A Singapore-based commodity trading company has diversified
its sources of financing by becoming in November the first
systematic issuer of notes backed by commodity inventories.
Basel III rules, which have increased capital requirements for
trade finance transactions, were a key driver of the deal,
leading Trafigura to develop an innovative inventory
securitisation framework to secure short-term funding.
The initial $470 million deal and associated programme was
set up to replicate Trafigura’s trading business
using a bankruptcy remote special purpose vehicle (SPV),
Trafigura Commodities Funding (TCF).
According to White & Case partner Chris McGarry,
who advised the issuer, most of the documents needed to be
drafted from scratch to record the many unique features of TCF.
Trafigura’s existing securitisation documentation
dating back to 2004 (when the company started its original
receivables programme) and Trafigura’s repo
documentation provided reference for some of the boiler plate
and mechanical provisions....