Ghana Cocoa Board (Cocobod) has officially signed its 2014/15 trade finance facility for US$1.7bn.
The facility was oversubscribed by 15% and the agreement also comes with US$200mn of available on-demand capital for re-drawing from April 2015 to May 2015 for the light crop season.
Geoffrey Wynne, head of trade and export finance at Sullivan & Worcester (S&W), had the lead role in running the documentation signing and says to GTR: “The documentation process was challenging this year due to a world of increasing sanctions and concerns on financing in any emerging market.”
“It is to the credit of the mandated lead arrangers and, of course, Ghana Cocoa that the facility was signed on time and for an oversubscribed amount. Conditions precedent are being satisfied in good time.”
Speaking at the signing ceremony, Stephen Kwabena Opuni, chief executive of Cocobod, said that programmes, such as disease control, had been enhanced to ensure the sustenance of the cocoa industry. This year saw Cocobod introduce a free fertiliser application programme to “increase yield and boost farmers’ income”.
Opuni said: “Realistic prices would be paid to cocoa farmers to build their confidence in the cocoa business and encourage the young generation to go into cocoa farming.”
Proceeds of the facility will be used to finance the purchase of the main cocoa crop for the 2014/15 season commencing in October 2014. The facility will pay a margin of 0.6% a year over Libor.
This year’s arrangement has seen a new mix of lenders collaborating and includes DZ Bank and Ghana International Bank (as bookrunners) and Barclays, Commerzbank, Deutsche Bank, KfW Bank and Natixis (as co-ordinating initial mandated lead arrangers and bookrunners.). The bookrunners have been joined in senior syndication by BTMU, Nedbank, Rabobank, Standard Bank and SMBC as senior mandated lead arrangers. In general syndication, they were joined by Société Générale, ABN Amro, Bank of China, BHF Bank, Credit Agricole, Industrial and Commercial Bank of China, Intesa San Paolo and Standard Chartered Bank.
In June 2014, a DZ Bank official confirmed to GTR that a new six-bank consortium had won Cocobod’s annual pre-export finance (PXF) facility, which stood at US$1.6bn. However, after a general syndication launch and the Ghanaian minister of finance, Seth Tekper, confirming that the facility would be increased, the receivables-backed facility for cocoa purchases was finally signed in Paris on September 11, 2014.