Kolibri signs new senior credit facility
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.
After two days of content and networking in Amsterdam, TXF presents the hot takes of TXF Global Commodity Finance 2022!
TXF’s commodities content manager, Aife Howse, joined Deutsche Bank’s Trade Finance TV to discuss the need for more investment in the metals and mining sectors - an integral part of both the green industrial and digital revolutions.
A landmark deal for CMOC Brazil provides what is the largest structured commodity finance deal for niobium the market has seen, and demonstrates the importance of structured financing for security of supply.