Trafigura creates US$470m structured financing product backed by commodity inventories

COMMODITIES trader Trafigura has created a US$470 million non-recourse structured financing programme backed by a dynamic portfolio of hedged commodities.

The programme will be manifested through senior variable funding notes issued by Trafigura Commodities Funding, a stand-alone vehicle incorporated in Singapore.

The proceeds of the notes will allow the issuer to buy crude oil and refined metal inventories sold by Trafigura across 12 jurisdictions in Europe, the Middle East and the Asia-Pacific. All commodities are sold on a true-sale basis, and the issuer has the right to sell each commodity back to Trafigura when the underlying contracts expire. Trafigura may also repurchase the commodities early.

With the programme in place, Trafigura can become a systematic issuer of notes backed by commodity inventories, and could ultimately seek committed term financing in the asset-backed securities market, Trafigura head of corporate finance Laurent Christophe said in a statement.

DBS Bank, Mizuho Bank, Natixis, OCBC Bank, The Bank of Tokyo-Mitsubishi UFJ and Westpac Banking Corp are the original noteholders of the programme.