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Deutsche Bank has closed a US$100mn syndicated insured receivables purchase facility for Brazil’s Sadia. Deutsche acted as lead arranger and agent for the facility.

Sadia is a leading producer of poultry, meats, and processed foods. The company ranks as one of Brazil’s largest exporters.

Alongside Deutsche, some 16 European and Latin American institutions participated in the facility as purchasers of Sadia’s export receivables. HSBC and Fortis Capital acted as arrangers.

ABN Amro, Banco Santander Central Hispano, New York and Banco de Credito del Peru participated as co-arrangers. Absa Bank, London; Banco Espanol de Credito; Banco Itau Europa; Banco Latinoamericano de Exportaciones; Bank of Tokyo-Mitsubishi, New York; Dresdner Bank Lateinamerika; Helaba Landesbank Hessen-Thuringen; Lloyds TSB, Brussels; Mizuho Corporate; Sanpaolo IMI, Sumitomo Mitsui Banking Corporation acted as senior lead managers. 

Purchasers are covered by a credit insurance policy provided through AIG Global Trade and Political Risk Insurance Company which is 100% owned by AIG.

The syndicated facility is structured as a one-year revolver in which participants purchase pools of short-term export receivables from Sadia’s sale of poultry, meat, and processed food products to buyers in the Americas, Middle East, Europe, Asia, and Russia. Sadia will periodically sell its portfolio of short-term export receivables from a group of over 130 buyers located in 34 countries, consequently improving its financial and risk profile.

The insurance policy, which will cover up to 90% of the nominal value of the receivables, enables the banks to purchase the receivables of buyers under special and discretionary limits based on Sadia’s excellent export track-record. The banks will retain recourse to Sadia for any amounts not covered by the insurance policy. The facility will enable Sadia to increase its export-related sales and provide more favorable sales terms to longstanding buyers.

“The transaction represents an upsizing of last year’s successful US$55mn receivables facility arranged last year for Sadia, which enabled the company to sell over US$380mn of export receivables over a 12-month span,” says Carl Carrier, director, Deutsche Bank Global Trade Finance. “The facility provides important assistance to Sadia in its strong expansion of export sales.”