Arcadia makes loan debut to beef up Asian trading

Published: 18 Oct 2010 02:28:48 PST

SINGAPORE, Oct 18 - European trader Arcadia Energy Pte Ltd made its debut in Asian loan markets last week by raising at least $75 million out of a $180 million credit facility, and will likely use the funds to boost its Asian trading activities, trading and banking sources said.

Reuters Basis Point reported that the $180 million one-year syndicated financing for Arcadia have already received commitments from six banks in general syndication, who have committed a total of $75 million.

Around eight to 10 banks are still going through credit approval processes to join the deal, which is expected to close soon, banking sources said.

BNP Paribas, Credit Agricole CIB, ING Bank, Rabobank, Standard Chartered Bank and Societe Generale are the mandated lead arrangers and joint bookrunners.

The revolving credit facility, guaranteed by Farahead Holdings Ltd and Farahead Investments Inc, offers a margin of 210 basis points over the London Interbank Offered Rate (LIBOR).

"Arcadia is taking the loan to roll over existing positions and possibly increase trading lines, primarily in Asia, as the strongest growth is in this region," said a trading source with a European firm.

"It appears to be the norm -- Vitol, Glencore and Gunvor have all done it in the past year." Arcadia was formed in 1988 as a unit of Japan's Mitsui & Co, which then sold its entire stake to Cyprus-based Farahead Holdings in 2005, which owns two shipping companies transporting oil and liquefied natural gas, as well as an offshore drilling fleet.

Parent firm Farahead provides integrated logistical support to Arcadia's oil trading businesses.

Arcadia made its name trading crude, and currently trades across the barrel, mainly in Europe, West Africa and Asia.

The company trades more than 800,000 barrels of physical crude and more than 10 million barrels of oil futures and options contracts each day, its official website shows, similar to the output of OPEC member Qatar.

Arcadia is regarded as a medium-sized trading house, similar to companies such as Mercuria, Sempra and Hetco, but lags big players such as Vitol, Glencore and Trafigura.