The Ghana Cocoa Board (Cocobod) has signed a US$1.8bn pre-export finance (PXF) facility with 23 banks to fund the 2016/17 cocoa crop.

The receivables-backed syndicated loan, which will be structured similarly to previous Cocobod annual trade facilities, was oversubscribed by US$640mn. It was signed on September 21 in Frankfurt, Germany.

The facility was priced at 67.5bps above Libor, an increase from 62.5bps offered last year, and 60bps in 2014.

Speaking to GTR, a source close to the deal says the increase in pricing is negligible in a time of reduced risk appetite amongst most banks worldwide, with stricter regulations having resulted in many downgrades and fines for financial institutions over the past couple of years.

“The banks’ own cost of funds will have gone up in many cases much more than this – even by multiples of this, and even for a short-term deal like this,” the source says. “If anything it’s a testament to the sustained pulling power of Cocobod that they can still hold banks to these prices.”

The facility was underwritten by the Bank of Tokyo-Mitsubishi, Deutsche Bank, Natixis, Nedbank, Rabobank, Société Générale and Standard Chartered as co-ordinating initial mandated lead arrangers (MLAs), with the co-operation of DZ Bank as co-arranger, and Ghana International Bank as initial MLA (as announced by GTR in June).

Bank of China, Crédit Agricole CIB, Intesa Sanpaolo, Rand Merchant Bank, Sumitomo Mitsui Banking Corporation, ABN Amro and KfW IPEX-Bank joined as senior mandated lead arrangers. Standard Bank, State Bank of India, Mizuho Bank, Barclays, Attijariwafa Bank Europe, Ecobank Ghana and Fidelity Bank joined subsequently in general syndication.

Law firm Sullivan & Worcester advised Deutsche Bank and the syndicate of lenders.

The proceeds from the loan will be used to purchase the main cocoa crop for the 2016/17 season, which begins in October. According to Cocobod’s chief executive Stephen Opuni, the cocoa board expects to purchase 850,000 to 900,000 tonnes of beans in the new season.

Cocobod’s output target for the 2015/16 season was also set at 850,000 tonnes, but a government source told Reuters last week that output had been reduced to 780,000 tonnes due to severe and prolonged drought between December and March.

The annual loan, which is the largest pre-export soft commodity financing facility in sub-Saharan Africa, is the 24th of its kind since it was established in 1992.