Global commodity trader Trafigura has entered into a US$500mn five-year loan backed by Italy’s export credit agency (ECA) Sace, to deliver commodities to the Mediterranean country.
Under the terms of the transaction, which was arranged and lent by SMBC, Trafigura has committed to supplying Italian industry with commodities – including non-ferrous metals that are essential for the activities of numerous industrial sectors considered critical in light of Russia’s invasion of Ukraine.
This is the first strategic import transaction under Sace’s Push Strategy, which aims to support Italian suppliers’ access to international markets by targeting large foreign buyers.
“Times of unprecedented complexity require new and innovative ways to support companies. We are truly proud of this operation that, as part of our Push Strategy, accompanies Italian companies on new markets and at the same time allows access to basic raw materials for the continuity and sustainability of their business,” says Michal Ron, Sace’s chief international officer.
As part of the agreement, Trafigura will assess the purchase of goods and technology from Italian companies for use by its own group companies, and participate in a programme of commercial meetings.
The deal also included a review of the trader’s environmental, social and governance policies and performance, with SMBC acting as facility and sustainability co-ordinator. Law firm Clifford Chance, as legal counsel for SMBC and Sace, contributed to finalising the transaction.
“We are delighted to be the first commodity trading house to be supported by Sace as part of their Push Strategy and look forward to building a long-term relationship with them and Italian industry,” says Christophe Salmon, Trafigura’s group chief financial officer.
This is the latest European ECA-backed deal for Trafigura, as countries scramble to build resilience amid concerns over supply disruptions to critical minerals such as refined copper, nickel and palladium, given their role in producing modern and renewable technology.
In October last year, the trader entered into a five-year loan guaranteed by the government of Germany, acting through Euler Hermes Aktiengesellschaft, to support a commitment to deliver up to 500,000 tonnes of non-ferrous metals into Germany under a five-year supply agreement.
The US$800mn deal was underwritten and arranged by Société Générale and syndicated to seven participating banks, and the ECA guarantee was provided under Germany’s untied loan programme – a tool to secure the long-term delivery of strategic commodities to Germany.
This was followed in December by a US$3bn four-year loan, partly guaranteed by Euler Hermes Aktiengesellschaft, to deliver “substantial volumes” of gas into the European gas grid.