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Gunvor leverages gas assets in €570mn working capital facility

Energy trader Gunvor says it has brought on board four new banks to close an upsized natural gas inventory financing deal, utilising stored product to attract working capital.

The syndicated sale and repurchase (repo) facility gives the trader access to up to €570mn in working capital, almost doubling the most recent equivalent facility it signed in 2020, which was worth €300mn.

Natural gas prices have skyrocketed since Russia, a major supplier to Europe, invaded Ukraine in February this year.

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Gunvor says the “innovative” facility has also been expanded to cover eight natural gas storage locations, up from three in the 2020 facility.

“The renewal of the facility allows Gunvor’s banking partners to participate in a natural gas financing structure with access to a robust security package based on a true sale transaction,” the company says in a statement. “This uniquely structured trade finance solution gives Gunvor the ability to secure, scale, and diversify access to competitive financing.”

Rabobank, which helped conceive the original 2020 transaction, continues its role as co-ordinating agent, trustee and lead participant. Its subsidiary Brightfield Trading is acting as grantor, with Gunvor itself the originator and logistic agent.

CA Indosuez, ING and UBS return as participants in this year’s facility and have been joined by Die Sparkasse Bremen, Erste Group Bank, Mizuho and Raiffeisen Bank International.

“Gunvor and Rabobank launched this transaction with the ambition to create an innovative working capital finance solution for Gunvor’s European natural gas activities that would be flexible, scalable, and cost competitive,” says Robin de Milliano, Rabobank’s senior product manager for structured inventory products.

The Dutch lender “is delighted that we have been able to build on our excellent partnership to successfully expand the structure in both scale and in scope”, De Milliano adds. Norton Rose Fulbright was the bank’s lead counsel on the transaction.

Milos Spasic, Gunvor’s head of structured and trade finance for energy in Emea and LatAm, says: “Thanks to a doubling of support from our banking partners, the flexibility and scope of this facility increases considerably. We’re now able to cover an expanded number of European storage facilities at a critical time in the market. This facility remains unique to the market.”

The deal caps a flurry of financing announcements from Gunvor, with the trader closing a US$1.64bn sustainability-linked revolving credit facility in Europe and a US$1.45bn uncommitted syndicated borrowing base facility for Gunvor USA in November.

The privately-held company, which trades crude oil, natural gas, refined products and other energy-related goods, reported an unaudited US$2bn gross profit for the first half of 2022.

The post Gunvor leverages gas assets in €570mn working capital facility appeared first on Global Trade Review (GTR).

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