JB's weekly round-up - 12 May 2014

As part of our Commodity Finance Series, TXF has released a Natural Resources & Commodities Finance special report.
3 min

 Download the Commodities Finance special report
As part of our Commodity Finance Series, TXF has released a Natural Resources & Commodities Finance special report. The report covers everything from an analysis of commodity traders' views to natural gas project financings and the growing strength of commodity trading companies. We also feature interviews with Paul Cohen Dumani, general manager of MIT, and Andrew Voysey from the Cambridge Institute for Sustainability Leadership. To download the full report or read individual articles, please visit the dedicated report page here.

 When it's Spring again...         
Apologies to Max Bygraves – who? Last week the TXF team hosted the inaugural Natural Resources & Commodities Finance Conference in Amsterdam. Held at the old agricultural and grain trading hall Beurs van Berlage in the centre of the city, the wide range of speakers and delegates found the format, content and location one of the best they had encountered. One of the most noticeable things about the event was the quality of the speakers and attendees, with so much experience to draw from. This was a factor that was key in the plenary sessions, idea labs and workshops, with a bank of historical evidence and practice to draw from.

Do see the conference report and check out the photos from the event. The event will again be held in the wonderful city next year, so plenty of time for all those traders based elsewhere to come and enjoy the culture Amsterdam has to offer. We even organise a walking tour to help you get a sense of the place and its rich history.

 Plenty of $$$ in the commodity sector
The closing of the First Quantum $3 billion term loan and revolving credit facility early last week clearly shows how keen the commodity banks are to support companies with sound, realistic and properly profitable operations. The company had spent considerable time ensuring that their plans and projections for mine developments were pointing in the right direction, and the syndication and closing of the deal is reflected in that.  The Quantum deal started out at $2.5 billion but was increased to $3 billion due to oversubscription – with some new banks being turned away, so we understand. The deal was also one of the transactions highlighted by Peter Kindt, head of metals and mining, EMEA, at ING, in a presentation at the TXF commodities conference in Amsterdam last week.

In another illustration of how it is a busy time on the commodity front all round, last Wednesday Glencore-Xstrata hosted a bank meeting in relation to its $17.3 billion loan refinancing. It was by all accounts an interesting session, as some bankers appear not too impressed by a pretty miserable flat fee structure. A good exercise in how to win friends and influence people perhaps – please debate. The likelihood is that some banks will come in, probably only because they are expected to, but with a relatively small ticket.

Also in the market of course is Noble Resources which seems to have a mega-raft of banks on board for a $2 billion facility. And, lastly, Mercuria is back into the market with a $1.8 billion loan.

 MIGA and IFC combine for Nigerian power sector
The lack of infrastructural development is holding much of sub-Saharan Africa back. Nowhere is this more evident – arguably – than in Nigeria, where the power sector simply cannot meet the demands. Industry is being stifled, not to mention the considerable hardships of the general population. Successions of politicians have much to answer for! This is absolutely astonishing in a country so rich in oil and gas. So, Thunderbirds are go! - MIGA and IFC to the rescue this time with various packages of partial risk guarantees, loans, hedging instruments and guarantees for projects in the power sector.  

In this case the main attention is being focused on the 459MW Azura Edo power plant near Benin City, where loans of up to $135 million and guarantees of up to $659 million have been made available by the World Bank group.

 SG revamps its export finance division
Société Générale Corporate & Investment Banking (SG CIB) has revamped its export finance department with the promotion of Isabelle Roux-Sharpe as the new head of the export finance business unit and project team, reporting to Fréderic Surdon, global head of the export finance department. Many congratulations to Isabelle.
Isabelle replaces deputy global head Mark Howard, who has moved back to the UK where he is now the head of the London trade, commodity finance and agribusiness group. Good to have you back in the UK Mark, just in time for the Rugby World Cup in England next year, eh. See the news story for other changes in the export finance team.
 ABN on the march in SE Asia
Down in Singapore, ABN AMRO is moving ahead with the promotion of Jacqueline Chang to the newly created role of regional head of commodities, Asia. Jacqueline was previously head of commodities in Singapore. The move is part of the bank’s global commodities expansion within its energy, commodities and transportation business. Regionally, she will report to Maureen DeRooij, CEO Asia, large corporates and merchant banking. See the news report for full details.
 And finally…
TXF is gearing up for the Fin4Ag conference in Nairobi in July, with the development of a related report on the financing of agri-developments in the Africa, Caribbean and Pacific (ACP) regions. TXF is working with organisers the Technical Centre for Agricultural and Rural Cooperation (CTA) and the African Rural and Agricultural Credit Association (AFRACA) as media partner for the event, which this year focuses on creating a ‘paradigm shift’ in agricultural finance.
Key topics will include the power of mobile technology to revolutionise agri value chains and ways that innovative financing and insurance tools are helping smallholder farmers access credit, improve their yields and tap into export markets. More than 500 delegates, ranging from farmer groups and regulators to micro-financiers and international banks, are expected to attend the five-day event, which runs from July 14th to 18th at the Kenya School for Monetary Studies.
Please contact us if you have a related story to tell or wish to be included within the report. To register for Fin4Ag, visit: www.fin4ag.org/en/registration.html

That's all folks


Jonathan Bell


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