ING closes third NEXI-backed Argentinean agro-industrial deal
Argentine agro-industrial exporter Vicentin S.A.I.C. is growing its exports to Japan — having signed a Memorandum of Understanding with Mitsui & Co., one of Japan’s largest importers for the export of grains and oilseeds to the Asian nation. When Vicentin was looking for a long-term working capital loan to support the agreement, it turned to ING.
In a deal backed by the Nippon Export and Investment Insurance (NEXI), Japan’s official export credit agency, ING structured a USD115 million, five-year syndicated loan for Vicentin — marking ING’s third NEXI-backed pre-export financing for Argentine agribusinesses in the past two years.
ING’s global footprint proved critical to structuring the deal. The syndication team in New York, ING Capital, built on their longstanding relationships with Japanese banks to act as a facilitator for Vicentin. The Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation were named mandated lead arrangers for their participation in this transaction.
Roberto Gazze, CFO at Vicentin, also highlights ING’s ability to connect Latin American exporters with Japanese importers: “Partnering with ING provides us the opportunity to strengthen our commercial relationships with Japanese importers and ensures we can scale our operations to meet Japan’s food import mandate over the next five years.”
Vicentin has agreed to export at least 40,000 tons of grains and oilseeds to Japan annually for the life of the contract, which can be increased in the event of a natural disaster in Japan.
The deal is key to helping Vicentin grow its business in Japan — and build its commercial relationship with Mitsui and other potential offtakers. “Working through both ING’s local Argentina office, with whom we maintain a long-lasting relationship and who counts with a deep knowledge of the Argentine agri-sector, and its Tokyo branch, that contributed with its thorough understanding of NEXI’s requirements and processes, streamlined the entire process and provided a high level of comfortability,” notes Gazze at Vicentin.
Family-owned Vicentin is Argentina’s largest soybean crusher in terms of installed capacity and one of the largest agribusiness exporters in the country. Founded in 1929, Vicentin has grown its operations beyond agricultural products to include biofuels.
The pre-export financing facility arranged by ING is a five-year loan with an 18-month grace period, and it is structured as an assignment of export contracts, as well as a pledge over the Collection account, through which Vicentin’s export flows will be channeled.
Sowing a strong trade relationship between Japan and Argentina
Argentina is the largest exporter of soybean meal and oil globally, and it holds a major share in global corn and wheat exports — thanks in large part to the country’s natural advantages, including flat and fertile lands and excellent weather conditions. Japan offers a prime opportunity for Argentina’s agribusiness exporters, and more and more Argentinean companies are looking to build relationships in this market.
A key concern for Japan right now is food scarcity. The country imports about 60% of its food on a caloric basis, and the government’s plan for food self-sufficiency, “Strategy for Exporting Infrastructure Systems,” aims for 45% self-sufficiency by 2025. It refers to South American grains and oilseeds, specifically, in the plan. NEXI’s core objectives are to guarantee the country’s food security and to promote Japan’s interests in international transactions. ING’s strong relationship with the Japanese export credit agency, the bank’s longstanding presence in Argentina and strong history in the commodities space — plus, its role in two previous NEXI-backed transactions for Argentinean grain and oilseed exporters— were key to the success of this latest transaction.
ING provided Compañía Argentina de Granos (CAGSA), a major Argentine marketer and exporter of grains, soybeans and corn, with a USD100 million, five-year working capital loan in 2015 to support the export of grains, oilseeds and by-products to Japanese offtake partner Marubeni Corp. In 2016, the bank closed a two-tranche USD100m working capital loan for Asociación de Cooperativas Argentinas (ACA) to support an offtake agreement with Zen-Noh, Japan’s National Federation of Agricultural Cooperative Associations, syndicating 50% to The Bank of Tokyo-Mitsubishi UFJ. NEXI provided insurance cover on both of those deals.