Metals merchant Auramet scores oversubscribed syndicated deal with string of banks

Global precious metals trader Auramet has inked a US$235mn syndicated borrowing base facility with a group of international and national banks.

The oversubscribed deal will be used for working capital needs and comes with a US$25mn accordion feature, allowing the borrowing amount to be raised to US$260mn.

The facility also permits additional bilateral transactional credit facilities worth up to US$50mn outside of the syndicated borrowing base agreement.

ING Capital, a financial services firm and indirect subsidiary of ING Bank, acted as mandated lead arranger, bookrunner and administrative agent. Rabobank served as lead arranger.

Lenders on the deal include ING and Rabobank, as well as Bank Hapoalim, Bank of China, Brown Brothers Harriman & Co, HSBC, Macquarie Bank and Mizuho.

ING Capital notes in a statement that the facility was “strongly oversubscribed”, however a spokesperson for the firm declined to disclose by how much.

Speaking about the deal, ING’s managing director and head of commodity finance for North America, Matthew Rosetti, says: “The strong demand from our syndicate banks – in a very challenging commodity finance market – is further validation of Auramet’s strong management team and performance.”

The commodity finance sector has been thrown into turmoil in recent months, as lenders take stock of the impact of Covid-19, a dramatic plunge in oil prices and a series of fraud scandals involving commodity traders in Singapore.

In the past fortnight, ABN Amro announced that it would be ceasing all trade and commodity finance activities, citing exposure to fraudulent activity in Singapore and Germany, a historic crash in oil prices and a slowdown caused by Covid-19 as the reasons behind the decision.

The bank is believed to have been one of the worst hit by the demise of commodity trading company Hin Leong, which collapsed amidst allegations of fraud in April. ABN Amro’s overall exposure to the Hin Leong scandal reportedly stands at US$300mn, second only to HSBC.

Meanwhile Bloomberg revealed in late July that Société Générale would shut its Singapore-based trade commodity finance unit, moving operations to Hong Kong and severing ties with smaller traders – a decision reportedly prompted by the collapse of Hin Leong.

Bloomberg has also reported that BNP Paribas has suspended all new commodity trade finance deals pending a review of its activities in Europe, the Middle East and Africa. The bank is not believed to have had any exposure to Hin Leong, however.

The post Metals merchant Auramet scores oversubscribed syndicated deal with string of banks appeared first on Global Trade Review (GTR).

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