Trade & Commodity Finance

Our Practice

Our international trade & commodity finance practice consists of experienced specialist lawyers from a multi-disciplined base who advise on the whole range of trade & commodity finance products. Our lawyers regularly provide advice on large, complex transactions, offering innovative solutions, sector and industry knowledge and a commercially focused approach to transactions.

Through our network of offices in Europe, the Middle East and Asia and the strong relationships that we have formed with law firms throughout Africa, we are able to advise on trade & commodity finance transactions in jurisdictions throughout the world, drawing on the skills of our commodities, regulatory, tax, insurance, environmental, dispute resolution and restructuring and insolvency specialists as necessary and providing clear and innovative advice (including on OHADA law and Islamic finance structures) in those trading jurisdictions and trading environments for which trade & commodity finance is most suited.

We understand the individual nuances of different assets (including physical and financial commodities), sectors, industries and products and we have the commitment, resources, experience and know how to get deals done, whatever and wherever they are. For a copy of Structures & Solutions in Trade Finance click here.

Simmons & Simmons is uniquely placed to support the activities of participants in the international trade & commodity finance market through the services that we are able to offer our clients:

Full product coverage

Our experienced lawyers regularly advise on the whole spectrum of trade & commodity finance products, including:

  • commodity financing, such as prepayment financing, warehouse/inventory financing and monetisation, commodity transit financing, borrowing base financing and commodity repo transactions
  • receivables financing, such as pre-export financing, invoice discounting and supply chain finance programmes
  • export credit agency-backed financings
  • trade finance instruments.

Structuring insight

Our first-hand knowledge of the issues that may arise on the restructuring and enforcement of trade & commodity finance products and the experience of our highly-regarded trade & commodity finance dispute resolution team mean that we are ideally placed to advise clients on how best to structure and document trade & commodity finance transactions in order to best protect them and to avoid or mitigate against issues arising on the transaction in the future.

Sector and industry knowledge

We act for many different types of participant in the trade & commodity finance market from lenders (including major international trading and commercial banks and funds) and borrowers (including trading companies), to pipeline and warehouse operators and beneficiaries of trade instruments, and so it is important for us to understand the sectors and industries in which they operate.

We have extensive experience of transactions involving all of the major commodities and understand the infrastructure that is in place to store, process and transport them. We are able to use that experience to give our clients practical advice as to how to structure trade & commodity finance transactions to achieve the least operational inconvenience to them and their clients whilst ensuring that they are properly protected.

Experience

Representative recent transactional experience of lawyers in the Simmons & Simmons trade & commodity finance practice includes:

Concentrates borrowing base facility

  • advising MRI Trading AG on a US$110m secured borrowing base facility to finance its metals concentrate storage, blending, sale and related margin financing operations in Malaysia and Oman.

Borrowing base facility enforcement

  • advising the lenders on the enforcement of a secured borrowing base facility and the subsequent recovery process on the insolvency of a large European refinery group.

Pre-export financing

  • advising Standard Chartered Bank (Hong Kong) Limited on a pre-export and import revolving facility to Wagner Equipment to finance its Cat mining trucks and equipment import activities in Mongolia. This deal was named as Best Structured Trade Finance Solution in Mongolia by The Asset Asian Awards 2014.

Receivables Finance

  • advising RBS Invoice Finance on its standard form documentation and operational procedures relating to a customer's debtors contracted or incorporated in the PRC.

Warehouse financing

  • advising the lender on a revolving warehouse loan facility backed by trade receivables warehoused in three SPVs and involving 15 jurisdictions.

ECA-covered export financing

  • advising a syndicate of Chinese and European banks led by Barclays on the granting of an English law governed ECA-covered US$130m facility to South African TMT group Telkom, supported by a Sinosure insurance policy.

Trade finance facility

  • advising a bank on a trade finance facility for Hong Kong based Sinochem and its UK subsidiary.

Structured letter of credit

  • advising a bank on structured letter of credit transactions used to fund the cost of tanker transport for cargos of crude oil.

Syndicated bills of exchange

  • advising a bank on its participation in a syndicated bills of exchange purchase facility for a Middle Eastern oil trading company.

Supply Chain Finance

  • advising a number of UK and international banks on their supply chain Finance programmes and product and documentation launches to various jurisdictions in Asia.

Oil borrowing base facility

  • co-advising Castleton Commodities International LLC in connection with its US$3.75bn committed borrowing base working capital facilities, which will fund general corporate purposes and finance the Company’s acquisition of Morgan Stanley’s Global Oil Merchanting business.

Metals borrowing base facility

  • co-advising Freepoint Commodities LLC in connection with its US$1.3bn committed borrowing base facility, which finances the physical merchant activities in Freepoint’s global commodities businesses.

Prepayment financing

  • acting for a European based trading company on its prepayment facility and related security and offtake contract with a Chinese supplier of metallurgical coke.

Industrial metal inventory financings

  • advising a bank in relation to the structuring of industrial metal commodity inventory financings and transit financings in and between various developed and developing markets jurisdictions.

Post-export Finance / Deferred Payment Facilities

  • acted for the trading subsidiary of a major international bank in respect of a US$60m purchase and on-sale on deferred payment terms of liquid petroleum gas from a Hong Kong incorporated trading company.

Commodity repurchase transactions

  • advising a leading commodities bank on its metal commodity repurchase terms with specified trading companies in over 25 London Metal Exchange (LME) and non-LME jurisdictions.

Cross-border trade receivables

  • advising a number of banks on cross-border trade receivables structured financings involving up to 10 jurisdictions.

Trade finance documentation

  • advising a range of international banks on their bilateral trade finance documentation, including for repurchase-style physical transactions, trade finance facilities, documentary credit and payment guarantee negotiation and support (disclosed and silent).

Agri-commodities

  • advising a Dutch trading bank on a prepayment facility and advance payment guarantee from a PRC bank as security in relation to the sale and purchase of cross border fertiliser supplies.