BB Energy closes first U.S. Digital Revolving Borrowing Base Credit Facility through Komgo Blockchain Partnership

Rhea-AI Summary

On Nov. 8, 2021, BB Energy announced the successful closure of a $500 million senior secured revolving borrowing base credit facility. The facility was oversubscribed, with commitments from eight lenders, starting from an initial launch size of $450 million, and includes a $150 million accordion feature for future growth. This marks a key milestone as it is the first U.S. digital borrowing base facilitated through partnership with Komgo, enhancing transparency and reducing fraud risk through blockchain technology.

Positive

• Facility oversubscribed, indicating strong lender confidence.
• Includes a $150 million accordion feature for future growth.
• First U.S. digital borrowing base achieved, showcasing innovation.

Negative

• None.

HOUSTON, Nov. 8, 2021 /PRNewswire/ -- 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."

"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."

Press enquiries:
Melissa Kanter
ING Financial Services LLC
M +1 (917) 848-3006
Melissa.Kanter@ing.com

Overview of BB Energy Group Holding Ltd
BB Energy ("BBE or the Group") was established by the Bassatne Family who started a commodities business in Lebanon in 1937, trading grain and asphalt. In 1963 they entered the oil sector in Lebanon and were primarily involved in local marketing of oil products and importation of Bitumen. During 1968, they began trading oil in the Mediterranean, Red Sea and Arabian Gulf.

The Group is managed by experienced traders and professionals in the oil industry. BBE is a dynamic global and independent oil trading company with key trading hubs in London, Dubai, Singapore and Houston and approx. 300 employees in 16 trading offices worldwide and approx. 450 employees including our downstream businesses.

Expanding from its core markets in the Mediterranean, the Group has in the last few decades developed its trading presence in the Red Sea, Black Sea regions, South East Asia, and most recently the Americas. Today its trading activities span across the five continents. Over the last 5 years, BBE has opened offices in Istanbul, Moscow, Lagos, Accra, Casablanca and Harare to further develop its trading activities in those regions.

BB Energy's portfolio of global trading flows grew steadily over recent years achieving traded volumes of crude oil, petroleum products and gas of approx. 33 million metric tons in 2020. The Group supported the trading volume growth by entering into new trade financing arrangements with local and international banks.

About Komgo
Komgo is a Swiss-headquartered software development and technology services company offering the reference digital network and workflow solutions for the trade finance industry. Its global customer base is supported through offices in Singapore, Geneva, London, and Houston.

Komgo removes the need for manual and paper-based processes, mitigates against fraud risk, provides a benchmark data reference for the industry and delivers the best-in-class value to end-users through bespoke digital experiences.

About ING Capital LLC
ING Capital LLC is a financial services firm offering a full array of wholesale financial lending products and advisory services to its corporate and institutional clients. ING Capital LLC is an indirect U.S. subsidiary of ING Bank NV, part of ING Groep NV (NYSE: ING), a global financial institution with a strong European base. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank's more than 53,000 employees offer retail and wholesale banking services to customers in over 40 countries. Please note that neither ING Groep NV nor ING Bank NV have a banking license in the U.S. and are therefore not permitted to conduct banking activities in the U.S. 

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SOURCE ING Capital LLC

FAQ

What is BB Energy's recent financial achievement?

BB Energy has successfully closed a $500 million senior secured revolving borrowing base credit facility.

Who arranged the $500 million credit facility for BB Energy?

ING Capital LLC acted as Joint Lead Arranger and Bookrunner for the credit facility.

What unique feature does BB Energy's credit facility include?

The facility includes a $150 million accordion feature to support future growth.

When was the credit facility closed by BB Energy?

The credit facility was closed on November 8, 2021.

How does the partnership with Komgo benefit BB Energy?

The partnership with Komgo enhances transparency and reduces fraud risk in the lending process through blockchain technology.