Mandated lead arrangers have signed a financing agreement for a US$75mn pre-export advance involving an Indian steel producer and a Swiss offtaker. The one-year loan is to finance steel shipments from India’s Jindal Steel to offtaker Duferco. The underlying steel offtake contract is for US$100mn. Repayments will happen by deliveries of steel.
The arrangers are Standard Chartered, Credit Suisse, India’s ICICI and another European bank.
The transaction is a first, claim banks involved, because no performance guarantee has been provided by the steel producer to the lenders.
There have also been no large deals on this sort of structure done in the last few years, claims Sanjiv Singhal, director, structured trade finance – South Asia, at Standard Chartered Bank. “The banks are taking a view on the ability to perform by the company,” adds Singhal. “It sets a bit of a benchmark for other steel companies in India. We have another US$200mn in the pipeline.”