TXF Perfect 10 Commodity Finance
The wait for the winners of the TXF Perfect 10 Commodity Finance Deals of the Year is over. Here are the landmark deals of 2023.
Commodities traders raised a multitude of big-ticket financings in 2023. But diversifying the funding mix was just as important as scale in another volatile year for the market.
With the greater focus on energy transition from trading houses, banks and policymakers, sustainability-linked loans were high on the fundraising agenda and featured on four of this year’s winning deals. And the recent trend of ECA-backed debt as a new financial instrument in traders’ toolboxes continued apace.
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So, without further ado, here are the 2023 winners:
Overall Commodity Finance Deal of the Year
Winner: IXM
Description: One of the world’s largest trading houses in the mining and metal industries, IXM, raised a $785 million ESG-tied borrowing base in 2023.
The deal is an unprecedented hybrid secured borrowing base as it combines both the features of a borrowing base and the features of a strict commodity trade finance transactional follow-up.
In terms of ESG KPIs, this is the first time for IXM to have defined with UBS a first set of evolving KPIs towards more sustainable business practices and to include them in their Borrowing Base.
ECA-Backed Commodity Finance Deal of the Year
Winner: Vitol
Description: Vitol tapped a $598 million SACE-backed sustainability-linked loan to fund the provision of natural gas to Italy. Under the SACE Push programme, the deal promotes cooperation with Italian companies.
Green Energy Commodity Finance Deal of the Year
Winner: STX Group
Description: STX Group raised a €150 million borrowing base in 2023. The facility has the unique quality of being partially secured by a diverse portfolio of environmental commodities. This marks one of the first times the banking system has appreciated the full value of the wide range of environmental commodities as a security, which essentially is a necessity for levelling the playing field for the energy transition.
Agri-Business Commodity Finance Deal of the Year
Winner: Viterra
Description: Canadian grain handling business Viterra closed a one-year senior unsecured sustainability-linked RCF, in the aggregate amount of $4.11 billion. The facility has set a benchmark for big-ticket agri-business deals with ESG credentials.
Metals Commodity Finance Deal of the Year
Winner: Gerald Group
Description: The world’s largest independent and employee-owned metals trading house - Gerald Group – raised its new annual syndicated revolving credit facility. The RCF was oversubscribed and was upsized from its initial launch at $125 million to $180 million.
North America Commodity Finance Deal of the Year
Winner: Gunvor USA
Description: Gunvor USA has closed the syndication of its $1.6 billion uncommitted borrowing base credit facility. The facility includes a $1.28 billion one-year tranche, a $320 million two-year tranche, and a $500 million accordion feature, which remains available to support future growth.
Proceeds will refinance Gunvor USA’s existing $1.45 billion borrowing base facility signed in October 2022 and provide continued working capital financing for the company’s merchant activities, and fund general corporate purposes.
Reserve Base Lending Commodity Finance Deal of the Year
Winner: ONE-Dyas
Description: The syndication of banks has provided a loan through an RBL facility to ONE-Dyas, an oil and gas producer from the Netherlands. The loan will be used to refinance ONE-Dyas’ existing facility for its portfolio of operating assets in the UK, Netherland and Germany.
Africa Commodity Finance Deal of the Year
Winner: Gold Fields
Description: Gold producer Gold Fields has raised a $1.2 billion loan, with an option to increase the facility by up to $400 million. The facility has an accordion option to extend the tenor through two one-year extensions.
The loan benefits from a lower margin depending on the fulfilment of the sustainability-linked key performance indicators (KPIs). Conversely, Gold Fields will pay a premium on its margin if the KPIs are not met. The facility agreement was concluded with a syndicate of 16 banks.
Energy Commodity Finance Deal of the Year
Winner: Trafigura Trading
Description: Following a strongly oversubscribed syndication, Trafigura closed the largest facility in the North American commodity finance market at $4.54 billion in April 2023.
Europe Commodity Finance Deal of the Year
Winner: MET Group
Description: MET Group raised a €1.23 billion multicurrency revolving borrowing base facility in 2023. Proceeds will help the company in their sustainability and energy transition initiatives and can become a cornerstone for further developing the energy transition capabilities where natural gas is a critical part.
A distinctive aspect of the facility is the pan-European coverage with gas storage in 5 different European locations while overall 8 different jurisdictions have been involved. Namely: Switzerland, UK, Germany, Slovakia, Croatia, Hungary, Romania, Latvia, with the possibility to further expand to other countries and locations.
Emerging Energy Commodity Finance Deal of the Year
Winner: Greenergy
Description: Greenergy, the UK-based transport fuels supplier and biodiesel producer, rolled over its 2021 borrowing base facility in 2023, replacing it with three new facilities, and adding several structural enhancements. Chief among these was a $650 million syndicated receivables purchase facility provided on a committed basis. The process was more complicated than simply rolling over a borrowing base, requiring greater coordination between existing and new lenders, but resulted in an enhanced capital structure for Greenergy. This deal came in advance of Trafigura’s agreement to acquire Greenergy from Brookfield in March 2024.
