Deutsche Bank has provided a US$200m structured steel prepayment loan to China’s Tangshan Iron and Steel (Tangsteel) to facilitate pre-payment of US$270m of its steel exports to Duferco.
Headquartered in Tangshan, Tangsteel produces 18m tonnes of steel per year and offers a variety of steel products. The company, owned by Hebei Iron and Steel (HBIS), is China’s largest steel manufacturer and the second largest in the world. Duferco is the principal operating trade subsidiary of Duferco International Trading Holding, a global steel trading company, which has been doing business in China since 1992.
The 12-month syndicated cross-border loan was arranged and led by Deutsche Bank (China), Shanghai branch. DB Trustees (Hong Kong) acted as the security agent and Deutsche Bank, Hong Kong branch as the facility agent and account bank for the trade finance structure.
The pre-payment arrangement was originated by Duferco as part of its expanding commercial, technical and financial relationship with Tangsteel. Duferco is both the exclusive off-taker of steel products exported under this pre-payment arrangement, and a 10% risk guarantor.
Carl Wegner, Greater China head of global transaction banking at Deutsche Bank, said: “We continue to see a growing interest in this type of state-of-the-art structured finance solutions in the Greater China region, and we look forward to assisting more companies with their structured trade financing needs.”
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