Acting as joint mandated lead arrangers ING, Société Générale and Standard Chartered structured a US$500mn committed guarantee facility for Noble Group, a major global supply chain manager for agricultural, industrial and energy products at the end of last year. It is the first transaction closed in Asia with the syndication of solely unfunded instruments.

The transaction is particularly important for Noble Group in that it provides for issuance of a wide range of contingent instruments on behalf of worldwide subsidiaries across its wide range of sectors.

“It also provides a value-added tool resulting in efficient management of its guarantee and standby letter of credit document flow through one window,” comments Lars Vriens, managing director, trade and commodity finance, wholesale banking/structured finance at ING.

Furthermore, the deal structure does not represent any added balance sheet exposure, as usage under the facility represents contingent liabilities, which are liquidated in the ordinary course of business.

“This facility is an important next step in building a sound financial model that will support the next three-to-five-year phase of growth,” remarks Richard Elman, CEO of Noble Group.

Vriens comments: “The facility clearly helps to bring the company to a higher efficiency level and directly supports its growth. It is a win-win situation for the company and the banks.”

He adds: “The transaction features an innovative set-up and an execution mechanism that allows for issuance of performance bonds and bid bonds as well as standby letters of credit for initial and variation margins. The issuance was also completed by three banks that effectively worked together.”

The syndication process was highly successful, attracting 18 relationship banks as well as drawing in a number of new banks. The deal saw a relatively high number of Asian banks take part, banks that have previously been reluctant to participate in facilities on an unfunded basis.

The deal was seen as particularly attractive to participating banks as those institutions that do not have strong documentary trade handling capabilities could still participate in Noble’s trade-related activity and get a greater insight into the company’s trade operations.

Vriens further comments: “Noble Group has grown into a global well-balanced trading house in recent years, and is expected to further expand, offering new finance opportunities and spin-off businesses.”

Deal Information:




Noble Group
Amount: US$500mn
Mandated lead arrangers: ING, Société Générale and Standard Chartered
Tenor: Two years
Margin: 50bp per year
Law firms: Clifford Chance
Date signed: December 2007