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Trafigura lands US$3bn ECA-backed financing to supply US LNG to Germany

Global commodity trader Trafigura has agreed a US$3bn four-year loan, partly guaranteed by Euler Hermes Aktiengesellschaft, the German export credit agency (ECA), to deliver “substantial volumes” of gas into the European gas grid.

The syndicated deal, which was jointly arranged and underwritten by Deutsche Bank and another unnamed international bank, brought in 25 banks and was 1.6 times oversubscribed.

The loan is secured in part by the German government’s untied loan guarantee programme, by which its ECA can provide cover for activities that increase the country’s supply security of raw materials.

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Under the terms of the agreement, Trafigura will supply gas from its global portfolio and US LNG contracts to Securing Energy for Europe – the gas business formerly known as Gazprom Germania and now under the long-term administration of the German government. The first gas delivery took place on November 1.

“We are proud to be contributing to Europe’s energy security by supplying this significant volume of gas to Germany backed by our extensive portfolio and long-term US LNG contracts,” says Richard Holtum, head of gas and power trading for Trafigura.

The deal comes just over a month after the trader entered another German government-backed deal to deliver up to 500,000 tonnes of non-ferrous metals into the country under a five-year supply agreement.

That US$800mn deal – which, like this newer gas agreement, also included a review of the trader’s environmental, social and governance policies and performance – was underwritten and arranged by Société Générale and syndicated to seven participating banks. It likewise benefitted from an ECA guarantee provided under Germany’s untied loan programme to secure the long-term delivery of strategic commodities, at a time when concerns are mounting over supply disruptions to critical minerals such as refined copper, nickel and palladium.

 

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