Republic of Singapore / Loan Insurance for Revolving Credit Facility to JERA Trading International Pte. Ltd.
Nippon Export and Investment Insurance
Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Atsuo Kuroda) has decided to provide a loan insurance for a loan arranged by Sumitomo Mitsui Banking Corporation to JERA Trading International Pte. Ltd. (JERATI), a Singaporean subsidiary of JERA Co., Inc. (JERA).
NEXI’s insurance will cover the Revolving Credit Facility extended to JERATI, which is to be used for the working capital of JERA Global Markets Pte. Ltd. (JERAGM) in which JERATI invests.
JERAGM has been contributing to procuring liquefied natural gas (LNG) for its parent company JERA through its trading business of natural resources. With the national target to achieve carbon neutrality by 2050, it has become difficult for Japanese LNG buyers, who had been on term contracts, to sign new LNG contracts or to extend their existing contracts as they previously did. While resource prices continue to be highly volatile, securing a steady supply of LNG has become critical, and the loan which will support the financing of JERAGM's trading business, will help in ensuring a stable supply of natural resources and energy in Japan, and in encouraging a healthy development of the international LNG market by improving its liquidity.
As opposed to long-term loan, Revolving Credit Facility is a flexible financing tool that allows borrowing and reborrowing of necessary funds as needed, corresponding to the swift sales transaction in trading business. NEXI launched a new scheme for Revolving Credit Facility and this is the first project for the scheme to be applied.
It is also the first project which materializes the “support for LNG trading by Japanese affiliated companies abroad through trade and investment insurance” which NEXI endorsed in the 11th LNG Producer-Consumer Conference (LNG PCC) held on September 29, 2022. The project was also referred to in the LNG Strategy for the World, and in the speech by Yasutoshi Nishimura, Minister of Economy, Trade and Industry, both announced at the LNG PCC 2023 held on July 18, 2023, as part of the Japanese government’s efforts in supporting LNG based on the recognition for the need to increase liquidity in the LNG market in order to reinforce LNG security.
As a policy-based financial institution of Japan, NEXI will continue to actively facilitate projects that are conducive to securing a steady supply of resources and energy to Japan and the Japanese companies.
| Insured | Sumitomo Mitsui Banking Corporation |
| Covered risks | Political risk: 100%, Credit risk: 90% |
Contact: Natural Resources Group, Structured and Trade Finance Insurance Department
Tel: +81-(0)3-3512-7670