Global commodity trader Trafigura has secured a US$2.4bn debt package from a group of banks across the Middle East and Asia Pacific, in a deal that once again sees financing terms tied to Trafigura’s performance on sustainability targets.
The three facilities were upsized from an initial launch amount of US$1.5bn and involve a total of 36 financial institutions, including eight new lenders.
Bank of Communications, DBS, Standard Chartered and SMBC served as the mandated lead arrangers (MLAs) and bookrunners across all the tranches, while Standard Chartered also acted as global coordinator.
The facilities comprise a one-year revolving credit facility (RCF) worth US$700mn and a US$810mn three-year term loan that included the Development Bank of Japan as an additional MLA.
Trafigura says that a total of 25 financial institutions joined the two US dollar tranches.
The third facility is a one-year Chinese offshore spot (CNH)-denominated term loan, equivalent to US$890mn, which saw Agricultural Bank of China and China Construction Bank serve as MLAs and bookrunners. They were joined by six other lenders during syndication.
The funding will be used to refinance a maturing three-year term loan tranche from 2018 and maturing one-year US dollar and one-year CNH tranches from 2020, as well as for general corporate purposes.
“We are extremely pleased with the record support we received from the banking community across Asia Pacific and Middle East. Trafigura’s exceptional business and financial performance underpinned the commitment of our banks to these facilities, especially the three-year tranche, which shows confidence about our ability to weather different commodity and credit cycles,” says Christophe Salmon, group chief financial officer for Trafigura.
He adds that the implementation of a sustainability-linked loan (SLL) structure in the new facilities, in line with the European RCF closed by the company in March, was a “very important step to demonstrate Trafigura’s commitment to champion the ESG agenda in our sector”.
A Trafigura spokesperson tells GTR that the SLL structure is incorporated into all three tranches of the agreement, with the key performance indicators (KPIs) aligned with the US$5.5bn European RCF deal signed in March.
In that transaction, financing terms were linked to three overarching KPIs for the company’s operations: a reduction of 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.