JB's weekly round up - 04 August 2014
As many of the regular visitors to our news website will know, earlier this year TXF produced the Berne Union’s 80th anniversary yearbook.
Welcome to the weekly round-up of the TXF news service
That was the week that was
Get involved with the next Berne Union publication
As many of the regular visitors to our news website will know, earlier this year TXF produced the Berne Union’s 80th anniversary yearbook. This is, of course, available in hard copy and as a PDF for free download on our website.
Following on from this, TXF is also producing another publication – called the BU20 – to coincide with the Berne Union’s annual general meeting in October. It will feature a range of articles and enjoy widespread distribution through both TXF and BU channels. There are numerous opportunities within this publication for sponsored editorial and advertising. We will go to print with the BU20 at the end of September, so if you’re interested, please do get in touch with my colleague Dominik Kloiber:dominik.kloiber@txfmedia.com
New head of GTS at BAML
TXF says congratulations to Paul Donofrio, who has been appointed as the new head of global transaction services at Bank of America Merrill Lynch (BAML). He takes over from my long-term friend Paul Simpson, who is being promoted to a new senior role in the bank’s global markets business as head of the asset management services group, which includes prime brokerage and the stock loans businesses. Further detail on the moves can be found in the news report here.
Elsewhere, the International Chamber of Commerce (ICC) has appointed Suresh Advani as senior technical advisor to the Banking Commission to help develop an important and interesting project it has lined up. Suresh is the senior portfolio manager at GML Capital (GML). He has the remit to lead the latest ICC initiative: Institutional Investors for Trade Finance (IITF), an industry project with a broader remit to look at how best to improve risk transfer across a range of markets. It is an important job and the ICC has found a great candidate to take the project forward – read more about it here.
And in the commodity finance world, one of my good pals, Pepi Bedi, has been promoted to head of structured trade finance at Sumitomo Mitsui Bank Corporation Europe (SMBCE). He is based in London. See more on this here. Pepi tells me he is also looking for another person to hire for the department.
Mercuria and Gunvor – bees to the honey pot
It may be the height of summer in the northern hemisphere, but the trading companies are still buzzing with new deals. Mercuria and Gunvor both wrapped up new financings last week, allowing many bankers to go off on their annual vacations with some healthy meat in their portfolios.
Mercuria Energy Group secured a $200 million borrowing base facility through BTMU London for the company’s Middle East trading operations. The facility also brought in a few Middle Eastern banks – see which ones by checking out our news report. Of course, in true private trading company style, good old Mercuria is keeping quiet about the deal. Deal coordinator BTMU tells TXF that this is the first borrowing base facility done with this particular client. Good work guys. This Mercuria deal comes a month on from the company’s mega $2.65 billion RCF, where there was involvement from some 52 banks.
Gunvor also came into the frame last week with a $500 million refinancing for its Ingolstadt refinery in Bavaria, Germany. The new facility has been arranged by Deutsche Bank and UniCredit acting as bookrunners and mandated lead arrangers, sticking with their client to come up with the appropriate arrangement. Read more about the deal here. Gunvor also went on to arrange another deal shortly after this – and we will refer to that next week.
Crazy for cocoa
A lot has happened since we first wrote about the award of the 2014-2015 Ghana Cocobod finance to the largely German-led group of banks back in May. But now, with Ghana looking at a potentially much bigger harvest than originally anticipated, Cocobod is looking to raise more funds under its annual pre-export finance (PXF).
The state-owned entity is now looking to secure a PXF of $2 billion, up some $400 million from its original assessment. Some additional banks have already signed up at a senior level – find out which ones here. We also look more closely at Cocobod’s initiatives to increase the Ghana cocoa crop yield with its offer of free fertiliser to small producers. Will the country hit one million tonnes of crop in 2014-2015? Many think it will, if the weather and the additional initiatives work well.
Cargill pushes e-trade measures with Bolero tie-up
Within trade services, global agri-trader and logistics company Cargill is accelerating its transition from paper documents to ePresentation using Bolero’s cloud-based technology platform. The company has put these initiatives on fast-track and this side of the business can be expected to develop rapidly. See further detail on this development here. The emphasis Cargill is placing on this digital drive is reflected by Alan Adamson, a general manager within Cargill’s agricultural supply chain platform and project lead, who states: “Cargill continues to look for new and innovative ways to improve its processes and trading capabilities across the entire business.”
Featured deal: Hat-trick for CA-CIB & Mobily as EDC goes direct
Saudi Arabian telecommunications company Mobily has been investing heavily in its network infrastructure over the past year, making good use of export credit agency (ECA) financing in the process. In its latest deal, Mobily has signed a long-term vendor financing agreement with Canada’s ECA Export Development Canada (EDC), amounting to nearly $200 million. EDC is the sole financing party.
Mobily appointed Credit Agricole CIB (CA-CIB) as the structuring bank and initial mandated lead arranger for the Shariah-compliant financing. It is the third deal CA-CIB has structured for Mobily in less than a year and one of its core technical roles was to get EDC familiar and comfortable with the commodity Murabaha structure.
Earlier this year, Mobily inked deals backed by Finnvera and EKN amounting to $560 million. That followed a $650 million deal with the same agencies in August 2013.
You can get all the deal details on our free deals databasetagmydeals.
Mine finance – through the looking glass
It seems a while since we had some mining finance to report – but last week saw a couple of projects make some headway and appropriate headlines.
In the first instance, Ariana Resources secured $33 million for itsRed Rabbit Gold Project. What? Red Rabbit? Why? I am keen to learn more about the origins of the name – and will update the news item when I discover more detail. Ariana secured finance through investment bank Turkiye Finans Katilim Bankasi. The facility is based on a participatory banking model. The project is Ariana’s first mine development in Turkey. The project is also benefiting from an additional $5 million equity contribution from Proccea Construction. Our news item on the project carries considerable detail – but not yet on the name of course.
Elsewhere in the mining world, Aureus Mining has received over $11 million from the IFC in equity financing for its New Liberty Gold project in Liberia. The project is developing well as the company expands its gold exploration and development work. Read more about the developments here.
Avanti strikes it rich with Canada’s Kitsault
How many mining companies begin with the letter A? Well here’s another to add to the list – Avanti Mining. Last week it mandated a syndicate of diverse financial institutions to provide secured debt finance facilities amounting to $612 million to develop the Kitsault molybdenum mine at Prince Rupert in northern British Columbia.
Who are they? That’s too easy – go check it out here. The financing will consist of $500 million senior debt for a term of 10.5 years, $42 million in equipment finance for a term of five years and $70 million in the form of standby cost for over-run facilities for a term of eight years. Final credit approval for the facility is expected in September 2014.
Shine on for La Jacinta in Uruguay
The Spanish arm of solar energy firm Fotowatio Renewable Ventures (FRV) has seen its La Jacinta solar project in Uruguay take one massive step forward with the securing of funds for the project. The Inter-American Development Bank (IADB) has signed a $40.9 million loan from its ordinary capital and $25 million from the Canada Climate Fund, which is administered by the bank, to help finance the construction, operation and maintenance of the project.
The IADB financing follows the recent signing of a $70 million project finance arrangement with DNB Group and Intesa Sanpaolo, along with $24 million of additional funding from Santander through its asset and capital structuring team.
With a total installed capacity of 64.8MW, the plant will be one of the largest solar projects in Latin America, with output enough to supply about 35,000 local homes. Full details can be found in the news report.
JBIC has a fiesta in Mexico
In a flurry of activity just over a week ago, the Japan Bank for International Cooperation (JBIC) signed a series of agreements with Mexican institutions that should see the further development of business in Mexico for Japanese companies. The main deal was the setting up of a credit line totalling up to $100 million with Mexico’s Banco Nacional de Comercio Exterior (Bancomext). The loan is a co-financing arrangement with JBIC providing $50 million, and the Bank of Tokyo-Mitsubishi UFJ (BTMU) providing the other $50 million. Full details of this and the agreements signed with Pemex, Banobras and NAFIN can be found in this news item.
Pour me another JBIC
And in a unique deal for an export credit agency, Japan’s JBIC has played a role in helping the Japanese liquor trade marry up with the US liquor business. The deal in question backs Japan’s Suntory in its acquisition of Beam Incorporated of the US – yes, you got it, the makers of Jim Beam bourbon. Interesting one, eh? Under the deal – which is a mega $16 billion buy-out, JBIC is providing Suntory with a subordinated loan totalling up to JPY50 billion ($486 million) and a $1.5 billion facility. Further details of this hybrid can be found here.
And finally…
How utterly disappointing that the members of the World Trade Organisation (WTO) simply couldn’t get it together to reach consensus and implement the Trade Facilitation Agreement (TFA) last week. I was going to write about this – but I was so fed up with all the messing around that appears to go on with these WTO meetings that I went to the pub instead. So much talk and such little action! Implementation was so very close by all accounts, so our thanks to all those who worked hard in trying to make this happen, and to those who scuppered it – shame on you!
Commenting on the news of the failure at the WTO, ICC secretary-general John Danilovich said on 1 August: “There’s huge frustration that a deal with the potential to inject a $1 trillion stimulus into the global economy has been blocked by a diplomatic standoff in Geneva. The deal agreed in Bali last December matters to us all. We’re talking about a common-sense package of reforms that will make it easier for small businesses to export, reduce prices for consumers and help tackle corruption. Our message is clear. Get back to the table, save this deal and get the multilateral trade agenda back on the road to completion sooner rather than later, to grow the economy and create jobs without further delay.”
Seconded!
That’s all folks.
Cheers,
JB
