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A&O advises on market-first TONA-linked Samurai loan

A&O has advised Mizuho Bank, Ltd., MUFG Bank, Ltd., and SMBC Bank International plc as Joint Active Bookrunners & Mandated Lead Arrangers and a syndicate of 11 additional Asian investors in connection with an English law governed JPY27 billion TONA-linked term loan credit agreement for Gunvor Group, one of the largest independent commodities trading companies in the world.

This transaction was notable because it is the first ever syndicated Samurai loan* that is linked to TONA, the risk-free rate which is a successor to JPY LIBOR.

Commenting on the transaction, A&O partner David Campbell said: “We are proud to be involved in another world first RFR deal, and delighted to work with leading Japanese banks on this successful transaction. The main challenge was that there was no precedent documentation for TONA in a Samurai context, but A&O’s firm-wide experience of LIBOR transition enabled our team to develop the required drafting, drawing on precedents used for other risk-free rates and working closely with SMBC, MUFG and Mizuho to adapt those precedents to specific requirements for Japanese Yen and the relevant investor base.”

David continued: “These deals require excellent coordination across global teams, and it’s impressive to see the banks work so closely across their London and Tokyo teams, as did A&O. We are also glad to maintain and develop our relationship with Gunvor and congratulate them on completing this latest round of fundraising.”

The A&O team was led by London Banking partner David Campbell, working with senior associate Adeola Adesola and trainee Aisha Gbadamosi. Partner Scott Neilson and senior associate Mieke Jiran Liu advised from Tokyo. The transaction was also coordinated with a separate revolving credit facility for Gunvor, on which banking partner Niels de Ru and Leon Zebeda advised from Amsterdam.

*A Samurai loan is a cross border syndicated debt product typically denominated in Japanese Yen for borrowers domiciled outside Japan, and is marketed primarily to a Japanese investor base.