DUBAI, 16 August 2007 — Dubai Gold Receipt (DGR), an electronic warehouse receipt system operated by the Dubai Multi Commodities Center (DMCC), has facilitated Fortis to extend $17.8 million in financing to INTL Commodities, a DMCC member company and part of a group that has offices around the world, including Dubai, New York, London, Florida and Singapore.
The financing, which forms part of the recent Fortis-led $140 million syndicated loan to INTL Commodities Inc, was structured out of Fortis’ New York office and will be used for the expansion of INTL’s global commodities business. This is the first time that international organizations have used the Dubai-based DGR model to facilitate collateralized financing in Dubai.
This ongoing financing agreement for INTL Commodities has been achieved in phases, and includes 10 transactions spanning the last three months. The DGRs were issued against a total of 799 kgs of gold and 1,500 kgs of silver, providing INTL Commodities with access to $17.8 million in financing. Brink’s Global Services, the international security services company, is serving as the vault operator for this transaction.
The Dubai Gold Receipt, an innovative tool for accessing gold and silver financing, is an electronic vault receipt system that provides members with real-time access to various forms of gold stored in DMCC-approved vaults.
“Commodity warehouse receipts are increasingly being recognized as an innovative trade financing tool, and the UAE is currently just one of 26 countries worldwide that offers this innovative collateral-based financing model. This landmark international transaction, in particular, is evidence of the growing confidence the international banking sector has placed in DMCC and the DGR model, and we are confident that this will be the first of many such transactions,” Ahmed ibn Sulayem, executive chairman, DMCC, said.
Silvan Doorenspleet, general manager, Fortis Bank Middle East branch, said: “Fortis has a rich history of financing physical commodities that can be traced back to 1720. Today we finance a wide range of physical commodities from around the globe. In each jurisdiction, we tailor solutions to location specific requirements. Fortis was established in Dubai less than a year ago and the DMCC initiative was one of the key considerations that attracted us to Dubai. We are proud to be the first international bank to have used the DGR as security to finance local gold together with one of our clients, INTL Commodities Inc. The transaction has been driven out of our New York office and due to our local presence we have been able to gear our facilities to the DGR system and establish a solid security over the physical metal.”