$20M Equity Raise Secures a $150M Bunker Fuel Revolving Credit Facility
A European bunker-fuel trading house needed additional equity before a bank would close a $150 million revolving credit facility. A $20 million preferred-equity raise met the lender’s loss-absorption test and the facility closed in 14 weeks.
$20 Million Equity Raise Secures a $150 Million Revolving Credit Facility
A European bunker-fuel trading house asked Financely to strengthen its balance sheet so it could close a revolving credit facility with a top-tier global bank.
The bank was prepared to extend a $150 million revolving credit line, but only if the sponsor added equity. The lender wanted more loss-absorption capacity and a clearer share of risk on the sponsor’s side. Without that equity, the facility could not be completed.
$20 million equity raised as preferred shares.
$150 million revolving credit facility secured from the bank.
14 weeks from mandate to closing.
The Challenge
The trading house had long-standing counterparties and established bunker-fuel trade flows. Its equity base was still too thin for the bank’s internal leverage and risk thresholds.
Without fresh equity, the $150 million revolving credit facility could not close. That limited the client’s ability to scale cargo purchases, floating storage and working capital. Private equity had shown interest in the sector, but wanted a structured entry point and clearer governance before committing.
What Financely Did
Financely ran a rapid underwriting process and stress-tested cash flow against volatility in the bunker-fuel market. On that work, it structured an equity raise aimed at institutional investors and family offices with appetite for energy-trading exposure.
The file included a credit memo, an audited financial model and governance changes aligned with investor requirements. Distribution then ran through Financely’s forward-flow network.
Commitments of $20 million in new equity were secured as preferred shares with governance rights. The trading house kept operational control while meeting the bank’s balance-sheet requirements.
The Outcome
With the $20 million equity in place, the trading house closed the $150 million revolving credit facility. The line supports bunker-fuel cargo purchases, floating storage and working capital, increasing trading capacity.
The process took 14 weeks from mandate to closing.
The bank’s condition was loss absorption, not a larger senior ticket. Preferred equity gave the lender the balance-sheet support it required without handing operating control to the new investors.
Takeaways
- An equity raise can unlock a much larger credit facility when the bank’s constraint is leverage and risk-sharing.
- Governance rights and a preferred structure can bring in institutional capital without giving up operational control.
- A targeted investor process can close faster than an open fundraising.
- Bunker-fuel trading needs a balance sheet that can absorb price volatility before a bank will scale the line.
Need Equity to Unlock a Commodity Credit Facility?
Financely advises on equity raises and capital placement for trading houses seeking revolving credit, prepayment lines and structured commodity finance.
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