1. TRAFIGURA COMMODITY FUND (TCF)
Case Study on Inventory Backed
Bonds in Singapore
AceMBA
A Comprehensive reference for business students
2. INTRODUCTION - TRAFIGURA
Commodity
Trading Company
Structured
Commodity
Financing
Core
Business
Singaporean Multinational Trading
Company founded in 199301
02
Trading in Oil & Petroleum Products,
Metals & Minerals and Shipping &
Chartering
03
Launched bonds for a structured
financing program backed by
portfolio of commodities
AceMBA
A Comprehensive reference for business students
3. BUSINESS MODEL - TRAFIGURA
AceMBA
A Comprehensive reference for business students
4. STRUCTURED COMMODITY FINANCING (SCF)
3 main commodity groups:
Metals & mining, Energy, and Soft
commodities
Utilised by primarily
producers, trading houses and
lenders
Provides liquidity management
and risk mitigation
AceMBA
A Comprehensive reference for business students
5. TRAFIGURA COMMODITY FUND (TCF)
• US$470 millions of bonds
sold from SPV to six banks
including DBS and OCBC
TCF as SPV
in Singapore
• Bonds are backed by a
portfolio of crude oil &
refined metal inventories
(Collateral)
• No coupon rate disclosed.
Bond Backing • Trafigura to sell
inventories across 12
jurisdictions in Europe,
Middle East & Asia-Pacific
to SPV before buying
back at later date
Trafigura
&TCF (SPV)
AceMBA
A Comprehensive reference for business students
6. SIGNIFICANCE – WIDER INVESTOR BASE
Monetization of Firm's
Inventories
• Commonly used tool,
Repo, involves only one
type of commodities
• Trafigura’s structure
involves portfolio of
commodities
• Trafigura’s structure
opens up product to
allow for participation
of more banks and more
investors
Long Term committed
funding
• No secure commitments
from various banks
• Reduced interest rates
• Looking to offer long
dated notes to capital
market
Scalable Program
• Can Increase or Shrink in
size according to
trading volume and
commodity prices
AceMBA
A Comprehensive reference for business students
