The trading division of China’s biggest food company signed

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  • 16 Jul 2019 12:00 AM
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Chinese Food Giant Raises $2.1 Billion in Country’s First Sustainability Loan

The trading division of China’s biggest food company signed a $2.1 billion loan that links all of its main financing lines to environmental targets. Cofco International Ltd.’s deal marks the first time a mainland Chinese company has embraced this new kind of financing agreement, known as a sustainability-linked loan. The deal offers lower interest rates in exchange for meeting targets, such as tracing the origin of its soybeans to ensure they don’t contribute to deforestation in Brazil. Cofco’s deal ranks among the world’s biggest sustainability linked loans and the largest in the commodity trading industry. It will replace existing revolving credit and term-loan facilities, making it the first time a commodities trader tied its core source of trade finance capital to green targets. “The future demand of agri-commodities can only be met by sustainable sourcing,” said Jing Wu, chief financial officer at Cofco International. “The market is giving us an opportunity to reflect our beliefs and how we do business with a creative financing structure.”

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