Trafigura has refinanced its European multi-currency syndicated revolving credit facilities (RCFs) worth US$5.3bn, in a pair of deals that the commodity trading giant says are once again structured as sustainability-linked loans.

The loan structure comprises two separate RCFs, a 365-day agreement worth US$2bn and a three-year facility valued at US$3.3bn, both of which come with options to extend.

Proceeds will be used for general corporate purposes, while also refinancing the maturing European RCF from last March, and the three-year tranche of an agreement signed in Q1 2018.

In a statement, Trafigura says the facilities were initially launched at US$4.5bn but were “substantially oversubscribed” by financial close after being well received by the banking market.

As with last year’s facilities, Trafigura has once again agreed to tie the financing terms of the agreement to its performance on specific ESG targets.

Speaking to GTR last year about the 2021 RCF agreement, Laurent Christophe, Trafigura group treasurer, said the loans would be linked to three overarching key performance indicators (KPIs) of the company’s operations: a reduction of scope 1 and 2 greenhouse gas emissions; growth of the renewable energy portfolio; and bringing sourcing of metals in line with those outlined by ISO 20400 – an international standard for sustainable procurement.

This time around, Trafigura says a further KPI has been included whereby Trafigura will be assessed on its implementation of the voluntary principles on security and human rights. The facility agent will apply a penalty or discount on the margin, depending on the number of KPIs met each year.

“We have successfully refinanced our flagship revolving credit facility which is a key pillar of Trafigura’s financial model designed to give us sustained access to liquidity and capital, including during periods of extreme volatility in the global economy and at times of profound geopolitical tensions,” says Christophe Salmon, Trafigura’s CFO.

“Trafigura continues to maintain significant available liquidity to manage price volatility currently being seen in oil and natural gas,” he adds.

A total of 55 financial institutions – including five new lenders – joined the 365-day European RCF, with the Bank of China, ING, Société Générale and UniCredit acting as active mandated lead arrangers (MLAs) and bookrunners.

Rabobank served as passive MLA and bookrunner, meanwhile Société Générale and UniCredit are sustainability co-ordinators.