Energy trader Gunvor has picked up six new banks for a syndicated borrowing base facility to finance its liquefied natural gas (LNG) operations, boosting the size of the deal to US$1.56bn.
The facility, which was inaugurated in late 2021, was oversubscribed by around US$430mn, according to the Geneva-headquartered company. Global natural gas prices have soared following the invasion of Ukraine by Russia, a top natural gas exporter.
The deal is structured on the company’s global LNG flows and shipping activities and will be used to finance physical and derivative positions, the company says.
“The very strong interest this financing has received from such a diversified pool of lenders reflects the global nature of Gunvor’s LNG activity,” says Tawfik Sadfi, head of structured trade finance at Gunvor Group. “LNG has secured a place as strategic commodity for both the energy transition and energy security.”
The facility attracted a milieu of banks from Asia, Europe and the Middle East. Rabobank, Natixis and Société Générale return as bookrunners and mandated lead arrangers (MLAs) on the facility and are joined by Oversea-Chinese Banking Corporation and DBS.
Abu Dhabi Commercial Bank, Industrial and Commercial Bank of China and ING are senior MLAs, alongside new joiners Qatar National Bank and Mizuho.
CA Indosuez and SMBC are acting as MLAs, with new lenders Bank of China and the Commercial Bank of Dubai joining the facility in the same capacity.
AfrAsia Bank and the National Bank of Ras Al Khaimah have joined the facility as arrangers, alongside Erste Group Bank, First Abu Dhabi Bank, Mashreq Bank and Sumitomo Mitsui Trust Bank.
KFW Ipex-Bank, which was a lead arranger in the 2021 facility, and Raiffeisen Bank International, an arranger, did not renew their participation.
Like the previous year, the facility is not sustainability-linked but Gunvor is required to report CO2 emissions to “establish transparency for the carbon footprint of the company’s LNG value chain”.
Ludivine Labarre, Société Générale’s global head of trade commodity finance, says the “landmark LNG borrowing base facility embodies the long-term strategic move of Gunvor to support LNG transitional commodities contributing to both low-carbon future and energy security”.
“Gunvor’s clearly defined trading strategy and business model, hand-in-hand with its sustainability commitments, continue to attract market confidence while paving the way for new ESG commitments linked to LNG activity,” she adds.
Gunvor has committed to trimming its scope 1 and 2 emissions, meaning those produced directly by its activities, by 40% by 2025. However the company’s sustainability report for 2021 shows the vast majority of emissions attributable to its LNG trades come from scope 3 emissions, which occur when the gas is burned by the end-customer.
The trader renewed a US$1.64bn sustainability-linked revolving credit facility for its European units last year. In December it also closed a €570mn syndicated working capital deal utilising its natural gas inventory for sale and repurchase transactions.
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