, Banque Internationale des Mascareignes, Mizuho Corporate Bank and State Bank of India.
Ecobank Ghana and  Standard Bank were managers.

Denton Wilde Sapte acted as legal advisor to the lenders, Standard Chartered as Facility agent and Natexis as documentation agent.

As in the past, the facility has been fully underwritten by the mandated lead arrangers and will be used to purchase cocoa beans for the 2006-07 season. The bookrunners were Standard Chartered and Natexis.

The facility has an average life of approximately seven months. It will be fully secured at all times by the assignment of firm and fixed price contracts from acceptable OECD buyers, who have for many years had extensive and successful relationships with Cocobod, and by the assignment of the offshore collection account with Ghana International Bank plc, London.
Cocobod continues to be an internationally renowned and highly regarded organisation. It is generally accepted as being one of the premier cocoa organisations in the world.

Ghana is the world’s second largest producer and exporter of cocoa and earns about 40% of its FX revenues from cocoa. The cocoa sector plays a leading role in Ghana’s economy and employs over 2mn farmers and buying agents.

Cocobod has a larger role than simply marketing the company’s cocoa but also has specific responsibility for crop development in terms of new hybrid varieties and improved husbandry including disease and pest control. Cocoa beans from Ghana command a price premium due to its consistent high quality.