Finacom Investment House of G’Mangia, Malta has acted as coordinating arranger to the Agrenco Group in Brazil to arrange a one-year secured pre-export finance facility to Inlogs International. The facility represents Inlogs’s first approach to the international syndicated loan market.
With the syndicated loan of US$55mn, Agrenco Group raises to US$80mn the amount of direct financing for grain production. Added to another US$40mn provided through Finacom to cooperatives and other suppliers, the total amount represents origination of 1.25mn tons of soybeans in the 2005-06 crop. This loan is linked to export contracts for clients in Asia and Europe.
As a consequence of market practices, Agrenco Group has 2mn tons of soybeans guaranteed for next crop, to be originated in Mato Grosso, Mato Grosso do Sul, Parana and other states.
The credit of US$55mn was achieved through a pool of European banks, led by Germany’s HSH Nordbank, including Commerzbank and KBC Group, from Belgium. The operation was structured by Finacom, Agrenco’s financial subsidiary, based in Europe.
“Demand for special soybeans has been growing, that is why we decided to invest more in crop financing,” says Pedro Lotti, Agrenco Group’s CFO. The holding, although based in Seynod, France, has a Brazilian accent, because it is managed by Antonio Iafelice, a Brazilian entrepreneur who is also its biggest stakeholder. “We had not found difficulties to obtain this loan. To tell the truth, the credit offered by the banks was larger, but we decided to assume a conservative position,” says Lotti.
With this rise in crop financing, Agrenco expects to achieve a revenue of US$733mn this year, an amount 60% larger than in the last year.
“Brazil is one of the largest grain, coffee and sugar cane producers. A financial institution interested in support the agricultural sector can not remain out of here,” says David Lopez Menendez, director of HSH Nordbank in New York. The bank, based in Hamburg, has assets of €
Menendez says that Brazil is the second most important country in HSH’s branch of agribusiness financing, only smaller than Germany , where its headquarters are located. The size of the investments in the agricultural sector in Brazil or in the world are strategic data, according to Menendez. “The agriculture is becoming more professional and is attracting many international banks”, he says. The bank works mainly with export credit and financing crops in countries like China, Colombia , India and Vietnam .
Finacom’s chief executive, Patrick Zrinzo, adds: “The diverse lending group is proof of Finacom’s sound standing in the international debt markets, and Malta’s reputation as a serious financial centre. The success of this loan financing demonstrates the continuing international banking confidence in Finacom and its clients and in the Brazilian economy. This is the second syndicate we have concluded this year – the first being another syndicate of US$50mn. As one of the leading companies in this sector, Finacom is committed to expanding its resources and range of services to keep pace with the rapid transformation and business opportunities in Brazil’s booming economy.”
“The oversubscription of the loan in the international banking market, at the senior and general syndication stages, the stature and geographic distribution of the bank group as well as the fine pricing of the loan are further confirmation of Finacom’s strong performance. We will continue to actively support other project financings as well as private sector initiatives,” concludes Zrinzo.