Trafigura launches pioneering new financing for the securitisation market - Trafigura Commodities Funding Pte Ltd, a USD470 million non-recourse inventory funding programme
Geneva, 20th November, 2017 – Trafigura, one of the world’s leading independent commodity trading and logistics companies, has launched a pioneering programme for the securitisation market - Trafigura Commodities Funding Pte Ltd (“TCF” or “the Issuer”), a USD470 million, non-recourse funding programme backed by inventories of crude oil and refined metals.
TCF, a stand-alone vehicle incorporated in Singapore, issued USD470 million of senior variable funding notes which were placed on a private basis with six financial institutions. The proceeds of the notes, as well as a subordinated loan from Trafigura, will enable TCF to purchase crude oil and refined metal inventories sold by Trafigura across twelve jurisdictions in Europe, the Middle East and Asia-Pacific. All the commodities are sold on a true sale basis under a commodity purchase agreement, granting the Issuer the right to sell each commodity back to Trafigura at the expiry of the underlying contracts. Trafigura also has the flexibility for early repurchase of the commodities owned by the Issuer.
“The launch of Trafigura Commodities Funding Pte Ltd is a milestone for the financing of commodity inventories on a non-recourse basis and for our industry,” said Laurent Christophe, Trafigura’s Head of Corporate Finance. “This platform enables Trafigura to become a systematic issuer of notes backed by commodity inventories and ultimately to seek committed term financing in the asset backed securities markets.”
Trafigura is already an experienced participant in the securitisation market having set up a “AAA” rated trade receivables securitisation programme -Trafigura Securitisation Finance Plc (“TSF”) - in 2004. The company has been successfully funding this programme for the last 13 years from the bank-sponsored conduit market and the term ABS market. “Our ambition with TCF was to replicate for inventories what we have successfully achieved for trade receivables,” continued Laurent Christophe. “The process of establishing TCF has been a long journey and we are grateful to the banks involved for their support.”
The transaction’s innovative architecture addresses the many risks related to the ownership of commodities such as price, liquidity and basis risk, damage and theft of goods and storage control. TCF has also been designed to withstand the default of Trafigura via collateral and liquidation agency agreements contracted with Natixis.
DBS Bank Ltd (“DBS”), Mizuho Bank, Natixis, Oversea-Chinese Banking Corporation (“OCBC”), The Bank of Tokyo-Mitsubishi UFJ (“BTMU”) and Westpac Banking Corporation (“Westpac”) are participating as original noteholders in the programme. White & Case (London) advised Trafigura on the transaction and Allen & Overy (London) advised the noteholders.
For further information please contact:
Trafigura’s Global Press Office: +41 22 592 45 28 or email@example.com
For high resolution images visit: https://www.flickr.com/photos/trafigura_images/
Notes to editors
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including 49.6 percent owned global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; 50 percent owned DT Group which specialises in logistics and trading; and Galena Asset Management. The Company is owned by around 600 of its 4,100 employees who work in 61 offices in 36 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD98.1 billion in 2016. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade.