China Merchants Bank contributes to $600 million syndicated bridge loan (PxF) to finance the export activities of CMOC Brazil (Linked to Record ID#92535, 92536, 92537, 92539, 92540)

📋 Staff Comments

1. The exact size of the contributions from China Construction Bank (Asia) Corporation Ltd., Bank of China, Industrial and Commercial Bank of China, China Merchants Bank, Shanghai Pudong Development Bank, and China CITIC Bank (International) are unknown. For the time being, AidData assumes that all 14 members of the lending syndicate contributed equally ($42,857,142) to the $600 million loan.
2. CMOC Brazil is the second largest producer of niobium in the world and the project is supported by CMOC's leading beneficiation technology and its own trading network.
3. Although the transaction is classified as a pre-export financing (PXF) arrangement, it also has a bridging loan element.
4. PXF is backed by ferroniobium products taken by IXM, the world’s third-largest base metals trading company. IXM primarily markets copper, lead, zinc, aluminum, nickel, cobalt and niobium. According to CMOC Brazil, the offtake agreement with IXM will last for up to seven years. It is expected that a large part of the levies will go to production companies in China, but also to other selected companies around the world. IXM is a 100% subsidiary of the CMOC group – an acquisition that was only secured in mid-2019. IXM was previously the metals trading business of commodities trader Louis Dreyfus. CMOC held an indirect 45% stake in the metals trading arm through the NCCL Natural Resources Investment Fund with an initial $466 million in a deal in mid-2018. At this time, Louis Dreyfus Metals becomes IXM. Shortly after, CMOC announced its intention to purchase the remainder of IXM. After a number of regulatory checks, CMOC completed the purchase of the remaining 55% shares from China Anxing Asset Management with a payment of $518 million in mid-2019.
5. One source (https://www.cmoc.com/html/2022/TheGlobalDynamic_0519/30.html) suggests that a bridge loan and a pre-export financing facility was provided to the borrowing institution. This issue warrants further investigation.

📚 Sources & References

• CMOC Brazil secures $600m niobium PXF for security of strategic metal supply
• 洛钼巴西铌预出口融资项目顺利完成
• Dias Carneiro advises CMOC Group on pre-export financing transaction
• White & Case advises CMOC Group on ground-breaking pre-export financing transaction
• CMOC Brazil Secures $600 Million PXF Niobium for Security of Strategic Metals Supply Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.