Trafigura Group Pte Ltd. (“Trafigura” or the “Company”), a global commodities company, has successfully finalised its new 365-day European multi-currency syndicated revolving credit facilities (the “365-day ERCF”) totalling $1.9 billion, alongside the extension and augmentation of its $3.7 billion 3-year facility (“3-year ERCF”).
Originally set at $1.5 billion, the 365-day ERCF was met with substantial oversubscription.
Christophe Salmon, Trafigura Group Chief Financial Officer, said, “The successful renewal of our flagship European revolving credit facility, which is a key pillar of our funding model, is a vote of confidence from our banking partners. We are maintaining the Company’s liquidity at record levels following this refinancing and extension process.
“As a result, Trafigura is well positioned to manage potential bouts of volatility, as commodity markets remain uncertain in the near-term. We are very grateful to the 54 banks who joined the facility and are supporting our future performance and commitment to sustainability across our global operations.”
The 365-day ERCF is intended to refinance the maturing 365-day facility from 7 March 2023, in addition to serving general corporate purposes. Moreover, the Company opted to utilise the second extension option on its 3-year ERCF from 2 March 2022, thereby prolonging the facility for an additional 365 days to sustain a 3-year tenure and concurrently expanding this portion by $160 million.
In keeping with previous practices, these facilities were structured as sustainability-linked loans (“SLL”), tethered to specific key performance indicators (“KPIs”) to enhance Trafigura’s sustainability initiatives, relevant to its business interests.
This revised SLL framework comprises three KPIs, with the progress towards each evaluated annually and verified by an independent assurance provider.
The KPIs focus on reducing operational greenhouse gas emissions (Scope 1 & 2), setting a new intensity reduction goal for Trafigura’s shipping business (Scope 1 & 3) starting in 2026, expanding Trafigura’s renewable energy portfolio, and adopting the Voluntary Principles on Security and Human Rights in its operations.
Depending on the attainment of these targets each year, a penalty or discount will be applied to the margin.
The 365-day ERCF was orchestrated by a consortium of seven Mandated Lead Arrangers & Bookrunners (“MLABs”), including Bank of China Limited, London Branch, ING Bank N.V., Société Générale, Sumitomo Mitsui Banking Corporation, and UniCredit Bank GmbH as Active MLABs, with Coöperatieve Rabobank U.A. serving as Passive MLAB. Société Générale was appointed as the Global Coordinator, while Sumitomo Mitsui Banking Corporation and Natixis were named as Sustainability Coordinators.
Beyond the MLABs, an additional 47 financial institutions participated in the ERCF during syndication and/or extended their involvement under the 3-year ERCF.
