Investec has structured a US$10mn uncommitted supply chain finance (SCF) facility for Singapore-headquartered agricultural commodity trader Valency International, marking the first time the bank’s international trade finance team has acted as sole lender on a supply chain deal.

The financing will help Valency better manage its balance sheet and optimise working capital by enabling “early settlement with suppliers and extended terms for customers”, Investec says.

Agricultural commodities traders typically face long cash conversion cycles that are affected by seasonality and storage, as well as shipping and payment delays, and SCF helps to bridge the liquidity gaps these cause.

Praveen Kumar Jain, Valency’s co-founder and chair, says the facility “will allow us to settle accounts with suppliers early in the trade cycle and extend terms to our customers to absorb shipping times”.

Investec tells that the programme is usable for both buy-side and sell-side SCF, and is open to a subset of Valency’s clients that can change over time.

The programme is not region-specific, but most suppliers and buyers currently eligible for the programme are based in Asia and the Middle East.

The deal is the first SCF facility to be fully financed by the South Africa-headquartered bank’s international trade finance team, launched in 2021, which has previously only acted in a support role on such transactions, Investec says.

“Our ability to structure a supply chain finance deal like this as the sole funder demonstrates Investec’s willingness and ability to assist global companies with innovative and flexible financing structures to support operations and help them scale the business,” says Jared Pillay from the bank’s international trade finance division, who led on the transaction.