The UAE-based BB Energy (Gulf) has secured a two-year revolving $400m structured commodity trade finance facility from a syndicate of international banks and development agencies.
It is the first time the company has tapped the market for syndicated structured commodity financing. The firm mandated Societe Generale as the sole bookrunner for the deal in August 2012, with the Washington-based World Bank’s International Finance Corporation (IFC) joining as the lead development institution lender.
The facility is to be used by BB Energy to finance the delivery and inventory of oil products to Mauritania, a country wholly dependent on imported energy. The company won a two-year contract to supply refined oil products to Mauritania between 2012 and 2014.
Due to the revolving nature of the transaction, the deal could finance in excess of $1.5bn-worth of energy trade flows to Mauritania.
IFC stepped in to support the financing due to the continued lack of appetite among commercial banks to lend commodity finance to low income emerging markets. Without access to private sources of financing, Mauritania could be forced to dip into its foreign exchange reserves to finance energy imports, diverting funding away from much-needed food imports.
The facility was said to have closed oversubscribed, with France’s Natixis, Qatar National Bank and the Netherlands’ Rabobank joining the facility as lead arrangers. Germany’s BHF Bank and the Austria-headquartered Opec Fund for International Development joined as arrangers.