Deutsche Bank provides Tangsteel with USD800 million structured pre-payment finance facility

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Deutsche Bank today announced that it has together with Duferco, successfully arranged a USD800 million structured steel pre-payment term loan facility for China-based Tangshan Iron & Steel Group Co., Ltd (‘Tangsteel’), making it the largest structured commodity trade financing facility ever completed for a Chinese company.

Deutsche Bank acted as the Coordinating Mandated Lead Arranger and in close consultation with Duferco, secured the participation of ten international banks to structure the 24-month term loan, which will facilitate the pre-payment of steel products exports to Duferco Asia Pte Ltd and Duferco SA (collectively ‘Duferco’), via Tangsteel’s Hong Kong-based trading platform − Sinobiz Holdings Ltd.

This facility is the third consecutive pre-payment financing lead arranged by Deutsche Bank and Duferco, for Tangsteel – the first closed in May 2012 for USD200 million and the second in February 2013 for USD300 million. DB Trustees (Hong Kong) Limited acted as the security agent and Deutsche Bank AG, Hong Kong Branch as the facility agent and account bank for these oversubscribed facilities.

Frank Wu, Regional Head of Structured Commodity Trade Finance – Asia Pacific, Global Transaction Banking at Deutsche Bank said: “We are delighted to have arranged three pre-payment structures for Tangsteel over the past 18 months. Both Tangsteel and Duferco are world-class companies in the steel industry and have long-standing relationships with Deutsche Bank. The overwhelming market response to this transaction clearly demonstrates the strong interest in this type of innovative structured trade financing solutions.”

Yidong Li, Vice President of Tangsteel said, “We are pleased with the continued funding support we have received from a syndicate of banks led by Deutsche Bank, totalling USD1.3 billion, especially given the recent global economic conditions. We are committed to building on our success in the steel business and we look forward to continuing to work with Duferco, as well as this group of lending banks.”

Thomas Patrick, Chief Financial Officer of Duferco International Trading Holding S.A., added: “Our relationship with Tangsteel is expanding rapidly and the pre-payment financing facilities we have arranged together with Deutsche Bank are a clear example of this dynamic growth. Deal subscriptions have come from select relationship banks, and as such, we have been working with a strong syndicate of banks having a good understanding of both our relationship with Tangsteel and our business model.”