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Appetite returns for soft commodity finance
19 May 2010
Appetite for softs commodity financing is returning. Dickon Harris examines developments across the emerging markets.
Read more:
soft commodity finance
Cosan
Petrobrás Biocombustivel
ethanol Brazil
Russia grains
Olam
Africa softs
OFID IFC
Export Trading Group
This article appears in the May print edition of Trade Finance under the headline Green shoots take root
The good news in 2010 is that deal flow has improved for the the softs commodity market. Banks are actively competing to offer funds to the top tier traders, and increasingly the larger producers.
“In today’s market, banks are either offering clean lending to international trading companies, doing deals with top tier corporates in their respective sectors with certain limited risk mitigant features, or arranging highly collateralised business with producers that have a good and long-term track record,” explains WestLB’s director of commodity finance, Latin America, Martin Schmitz.
The clearest sign yet that general appetite is back is that tenors have been slowly increasing. The last two years saw both deal volumes and tenors dramatically reduced by constrained banks and trading companies looking to cut down...
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