JB's weekly round-up - 07 April 2014
Everything you need to know about trade finance.
That was the week that was…
The Fundamentals of ECA Finance
If you are one of the hundreds of people who will be descending on Washington DC later this month for the annual US Ex-Im conference, we hope to see you there. On April 23 (the day before the conference begins) TXF will be teaming up with CC Solutions, US Ex-Im and Milbank for a morning training course on ‘The Fundamentals of ECA Finance’.
There are big savings for conference attendees that want to attend the training course. Please visit the site for more information on the modules and how to book.
Cofco completes double deal
There are big pull forces taking place within the agri-trading sector, and not surprisingly it is demand from China and Asia that is the driving force behind many of these developments. Hot on the heels of a 51% purchase in Dutch agri-trader Nidera in late March, China National Cereals, Oils and Foodstuffs Corporation (Cofco) struck an agreement with Hong Kong-headquartered commodity trading company Noble Group to buy a 51% in its agricultural trading arm Noble Agri.
The Noble and Nidera deals mark the biggest overseas acquisitions in China's agri-sector, with a combined investment by Cofco in the region of $2.8 billion.
Read the article for full details of both deals here
Last chance to register for free commodity trader webinar
Tomorrow at 3pm CET Doug Ziurys will be presenting the findings of the annual FImetrix survey of commodity traders, and exploring their views on finance and regulation.
If you want to listen in, register here.
Cargill and Copersucar sign off on sweet deal
Elsewhere in the agri world, there are also strategic consolidation arrangements taking place. Agri-trading company Cargill and Brazilian sugar and ethanol producer Copersucar have struck a deal to combine their sugar trading activities in a new joint venture company. They will each own 50% of the new JV, which will produce, commercialise and trade raw and white sugar across the world.
Ivo Sarjanovic, currently head of Cargill’s sugar business, will become the chief executive of the new company. See the article for full details of the benefits the JV will bring to both parties and for their respective comments.
Turkey’s Tiryaki reunites with EBRD for financing
In a sign that agri-trading is going through something of a busy period, Turkish agricultural processor and trader Tiryaki Agro Gida Sanayi Ve Ticaret (Tiryaki Agro) has arranged a $250 million financing through a combination of commercial and development financial institutions. The credit facility is a borrowing base transaction with a three-year tenor.
The transaction was led by ABN AMRO, the European Bank for Reconstruction and Development (EBRD) and the Netherlands development bank FMO. The article has details of the other financial institutions involved and further background to the transaction. Tiryaki’s involvement with the EBRD goes back to 2012 when the bank took a $25 million equity stake in the company, the EBRD’s first equity investment in Turkey’s corporate sector.
EDC shifts some reliance onto Asia
In the realm of export credit financing, Canada is taking a typically pro-active stance with the hugely important Indian multi-sector conglomerate Reliance Industries Limited (RIL). Export Development Canada (EDC) is providing a $500 million direct export credit facility to RIL. The relationship between EDC and RIL stretches back to 2004, when EDC first became involved in financing exports to RIL. This deal, however, is among the largest the export credit agency (ECA) has extended in Asia.
See the article for details of what the funds will be used for and feedback from RIL’s CFO.
Agencies and banks power Sarulla project
The Japan Bank for International Cooperation (JBIC) and Asian Development Bank (ADB) have led the $1.17 billion projectfinancing for the Sarulla geothermal power project in Indonesia to financial close.
JBIC will provide $492 million and ADB will provide $350 million, while the remaining $328 million will be financed by six commercial banks involved in the transaction: Mizuho, Bank of Tokyo Mitsubishi, Sumitomo Mitsui Banking Corporation Société Générale, ING and National Australia Bank.
See the article for details of the project sponsors and how the financing will help to unlock clean energy resources in the country.
BoC takes a huge chunk of Trafi RCF
The big commodity trading companies are flavour of the day for the banks. This time, it is the news that Trafigura has successfully closed its key European revolving credit facility (RCF) at $4.735 billion – an increase from the $4 billion the facility was launched at, despite the significant reduction in pricing the global commodities trader managed to secure. It is indicative of the strength of the trader in the sector.
TXF understands that the largest single stake in the deal by any one bank was by the Bank of China, which waded into the deal with a take of $250 million. Read the article here
You can also visit our free deals database, tagmydeals, for full information on the 51 institutions involved.
Musical chairs at BNP Paribas
BNP Paribas (BNPP) has created a new global trade and transaction banking business line, headed by Marc Carlos in Paris, and enacted a number of significant senior management changes within the new unit. Olivier Paul has been appointed global head of trade and banking flow. Emmanuel Galzy is promoted to global head of supply chain management, replacing Mathieu Le Brigand, who becomes head of energy and commodity finance (EMEA).
See details of the BNPP trade shuffle here.
More market moves
There are big moves elsewhere in the trade finance community.Henrik Junker becomes Orbian’s European managing director.
ABN, meanwhile, has made two hires to strengthen its sector origination capabilities for its energy, commodities and transportation (ECT) clients. Jeroen Westrik takes up a new role as head of ECT sector origination and details of the second hire are on the article.
Meanwhile, across the Atlantic and in the export finance sector, US Ex-Im has strengthened its leadership team with theappointment of Bob Morin as senior vice president for business and development and Robert Roy as vice president for the transportation division.
Bob has spearheaded Ex-Im’s aviation business for the past decade, and along with his European counterparts, worked tirelessly to provide the necessary financing for aircraft during the darkest days of the financial crisis.
Last, but certainly not least, experienced trade financier Ian Henderson has been hired as a consultant for Gunvor, focussing on the trader’s metals business, based in South Africa.
We are delighted that Ian will be speaking at TXF’s inauguralNatural Resources and Commodities Finance Conference in Amsterdam on 6th and 7th May.
It’s a funny old game – banking that is! Over the years we have all witnessed – and I, perhaps more than many – how banks look to rename or restructure divisions to keep in line with the evolving market. With so many influences in the market, it is certainly not an easy task by any means. Only earlier this year, I sat with one banker who exclaimed to me that he was not sure if his department ought to be called supply chain finance. Does it really describe what he, his colleagues and the bank do? The jury is out on that one.
For companies/clients looking for the right person within any one financial institution to deal with can be something of a nightmare or lottery. All the more reason for financial institutions to properly market their personnel, units and teams! At the end of the day, the biggest assets of any institution are the people and teams working there. So tell the world! We, at TXF, are always happy to help you in this task.
That’s all for now folks.