Deutsche Bank sets industry record with China’s largest structured commodity trade finance facility

Deutsche Bank today announced that it has, in collaboration with Duferco, successfully arranged a USD1.5 billion two-year syndicated structured steel pre-payment term loan facility for Tangshan Iron & Steel Group Co., Ltd (‘Tangsteel’).

Tangsteel is a key subsidiary of one of the largest state-owned steel producers in China. This deal sets a new industry record as the largest structured commodity trade finance facility for a Chinese company, surpassing the previous record of USD800 million, which was also lead arranged by Deutsche Bank for Tangsteel in 2013.

Deutsche Bank is the Coordinating Mandated Lead Arranger and Bookrunner for this fourth consecutive structured pre-payment finance facility for Tangsteel – the first closed in May 2012 for USD200 million, the second in February 2013 for USD300 million and the third in October 2013 for USD800 million. Deutsche Bank AG, Hong Kong branch acted as the Facility Agent and Account Bank, and DB Trustees (Hong Kong) Limited as the Security Agent for all four facilities.

The oversubscribed facility has been well received by the market with participation from 22 banks globally. The funding will be used to facilitate and support Tangsteel’s exports of steel products to Duferco Asia Pte Ltd and Duferco SA (collectively ‘Duferco’), via Tangsteel’s offshore trading platform, Sinobiz Holdings Ltd.

Commenting on this important industry milestone, Frank Wu, Asia Pacific Head of Structured Commodity Trade Finance, Global Transaction Banking at Deutsche Bank, said: “This structured pre-payment finance facility is our fourth consecutive loan for Tangsteel and the largest facility of this kind ever arranged for a Chinese company. The success of this landmark transaction underscores Deutsche Bank’s strong partnership with Duferco and Tangsteel and clearly demonstrates the Bank’s strength in arranging structured commodity trade finance facilities in the Asian market.”

Yidong Li, Vice General Manager of Tangsteel, said: “We are delighted to be working with Deutsche Bank again. This pre-payment structure has proven to be the ideal source of funding to support of our long-term strategy to internationalise our business, in particular steel exports. We look forward to continuing to expand our partnership with Duferco, Deutsche Bank, and the syndicate group of participating banks.”

Thomas Patrick, Finance Director at Duferco International Trading Holding S.A., added: “We are pleased to see that, once again, this pre-payment facility was oversubscribed, enabling us to grow our partnership with Tangsteel. Deutsche Bank’s expertise and execution has been instrumental in the completion of this arrangement.”