Trafigura Group, one of the world’s leading independent commodity trading companies, has today announced the successful raising of USD400 million through a US Dollar Perpetual Subordinated Bond. The Bond issuance drew very strong and wide support from institutional investors and private banks in Asia and Europe, with more than 160 investors participating in the transaction.
Following strong momentum during marketing and book building, resulting in an oversubscription of 3.75 times, Trafigura was able to significantly tighten pricing from the initial price talk of 6.25 percent to the final level of 5.875 percent, the tightest price achieved by Trafigura for a perpetual bond. Listed on the Singapore Stock Exchange and structured as a non-call six-year subordinated bond, the issuance set the longest tenure attained by the Group in the public debt capital markets.
The new hybrid instrument is the fifth Perpetual Subordinated Bond issued by Trafigura since its inaugural transaction in 2013 and its third public corporate bond issued within the last 12 months, reflecting the Group’s ability to regularly access global capital markets in senior or perpetual formats, as well as in different currencies.
Proceeds of the issuance will be used to partially repay the Group’s outstanding USD800 million Perpetual Bond issued in 2017, following a tender offer that was launched at the same time. The Bond will benefit from an equity treatment under the IFRS accounting standard.
Christophe Salmon, Group Chief Financial Officer for Trafigura, said: “We are delighted to have successfully issued a new Perpetual Subordinated Bond at historically low pricing and long duration. The quality and diversity of investors reflects the wide appeal that Trafigura can draw from the fixed income investor community. Their level of engagement during the marketing phase around sustainability-linked topics allowed us to demonstrate Trafigura’s sector leadership in transparency and in Environmental Social Governance, as well as the integration of the energy transition into our corporate strategy.”
Joint bookrunners on the transaction were Credit Suisse acting at Global Coordinator, Citigroup, DBS Bank and Standard Chartered Bank.
