There are signs of life in the syndications market with the successful signing of a number of credit lines for leading trading companies, with some securing oversubscriptions.

Steel trading company Stemcor signed a US$480mn multicurrency revolving credit facility via bookrunners and mandated lead arrangers BNP Paribas, Fortis Bank (UK branch), ING Bank, Société Générale CIB and RBS. The deal was signed in May and was oversubscribed by US$80mn.

Additional mandated lead arrangers were Credit Europe Bank, Credit Suisse, DBS Bank, Standard Chartered Bank and State Bank of India. In total, 31 banks joined the syndicate, pushing the originally requested US$400mn to US$480mn.

The proceeds of the facility will be used to repay the outstanding drawings under an existing 364-day US$550mn revolving tranche, which matured on May 12, 2009. A further US$150mn revolving tranche is set to mature in May 2011.

The amount raised by Stemcor is less than previously closed credit facilities, but this is in line with lower steel prices and the wider economic environment, explains Michael Broom, director of group treasury at Stemcor: “Over the forthcoming year, with lower steel prices and reduced trade flows, we anticipate a substantially reduced need for working capital and hence we scaled the amount back.”

He adds: “Given the current economic climate and the sharp decline in demand for commodities – especially steel – it is particularly pleasing that our valued banking partners have continued to show such confidence in Stemcor. We are now in a strong liquid position for the next 12 months and will be poised to book additional business when the market picks up, hopefully in the latter part of 2009.”

Glencore, one of the world’s largest suppliers of commodities and raw materials, also successfully signed revolving credit facilities of US$6.65bn and US$815mn in May.

The new US$6.65bn forward start revolving credit facility – closed oversubscribed from a launch amount of US$5bn – will become available when the borrower’s existing US$8.21bn revolving credit facility matures in 2011. This will effectively extend the existing facility’s maturity to 2012.

The second facility, a new US$815mn 364-day revolving credit facility with a one-year term-out option, will refinance the company’s existing US$925mn 364-day revolving credit facility, which matured in May 2009. This deal was also oversubscribed from its initial launch of US$500mn.

The forward start facility was supported by a 14-strong arranging bank group with a total of 35 banks joining the transaction in syndication.

Barclays Capital, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, Fortis Bank, HSBC Bank, ING Bank, JP Morgan, Lloyds TSB, Rabobank, The Royal Bank of Scotland and Société Générale CIB were mandated by the Swiss-based company to arrange the facilities.

The 35 banks that joined the transaction were: Australia and New Zealand Banking Group, Banco Itaú Europa, Banco Santander, Bank Leumi, Banque Cantonale Vaudoise, BHF-Bank, Commerzbank, Credit Agricole, DBS Bank, DZ Bank, Europe Arab Bank, HypoVereinsbank, KBC Bank, Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen Girozentrale, Mizuho Corporate Bank, Natixis, Norddeutsche Landesbank, Samba Financial Group, Scotia Capital, Scotiabank, SEB, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and Zürcher Kantonalbank.

The following banks were involved in the 364-revolving credit facility: Barclays, Calyon, Lloyds TSB Corporate Markets and Standard Chartered Bank, who all acted as mandated lead arrangers. DBS Bank, National Australia Bank and UBS participated as lead arrangers, with the Bank of Tokyo-Mitsubishi as arranger. Bank Leumi, Bank of China, Commonwealth Bank of Australia, Israel Bank and Macquarie Bank were involved as co-arrangers. Bank of America, Banque Cantonale Vaudoise, Commerzbank Aktiengesellschaft, ICBC, KBC Bank, Landesbank Baden-Württemberg, National Bank of Greece, Westpac Banking Corporation and Zürcher Kantonalbank were all lead managers.

Quickly following the signing of these deals was news of potential plans for the Swiss trading house to consider potentially floating on the stock market. According to The Financial Times, Glencore has been in talks with bankers about the possibility of pursuing an initial public offering (IPO).

The firm has been known for its secrecy surrounding its finances, but given today’s uncertain market, there is an argument suggesting the company needs to be more transparent about its liquidity and general financial health. As a public company, it may well have more luck avoiding reputational damage caused by market rumours. A lack of public disclosure means it becomes harder for companies such as Glencore to dismiss damaging rumours and exaggerated concerns about their stability.

The smaller Hong Kong-based commodities trading house Noble Group has similarly closed large credit facilities. At the end of May, it obtained a two-year US$800mn standby borrowing facility by extending an existing agreement for a smaller loan. The new loan replaces a US$700mn revolving letter of credit and guarantee facility.

The syndication provides Noble with additional credit capacity and further extends the facility’s maturity. The facility was oversubscribed and increased to US$800mn to satisfy new participant demand.

The facility pays a margin of 159.5 basis points per year, and has a two-year tenor. The size of the facility is US$800mn for the first year and US$770mn for the second year.

Noble Group CEO Richard Elman notes: “We are particularly pleased to see our banking partners respond so positively in this credit constrained environment. The strong take-up and competitive pricing reflects the ongoing strength of Noble as a supply manager and bodes well for Noble’s ongoing fund-raising efforts given our continuing strong business growth. We are grateful for the banking group’s confidence in us.”

Syndication efforts were led by the four mandated lead arrangers: ING Bank, The Royal Bank of Scotland, Société Générale CIB and Standard Chartered.

The general syndication was joined by 16 additional banks: Citibank, ICICI Bank, KfW Ipex-Bank, The Bank of Tokyo-Mitsubishi UFJ, Commerzbank Aktiengesellschaft, DBS Bank, Lloyds TSB, Citic Ka Wah Bank, Deutsche Bank, Commonwealth Bank of Australia, Banco Santander, Arab Bank, KBC Bank, Bank of America, The Hong Kong and Shanghai Banking Corporation, and (for the first year only) Coöperatieve Centrale Raiffeisen-Boerenleenbank (trading as Rabobank International).

The Swiss oil trader Gunvor has signed a revolving one-year credit facility of US$600mn. The deal is a refinancing and extension of its debut syndication of US$370mn raised last year.

This financing was originally launched at the end of May and the company aimed to raise US$450mn. However, just as last year’s deal was oversubscribed, this year’s facility also attracted more commitments than anticipated.

A total of 17 banks provided funds, with the banking consortium headed up by BNP Paribas and Credit Suisse as bookrunners. Additional bookrunners were Fortis Bank (Netherland), ING Bank, RaboBank International, Société Générale and Crédit Agricole.

Arrangers are Natixis, Sumitomo Mitsui Banking Corporation Europe, Industrial and Commercial Bank of China (London), RZB, DBS Bank (London), Deutsche Bank (Amsterdam), BHF-Ban,; Banque Cantonale de Genève and Union de Banques Arabes et Francaises.

The funds will now be made available for use as working capital and as a reserve for margin calls.