Trafigura has refinanced its European multi-currency syndicated revolving credit facilities (RCFs) for a total of US$5.4bn, in a pair of deals that the commodity trading giant says were “very well received” by the banking market.
A 365-day facility which replaces the trader’s maturing European RCF from last March was initially launched at US$1.5bn before closing at US$1.9bn. In addition, the company has exercised the first extension option available on its US$3.5bn three-year ERCF, extending the facility by 365 days to maintain a three-year tenor whilst simultaneously increasing the size of this tranche by US$250mn.
“We have increased our access to liquidity over the last year to manage the impact of higher volatility in global markets,” says Christophe Salmon, Trafigura’s group chief financial officer. “The resilience and effectiveness of our funding model has proved its strength, particularly when commodity markets have been exceptionally disrupted. We are very grateful to the banks who joined the facility and are supporting our strong development trajectory.”
In line with the last two years, the facilities are structured as sustainability-linked loans, with a penalty or discount being applied to the margin depending on Trafigura’s performance against certain metrics. The renewed structure includes five targets: cutting operational scope 1 and 2 emissions, responsible sourcing of metals, the growth of the company’s renewable power portfolio, implementation of the Voluntary Principles on Security and Human Rights at its operations, and reduction of lost time incident rate. Trafigura says that progress towards each target will be evaluated on an annual basis and verified by a third-party expert.
A total of 54 lenders came in on the financing. For the 365-day RCF, Bank of China, ING, SMBC and UniCredit came in as active mandated lead arrangers, while Rabobank and Société Générale acted as passive mandated lead arrangers. SMBC and UniCredit also took on sustainability co-ordinator roles.