News: ABN Amro’s fund deal for JSW Steel

(ACERC 30/08/2006) Geneva - ABN Amro Bank has helped structure a unique loan deal which enables JSW Steel receive an advance payment against a long-term export contract from a Switzerland firm. The Swiss firm, Duferco SA, raised a seven-year $150 million syndicated loan facility to explicitly transfer the proceeds as advance payment against long-term export contract.

JSW Steel is the first company in India and also in the the Asian region to receive such a payment, which speaks volumes of the confidence not only in Duferco but also JSW. ABN Amro was the sole underwriter, mandated lead arranger and bookrunner for the seven-year facility. The deal is structured as a pass-through pre-export finance facility with the funds being advanced to Duferco for the pre-payment of steel from JSW. The facility is repaid through the delivery of steel products from JSW to Duferco.

It simultaneously acted as mandated lead arranger and facility agent for $ 50 million, one year club pre-export finance facility on behalf of Duferco's associate, Nina Trading SA, also to pre-finance the export of steel products by JSW.The one-year deal mirrors Duferco structure, but instead of having Duferco as the borrower, the facility utilises an SPV, with Duferco acting as the end buyer of the steel products delivered to its associate Nina Trading SA by JSW.