Gunvor launches new $540M biodiesel borrowing base
Gunvor Group has successfully closed a new $540 million borrowing base facility to support the company’s biodiesel trading activity. The facility drew strong support among Gunvor’s banking partners, which align with its strategy to promote cleaner products with greener feedstock components complying with EU climate targets to reduce greenhouse gas emissions. The syndication launched at $400 million and was oversubscribed to $595 million.
The facility is structured around Gunvor’s biofuel inventory positions located at both the origin and destinations countries, including the company’s two biofuel processing plants in Spain. Imports are made in strict conformity with the EU regulation applicable on biofuel products. The facility’s pricing is competitive and reinforces the group’s funding resources with its growing biofuel activity.
“Biofuels, along with other ‘transitional’ commodities, are increasingly important to Gunvor’s trading mix,” said Muriel Schwab, Gunvor Group’s chief financial officer. “Our banking partners have expressed considerable support for trading cleaner products as Gunvor pursues its energy transition strategy.”
Gunvor’s biofuel trading desk has been active since 2009 and is involved in the entire supply chain of carbon reduction in the fuel sector, including risk management and logistics. On a global basis, Gunvor sources a variety of feedstocks for the biofuel industry, such as vegetable oil, waste residues and byproducts, and then processes them in the company’s own facilities to produce low CO2-emitting biofuels.
Gunvor operates several blending facilities in Asia, the U.S., and throughout Europe, where the company prepares biofuels for end-consumers across the world. Gunvor also trades CO2 tickets to complement the CO2 reduction strategy of the company. Gunvor maintains two wholly-owned biodiesel plants in Spain.
At the end of first-half 2020, approximately 50 percent of Gunvor’s total trading volumes consisted of “transitional” commodities, including biofuels, natural gas and LNG, as defined by the EU taxonomy for sustainable activities.
The bookrunners for the deal were Credit Agricole and Rabobank, which served respectively as documentary agent and facility/security agent. Participating banks also included CA Indosuez (Switzerland) SA, Coöperatieve Rabobank UA, Citibank N.A., Unicredit bank AG, Mizuho Bank Europe N.V., UBS Switzerland AG, Société Générale, and Sumitomo Mitsui Trust Bank, Limited (London Branch).