Trafigura $2.2 Billion Credit Terms Improve Amid Market Turmoil

  • Syndicated and term loans are oversubscribed by $600 million
  • Trafigura bond hit record low Thursday amid Glencore fallout

Trafigura Pte Ltd. closed the equivalent of $2.2 billion in loans in three oversubscribed facilities, winning better terms for the Asian credit despite the turmoil in commodity markets.

The lending margins were “significantly tighter” than last year, a Geneva-based spokeswoman for Trafigura said by e-mail on Thursday. The exact terms obtained from 28 banks participating in the facilities were not disclosed in a statement issued by the world’s second-largest metals trader.

The closing of the Asian lending facilities comes amid intense turmoil in commodities markets as the price of oil, copper and other commodities has plunged amid weakening demand from China, the biggest raw materials consumer. Shares of rival trading house Glencore Plc, which is also the world’s largest miner of thermal coal, have fallen 68 percent this year on concerns about its debt load and ability to withstand sinking prices.

While Trafigura posted record first-half profit of $654 million, the yield on the firm’s 606.7 million-euro bond, maturing in 2018, widened by 49 basis points to a 10.85 percent as of 4:10 p.m. in London. The yield has doubled over the past seven weeks.

The Asia loans were oversubscribed by $600 million and consisted of a $1.32 billion 364-day revolving credit facility, a $625 million three-year loan facility and a one-year Chinese yuan denominated tranche of $255 million, Trafigura said.

Before it's here, it's on the Bloomberg Terminal.