On May 6, 2009, London-based Stemcor, the world's largest independent steel trader, announced the completion and signing of a $480 million multicurrency revolving credit facility.
According to the company release, BNP Paribas, Fortis Bank (
UK branch), ING Bank N.V., Société Générale Corporate & Investment Banking and The Royal Bank of
Scotland plc were bookrunners and mandated lead arrangers, while Credit
Europe Bank, Credit Suisse, DBS Bank, Standard Chartered Bank and State Bank of
India were mandated lead arrangers.
Stemcor stated that the transaction received very strong support from company's relationship banks. The syndicate comprised a total of thirty one banks and, due to healthy demand, the launch amount of $400 million was increased to $480 million.
The proceeds of the revolving credit facility will be used to repay the outstanding drawings under the company's existing 364-day $550 million revolving tranche, which matures on 12 May, 2009, and for general purposes in the ordinary course of business. A further $150,000,000 revolving tranche will mature in May 2011.
Commenting on the credit facility, Michael Broom, director of group treasury at Stemcor, said, "Over the forthcoming year, with lower steel prices and reduced trade flows, we anticipate a substantially reduced need for working capital and hence we scaled the amount back. Given the current economic climate and the sharp decline in demand for commodities - especially steel - it is particularly pleasing that our valued banking partners have continued to show such confidence in Stemcor. We are now in a strong liquid position for the next twelve months and will be poised to book additional business when the market picks up, hopefully in the latter part of 2009."