Gunvor Closes $365mn Loan Facility

Global commodities trader Gunvor said on December 21 it had closed €300mn ($365mn) in financing, consisting of a syndicated, pan-European gas repurchasing (repo) facility covering multiple jurisdictions in Europe with a shared security package.

Gunvor said it would use the funds to expand its gas activities in Europe, where it is already one of the largest physical gas traders. This "innovative" financing, Gunvor said, allowed its banking partners to take part in a financing structure with "access to a robust security packaged based on a true sale transaction through a security trust and a segregated account to collect sales proceeds."

"This uniquely structured trade finance solution gives Gunvor the ability to secure, scale, and diversify access to competitive financing," it said.

"Financing European natural gas trading is challenging for trading companies, given the inherently complex nature of its logistics, which consist of pipeline and storage capacities, as well as the regulatory environment, which operates across multiple jurisdictions," Gunvor's head of origination and structured trade finance Tawfik Sadfi said. "This results in a situation in which there is no common framework to tackle ownership rights or pledges over fungible goods. In working together with our banking partners, we have overcome these challenges to establish an innovative financing structure with competitive pricing."

The facility was structured by Dutch banking firm Cooperatieve Rabobank with its commodity trading division  Brightfield Trading acting as grantor and Gunvor as originator. Rabobank will act as the facility's co-ordinating agent and trustee, as well as bookrunner, mandated lead arranger and security agent, while Gunvor will be the logistic agent.

Gunvor is the world's largest independent trader of LNG, having shipped some 16mn metric tons of the commodity in 2019 after overtaking rivals Trafigura and Vitol in the previous year.

In an email, Gunvor told NGW: "The gas repo works as a true sale structure with the security package being pushed through the grantor into a security trust. There is then a co-ordinating agent and trustee that ensure that the operational
aspect of the facility are compliant with the documentation, while the participating banks are joining the facility through a funded risk participation."