Trafigura Group Pte Ltd., a market leader in the global commodities industry announced the closing of its new 365-day European multi-currency syndicated revolving credit facility (the “365-day ERCF”) totaling USD1.85 billion, as well as the extension and increase of its USD3.65 billion 3-year facility. The facilities, which include the Company’s first sustainability-linked loan structure, were very well received by the bank market partly due to the Company’s record performance in 2020. The 365-day ERCF was initially launched at USD1.5 billion and closed substantially oversubscribed.
The 365-day ERCF will be used to refinance the maturing USD1.9 billion 365-day facility dated 6 March 2020, as well as for general corporate purposes. In addition, the Company decided to exercise the third extension option available on the 3-year tranche of its 2018 European RCF (the “3-year ERCF”), extending the facility by 365 days to maintain a 3-year tenor whilst simultaneously increasing the tranche to reach USD 3.65bn.
As announced in its 2020 Responsibility Report, Trafigura’s progress in sustainability and responsible business practices, and the potential to achieve significant further milestones in its ESG performance, have enabled the Company to structure its 365-day ERCF and 3-year ERCF, as sustainability-linked loans (“SLL”). This new SLL structure includes three KPIs to be tested annually and verified by a third party expert, relating to cutting operational greenhouse gas emissions (Scope 1 & 2), responsible sourcing of metals (in line with ISO 20400:2017) and growing Trafigura’s renewable power portfolio. The facility agent will apply a penalty or discount on the margin, depending on the number of KPIs met each year.
Christophe Salmon, Group Chief Financial Officer for Trafigura, said: “We have successfully refinanced Trafigura’s one-year flagship credit facility despite high volatility and economic uncertainty throughout the syndication period. The ERCF is a key pillar of Trafigura’s financial model, which is designed to give us sustained access to liquidity and capital, including during periods of extreme volatility in the global economy. The resilience and efficacy of our funding model has been tested over the last year, proving its strength once again. We continue to be pioneers within our industry by closing the first sustainability-linked syndicated bank facility at a corporate level. It demonstrates our focus on ESG and commitment to continue our strong progress in improving ESG performance across our global business.”
The 365-day ERCF was arranged by Mandated Lead Arrangers & Bookrunners (“MLAB”) Bank of China Limited, London Branch; ING Bank N.V.; Société Générale; UniCredit Bank AG as Active MLABs and Coöperatieve Rabobank U.A. acted as Passive MLAB. Natixis and UniCredit Bank AG acted as Sustainability Coordinators. A total of 34 financial institutions joined the 365-day ERCF during syndication.