Bloomberg25 Mar 2022 15:31
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Spanish Bank Sabadell Pulls Out of Trafigura Credit Facility
Bank was a minor participant in syndicated financing deals
Commodity traders are facing liquidity squeeze as prices soar
ByJack Farchy+Follow
23 March 2022, 21:25 GMT
Banco de Sabadell SA is pulling out of a credit facility for Trafigura Group, highlighting the growing nervousness about the commodity trading sector as soaring prices create a liquidity squeeze.
While the Spanish bank is just one out of more than 100 institutions that fund Trafigura and is not a major lender to the trading house, its move comes at an awkward time. Trafigura -- in common with the rest of its industry -- has been rushing in recent weeks to secure additional financing, as high prices increase the cost of shipping commodities around the world and lead to large margin calls for traders.