Perfect Deals of the Year 2019: Commodity finance

It’s that time of year, again! The TXF Perfect Commodity Finance Deals of the Year awards have landed. Hosted virtually, instead of in traditional TXF style in Amsterdam, the awards ceremony looked a little different this year, but this does not take away from the hard work and innovation that went into each and every winning deal. 

From never-before-seen structures in the steel and renewable energy sectors to debut sustainability-linked loans for a number of major commodity traders, 2019 boasted a year of firsts in the commodity trade finance world, with some truly unique transactions crossing the financial line. But the overarching theme to this year’s commodity finance awards was demonstrated in the new-found focus on the seminal but growing trend of ESG-tied debt. 

The TXF Perfect Deals of the Year awards are the most specialist in the industry. All the submitted deals, and many more, are entered into the TXF database, and all parties involved can verify the details. Market participants can then vote for their favourite deals through TXF’s database via www.tagmydeals.com. Rounded off with a final editorial assessment, the most unprecedented, market influencing and landmark transactions are selected. So without further ado, here are this year’s winners and congratulations to all deal participants!

Overall Commodities Deal of the Year

Cofco’s $2.3 billion sustainability-linked loan is not only the first facility of its kind to be secured by a Chinese commodities trader, but is also the largest ever sustainability-linked loan to close in the commodities industry.

Borrower: Cofco International
Debt volume: $2.3 billion
Documentation agent: ABN Amro
BMLAs: ABN Amro, Agricultural Bank of China, ANZ, China Construction Bank, China Development Bank, ICBC, Natixis, BBVA, ING and Oversea Chinese Banking Corporation
Participants: Bank of America, Commonwealth Bank of Australia, Rabobank, Credit Agricole, DBS, HSBC, MUFG, Societe Generale, Standard Chartered Bank, SMBC and Westpac Banking Corporation
Sustainability coordinators: BBVA, ING and Rabobank
Legal (lenders): Clifford Chance

Metals/Minerals Commodities Finance Deal of the Year

Metalloinvest negotiated a record length six-and-a-half-year tenor on its €200 million PXF, with a competitive fixed interest rate for the entire loan maturity.

Borrower: Lebedinsky JSC (Metalloinvest guarantor)
Structure: Pre-export finance
Debt volume: €200 million
Tenor: Six and a half years
MLAs: ING, Societe Generale, Unicredit, Bank of China, Credit Agricole, Intesa Sanpaolo, and Deutsche Bank

Commodity Trading Company Finance Deal of the Year

After years of talks in the pipeline with its relationship banks, 2019 was the year in which Bunge made its debut into the sustainability-linked loan market with a $1.75 billion RCF, with emphasis on the importance of clear, easily measurable and verifiable sustainability metrics.

Borrower: Bunge Finance Europe
Debt volume: $1.75 billion
BMLAs: ABN Amro, BNP Paribas, HSBC, ING, Natixis, SMBC, ANZ, Bank of China, Bank of Montreal, MUFG, Citibank, Rabobank, Credit Agricole, Deutsche Bank, ICBC, Mizuho, Societe Generale, Standard Chartered, UniCredit, US Bank and Wells Fargo.
Sustainability co-coordinators: ABN Amro, BNP Paribas, Rabobank, and Natixis
Legal (lender): Clifford Chance Legal (borrower): Reed Smith

Energy Commodities Finance Deal of the Year

Nayara Energy’s $750 million four-year pre-payment financing is the company’s first ever deal of this structure, and the first of its kind for an Indian corporate.

Borrower: Nayara Energy Limited
Debt volume: $750 million
Tenor: Four years
MLAs: Deutsche Bank (sole coordinator), ABN Amro, Barclays Bank, SMBC
Legal (lenders): Allen & Overy

Most Innovative Commodities Finance Deal of the Year

Not only was Trailstone Renewable’s €150 million borrowing base the first of its kind to finance electricity on a single commodity basis, but it is also the first ever green electricity borrowing base in Europe in accordance with LMA guidelines.

Borrower: Trailstone Renewables GmbH
Debt volume: €150 million
Tenor: One-year
MLAs: ING, MUFG, Rabobank, Standard Chartered, Tokio Marine Europe
Legal (lenders): Dentons

Commodities Acquisition Finance Deal of the Year

Var Energi’s $6 billion facility marked the largest volume reserve base lending structure of last year, making the company the second largest producer in the NCS.

Borrower: Var Energi AS
Debt volume: $6 billion
Senior MLAs: BNP Paribas, ABN Amro, Banca IMI, Citigroup, Credit Agricole, Danske Bank, Deutsche Bank, DNB Bank, HSBC, ING Bank, Natixis, National Westminster Bank, Nordea Bank, Filial I Norge, SEK, SMBC, Societe Generale, UniCredit, Wells Fargo International.
Other MLAs: BNP Paribas, ABN Amro, Banca IMI, Citigroup, Danske Bank, Deutsche Bank, DNB Bank, HSBC, ING Bank, Natixis, National Westminster Bank, Nordea Bank, Filial I Norge, SEK, SMBC, Societe Generale, UniCredit, Wells Fargo International.
Lead arrangers: DBS and Sparebank 1 SR-Bank
Legal: Advokatfirmaet Wiersholm AS (lenders); Herbert Smith Freehills and Schjodt (borrower)

Asian Commodities Finance Deal of the Year Award

JSW Steel’s up to $750 million pre-pay, signed with Duferco, stemmed from a strong and mutually beneficial relationship between the two companies of more than 10 years. A structure not often seen in the steel industry; this facility looks set to serve as a financing template for future deals.

Borrower: JSW Steel
Debt: Up to $750 million
Tenor: Five-year
MLAs: Natixis, Societe Generale, ING Bank, Standard Chartered Bank, BNP Paribas, Credit Suisse, Citi, Mashreq Bank
Legal (borower): Dentons
Legal (lenders): Allen & Overy

African Commodities Finance Deal of the Year

Cocobod’s $300 million receivables-backed deal is the first ever syndicated sustainability-linked loan for an African borrower, giving the company a chance to tighten its margin by 15bp if it can meet previously agreed ESG goals.

Borrower: Ghana Coco Board (Cocobod)
Debt: $300 million
Tenor: Three years
BMLAs: Credit Agricole (facility agent), Rabobank, Natixis, Societe Generale, MUFG (documentation agent)
MLAs: Ghana International Bank DZ Bank, Nedbank
Environmental consultant: Societe Generale and Rabobank

Russian Commodities Finance Deal of the Year

In what was the largest single commodity finance transaction in Russia last year, and the first ever sustainability-linked syndicated facility for a Russian corporate arranged by international and Russian banks in Russia, Rusal’s $1.085 billion pre-export financing has set the bar high.

Borrower: Rusal
Debt volume: $1.085 billion
Coordinating BMLAs: ING and Natixis
MLAs: Bank of China, Bank of Ireland, Credit Agricole, Intesa Sanpaolo, RCB, Sberbank, Societe Generale, UniCredit, Zenith Bank
Legal: Clifford Chance (lenders); Cleary Gottlieb Steen & Hamilton (borrower)

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