Oil trading giant Gunvor has signed its first sustainability-linked revolving credit facility (RCF), securing a US$1.45bn financing line in favour of its Dutch and Swiss operations.
The Geneva-headquartered company says it is the first time its “flagship” financing facility has taken into account environmental social and governance (ESG) commitments. It has previously signed sustainability-linked borrowing base facilities.
The targets relate to a planned reduction in greenhouse gas emissions generated by its direct and indirect operations. They also address making shipping more efficient, investments in non-fossil fuel projects such as renewable energy and the “assessment of the group’s assets and joint ventures against human right[s] principles”.
Gunvor group chief financial officer Muriel Schwab says in a statement that the targets embedded in the facility are “fully aligned” with commitments the company has made over the past year, including a 40% reduction in emissions from its scope 1 and 2 emissions, referring to those generated by its direct operations and energy use.
The targets will be tested annually and externally verified, Gunvor says.
The financing line will be used for general corporate purposes and refinancing parts of previous RCFs signed in 2020 and 2018. It consists of two tranches: one of US$1.17bn, with an initial tenor of one year, and a second US$280mn tranche with an initial tenor of three years.
The facility includes a US$400mn accordion option and sits alongside the existing three-year tranche of its 2020 European RCF. Gunvor’s Dutch, German, Swiss and Singapore divisions also have access to a US$872.5mn off-balance sheet facility announced in July this year.
Several lenders have joined the facility for the first time, the company says, including the Arab Petroleum Investments Corporation as a bookrunning mandated lead arranger and Emirates NBD, Mizhuo, Citibank’s Jersey branch and the Industrial and Commercial Bank of China Limited as senior mandated lead arrangers.
China Construction Bank Corporation’s Zurich branch and DZ Bank join as mandated lead arrangers while Erste Bank, MUFG and Sumitomo Mitsui Trust Bank’s London branch participate as lead arrangers.
ABC International Bank’s Paris branch, Arab Bank (Switzerland) Ltd, Banque de Commerce et de Placements, Commerzbank’s London branch, Europe Arab Bank, First Abu Dhabi Bank, GarantiBank, Habib Bank AG, KfW Ipex-Bank Limited, Mashreqbank and Raiffeisen Bank International join as arrangers. Afrasia Bank Limited and Union de Banques Arabes et Françaises join as participants.
The existing bookrunning mandated lead arrangers are: Rabobank, Credit Agricole Corporate & Investment Bank, Credit Suisse, ING Bank, Natixis, SMBC Bank International, Société Générale, UBS and UniCredit Bank AG.
Rabobank U.A., Credit Agricole Corporate & Investment Bank, ING Bank, Natixis, SMBC Bank International, Société Générale and UniCredit Bank AG are active bookrunners. Credit Suisse is the facility and swingline agent. Natixis and Société Générale are joint sustainability coordinators.
“Gunvor is very pleased with the strong, continued support of our banking partners, whose confidence in our strategy and business model is clear,” says Schwab. The Cyprus-domiciled private company, one of the world’s top energy traders, says it has over US$18bn in financing lines, including an oversubscribed US$830mn US borrowing base facility signed earlier this month.