Trafigura offers to buy back US$800 million of debt securities

SWISS commodities trading giant Trafigura Group is offering to purchase in cash US$800 million in aggregate principal amount of perpetual resettable step-up subordinated securities.

It also said it intends to issue new US dollar-denominated perpetual resettable step-up subordinated securities; some proceeds of which may be used to finance the tender offer and the remaining for other corporate purposes.

The group has yet to announce the pricing and maximum acceptance amount of the new securities, but said it will do so before the expiration deadline on Sept 22, 2021.

The tender offer was made "as part of the offeror's optimisation of its balance sheet and capital structure", it said in a bourse filing on Monday.

Trafigura expects the tender offer price will be 101.162 per cent of its aggregate principal amount; it will also pay accrued and unpaid interest on the securities up to but excluding the settlement date on Sep 24.

The tender price is the value of all remaining payments of principal and interest on the securities up to and including Dec 21, discounted to the settlement date at the fixed purchase yield of 2.049 per cent, minus accrued interest.

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Trafigura said securities purchased will be cancelled, while securities not validly tendered and accepted for purchase will remain outstanding. Outstanding securities may be redeemed at their principal amount at any time during the 90-day period from Dec 21, 2021 to Mar 21, 2022.

The group added that qualifying holders who have received a new security allocation and who have validly tendered their securities for purchase will be given preference in the tender offer.

The securities may only be offered for sale in the denomination of US$200,000, or in integral multiples of US$1,000 in excess of such amount.

The tender offer period will begin on Sept 13 and end on Sept 22. The settlement date for both the tender offer and new securities is expected to be on Sept 24.

Citigroup Global Markets, Credit Suisse (Singapore), DBS and Standard Chartered Bank are the dealer managers of the transaction, while Citibank London is the information and tender agent.

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