Gunvor has closed an oversubscribed €450mn sustainability-linked borrowing base facility, this time to support operations at its refinery in Ingolstadt, Germany.
The deal includes performance commitments related to the energy commodity trader’s sustainability targets, with the interest rate dependent on year-on-year improvements in 15 social impact, governance and environmental criteria, which will be reviewed by an external auditor.
The facility replaces a revolving facility, which was originally signed in 2017 to replace an existing US dollar-denominated borrowing base facility and a euro-denominated receivables factoring programme. Proceeds will be used to cover the working capital requirements of the refinery. This deal was oversubscribed to €520mn, which Gunvor says demonstrates the interest in the market for this type of financing.
“Despite the recent market volatility and uncertainty, it is very promising to see such strong lender support for this approach,” says Muriel Schwab, Gunvor’s CFO.
UniCredit acted as bookrunner, sustainability co-ordinator, and was joined as mandated lead arranger by CA Indosuez, DZ Bank and KfW Ipex-Bank. China’s ICBC came in as lead arranger, while Bank of China, Commerzbank, Erste Group Bank, First Abu Dhabi Bank and Raiffeisen joined as arrangers.
In 2018, Gunvor became the first energy commodities trading company to close a sustainability-linked finance deal, under which the company received a discount on its interest rate as sustainability targets were met. Had it underperformed, a premium would have been added instead. That original US$725mn facility was renewed in February this year, under the same terms.
With this latest deal, Gunvor now has well over US$1bn committed to sustainability-linked financing, and says it will continue to work with its banks to find new areas to tie its financing to performance on areas such as emissions reduction.
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