TXF China 2019
TXF China brings an exclusive group of senior structured finance professionals together in Shanghai for a day of collaborative discussion of regional opportunities and productive network building.
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.
ESG-tied debt benefits go beyond a simple PR play for Louis Dreyfus Company, it's now a tightly priced option for the trader, as its latest Asian revolver mimics its debut in the sector earlier this year. However, lenders will up fees incrementally with each drawdown this time round.