Metals trader Gerald Group has refinanced its North American borrowing base facility with a pool of lenders led by Rabobank.
The US$700mn two-year senior secured facility for the group’s North American entity GT Commodities LLC includes a US$670mn revolving credit facility, as well as a new US$30mn standby letter of credit line.
The standby option will be used as a margin financing solution “to support the group’s hedging strategies on commodity exchanges”, Gerald Group says.
A “green and transition loan” sub-limit within the financing package has been doubled to US$200mn and will be used to finance the trading and storage of low-carbon metals across North America.
In addition to acting as the sole bookrunner, Rabobank is also administrative agent, swingline lender, a primary facility issuing lender, mandated lead arranger and joint sustainability co-ordinator. Alongside Crédit Agricole and Wells Fargo, it is also a dedicated letter of credit tranche issuing lender.
Joint lead arrangers are Crédit Agricole, Deutsche Bank, HSBC and Wells Fargo. Natixis is joint sustainability co-ordinator while UBS is syndication agent.
The other members of the syndicate are Bank of China, CIBC, DZ Bank, Garanti Bank, ICBC Standard Bank, ING Capital, Raiffeisen Bank International and UniCredit.
“We are grateful for the continued strong support of our banking partners, which has enabled both the growth and diversification of our borrowing base facility,” says Gerald Group chief financial officer Patricia Nikolopoulos.
“The introduction of a standby letter of credit represents a notable advancement in the structure of the facility and is a progressive development within the market. This enhanced framework strengthens our financing flexibility and improves the efficiency of our hedging activities, which together with our sustainability-linked loan adds meaningful value to our trading business.”
This year’s refinancing represents a small upsizing of the previous US$650mn North American borrowing base deal signed in 2022, when commodity traders were earning bumper profits from volatility and soaring demand.
London-headquartered Gerald Group reported pre-tax profit of US$10mn in 2023, down from US$59mn in 2022, on US$6.8bn in sales, according to the company’s most recent accounts.
