TXF Americas 2020
The fun in the sun returns! Bringing all key players together for two days of networking, we explore case studies of the latest deals and examine the next hot opportunities across the region.
Commodity finance comprises two key products. The first is commodity-linked loans in the agriculture, oil and gas and mining industries where the lender has the future production or reserves of the commodity as security. These types of deal can be reserves-based loans, pre-export facilities, prepayment facilities, or even streaming, royalty-based loans and factoring. The second are very large unsecured term loan and revolving credit facilities provided annually by commercial banks to the major commodity trading houses and producers – Glencore, Gunvor, Trafigura, Vitol, ADM, Bunge and Castleton for example. These loans, effectively working capital facilities, also enable the major traders to provide loans to commodity producers that lack liquidity, thus ensuring security of commodity supplies and additional profits from that lending due to the arbitrage between the cost of debt for the major traders and what they can on-lend at.
Ireland-based Kenmare Resources returned to the debt markets in December to refinance the remaining debt backing its Moma titanium mine in Mozambique. But this time round, the deal has a new lender line-up, vanilla structure, looser covenants and cheaper pricing, which all reflect the strength of the mine’s cash flows and its expansion capacity.
Anglo American agreed a £405 million ($527 million) rescue deal with Sirius Minerals this week. The takeover is a lifeline for Sirius which faced collapse if it could not find alternative funding for its struggling Woodsmith polyhalite mining project in the UK. But what is the benefit for Anglo?’