In November 2003, ABN closed an initial nine-month asset-backed grain pre-export finance facility with Ivolga. The facility employed a novel structure based on the implementation of a new Kazakh grain law in 2001, which introduced the concept of grain receipts. The new facility is for double the tenor and a considerably larger amount of financing.
Prabhat Vira, global head of commodity finance comments: “Since Standard & Poor’s recently upgraded Kazakhstan’s country rating to investment grade, an increasing number of foreign banks are vying to penetrate the market. In an extremely competitive environment, ABN Amro was able to deliver a financing package that addressed the unique aspects of the Kazakh grain market while meeting the specific needs of Ivolga in an exceptionally short time-to-market.”
The facility incorporates an offshore grain sales company and is backed by physical grain in the form of receipts representing grain attributable to commercial contracts for deliveries to well-established multinational grain trading companies.
ABN Amro acted as the sole arranger, facility agent, security agent and passport bank. The deal was successfully syndicated among Natexis Banques Populaires, Fortis and KBC. In co-operation with these banks, ABN was able to deliver the facility within six weeks.