Trafigura's bonds show new financing route for commodity traders

Singapore

FINANCING is the lifeblood of commodity traders - as investors would have observed from Noble Group's struggle to return to profitability amid constrained access to financing facilities.

In this respect, the move by Trafigura, one of the largest oil traders in the world, to sell inventory-backed bonds to six banks and eventually to the capital market in future, marks a new milestone in the commodity financing space and offers a new funding model for other commodity traders to adopt.

Trafigura on Monday said it has sold US$470 million of bonds to six banks including DBS …