Trafigura Group Pte Ltd. (“Trafigura”), announced the closing of its new 365-day European multi-currency syndicated revolving credit facilities (the “365-day ERCF”) totalling $1.9 billion, as well as the extension and increase of its $3.5 billion 3-year facility (“3-year ERCF”).
The new 365-day ERCF, initially launched at $1.5 billion, was well received by the bank market and closed substantially oversubscribed.
Christophe Salmon, Trafigura’s Group chief financial officer said, “We have successfully refinanced our flagship European revolving credit facility which is a key pillar of our financial model, designed to give us sustained access to liquidity and capital. We have increased our access to liquidity over the last year to manage the impact of higher volatility in global markets.
The resilience and effectiveness of our funding model has proved its strength, particularly when commodity markets have been exceptionally disrupted. We are very grateful to the 54 banks who joined the facility and are supporting our strong development trajectory.”
The 365-day ERCF will be used to refinance the maturing 365-day facility dated 2 March 2022, as well as for general corporate purposes. In addition, the company decided to exercise the first extension option available on its 3-year ERCF, extending the facility by 365 days to maintain a 3-year tenor whilst simultaneously increasing the size of this tranche by $250 million.
In line with the last two years, Trafigura structured these facilities as sustainability-linked loans (“SLL”). The SLL are linked to key performance indicators (“KPIs”) to improve Trafigura’s sustainability performance, aligned with material issues for its business.
This renewed SLL structure includes five KPIs, with the progress towards each target evaluated on an annual basis and verified by a third-party expert.
The KPIs relate to cutting operational greenhouse gas emissions (Scope 1 & 2); responsible sourcing of metals (in line with ISO 20400:2017); growing Trafigura’s renewable power portfolio; implementation of the Voluntary Principles on Security and Human Rights at Trafigura’s operations; and reduction of lost time incident rate (“LTIR”). A penalty or discount on the margin will be applied, depending on the number of targets met each year.
The 365-day ERCF was arranged by Mandated Lead Arrangers & Bookrunners (“MLABs”) Bank of China Limited, London Branch, ING Bank N.V., Sumitomo Mitsui Banking Corporation and UniCredit Bank AG as Active MLABs, and Coöperatieve Rabobank U.A. and Société Générale acted as Passive MLABs.
Sumitomo Mitsui Banking Corporation and UniCredit Bank AG acted as Sustainability Coordinators. In addition to the six MLABs, 48 financial institutions joined the ERCF during syndication and/or extended their participation under the 3-year ERCF.
