Gunvor has closed a new syndicated US$540mn borrowing base facility to support its biodiesel trading activity, as the trader seeks to promote cleaner energy products.
Oversubscribed to US$595mn from an initial launch value of US$400mn, the facility is structured around Gunvor’s biofuel inventory positions, which includes two processing plants in Spain.
Rabobank and Crédit Agricole group member CA Indosuez were bookrunners and mandated lead arrangers (MLAs), while Crédit Agricole and Rabobank also served as documentary agent and facility/security agent respectively.
Mizuho and UBS acted as lead arrangers, while Société Générale and Sumitomo Mitsui Trust Bank were arrangers on the deal.
Muriel Schwab, CFO for the Gunvor Group, says: “Biofuels, along with other ‘transitional’ commodities, are increasingly important to Gunvor’s trading mix. Our banking partners have expressed considerable support for trading cleaner products as Gunvor pursues its energy transition strategy.”.
Gunvor has been scaling up its share of so-called “transitional commodities” such as biofuel, natural gas and LNG – as opposed to oil and oil products – in the past couple of years, with the firm noting that around 50% of its total trading volume consisted of these commodities in the first half of 2020.
This was up from 28% in 2018, a jump that is at least in part explained by the firm’s €13.6mn acquisition of two Spanish biofuel production plants from CIE Automotive last year.
Gunvor notes in a statement that it has been active in the biofuel sector for over a decade now, and processes several types of feedstocks, from vegetable oil to waste residues and by-products, to produce “low CO2-emitting biofuels”.
Meanwhile, it operates several blending facilities in Asia, the US and Europe, where it prepares biofuels for end consumers.
Earlier this year, in February, Gunvor renewed a sustainability-linked loan after meeting commitments relating to its performance on the environment, social impact and governance.
The original deal, signed in late 2018, was the first of its kind for an energy commodity trader. It included a discounted interest rate if the company met targets on areas including reductions in CO2 emissions, waste and water management, improvements to personnel safety at refineries, and transparency reporting related to feedstock origination.