BB Energy, a leading global independent energy trading company, successfully closed a $500 million senior secured revolving borrowing base credit facility (the “Facility”).
Based on an initial launch size of $450 million, the Facility was oversubscribed with commitments received from a diverse group of 8 lenders. The Facility also has embedded a $150 million accordion feature available to support future growth.
ING Capital LLC acted as Joint Lead Arranger and Bookrunner in the syndication and will act as Administrative Agent for the Facility. Natixis acted as Joint Lead Arranger and Citibank, N.A. as Cash Management Bank.
BB Energy CFO, Jacques Erni commented: “Given the exceptional times that the global economy is undergoing, we are very proud to announce a landmark achievement in BB Energy’s history. This borrowing base is the foundation for BB Energy USA, to achieve our next level of growth. A huge appreciation to our financial institution partners and the new participants in this facility which underscores their strong level of confidence in our capabilities and augurs well with our strategy towards diversification and injection of fresh liquidity into our platforms.”
First U.S. digital borrowing base achieved with Komgo
The deal is the first U.S. digital borrowing base achieved by BB Energy through a partnership with Komgo, a Swiss-headquartered fintech owned by a number of major trade finance institutions and ING Capital LLC, a leading commodity finance lender.
Fraud continues to be at the forefront of commodity lenders’ key concerns when extending credit. Through blockchain technology, Komgo increases visibility by connecting to third-party providers, supplying real-time data and generating a comprehensive view of the company’s trading book and the collateral supporting their credit facility. Through Komgo’s Digital Agent, both the lender and the creditor can exchange secure and credible information, help straight-through processing, and reduce operational burden.
“The collaboration with Komgo demonstrates our common objective towards absolute transparency and enhanced integrity through digitalization,” continued Erni. “By using Komgo’s system, we are able to provide trade and collateral data on demand – a process that historically would be completed manually.”
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“As lenders increasingly prioritize collateralized security, we see these kinds of facilities becoming more popular. As a consequence, financial agents will need support to more efficiently manage the workflows and exchange of information required in an increasingly complex environment,” said Souleïma Baddi, CEO, Komgo. “There is so much data involved that agents need someone to help them extract useful intelligence; and make faster, better-informed decisions. Komgo is at the forefront of this transformation, providing expertise and smart monitoring.”
ING was one of 15 financial institutions, commodity houses and trading companies to launch Komgo in 2018.
“As an early investor in Komgo, it is a great achievement to lead this first-of-its-kind transaction for BB Energy; a company at the cutting-edge of commodities innovation,” said Caue Todeschini, Head of Trade & Commodity Finance Houston for ING. “Komgo’s use of third-party data decreases the chance of fraud in the commodities sector – which largely remains reliant upon borrower self-declaration of collateral positions.”
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