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Thu 14 May 2020 10:59 AM

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First Abu Dhabi bank reports $73.3m exposure to Phoenix Commodities

Phoenix Commodities has gone into liquidation after amassing $400m in potential trading losses

First Abu Dhabi bank reports $73.3m exposure to Phoenix Commodities

In the filing, FAB said that its exposure included $7.7 million to Phoenix Commodities as part of a syndicated loan with other banks, as well as $55.3 million in bilateral and syndicated loans to entities related to Phoenix.

First Abu Dhabi Bank has reported $73.2 million of exposure to embattled Phoenix Commodities, according to a bourse filing on Wednesday.

In the filing, FAB said that its exposure included $7.7 million to Phoenix Commodities as part of a syndicated loan with other banks, as well as $55.3 million in bilateral and syndicated loans to entities related to Phoenix, including Phoenix Global DMCC and SMEG DMCC.

A further $10.2 million of exposure to SMEG DMCC is due to bilateral loans.

“The syndicated facilities are secured by a combination of security, which includes account pledges, assignments and corporate guarantees,” the filing said. “The bilateral facilities to the related companies are secured by corporate guarantees and some of them by cash margins.”

Both Emirates NBD and Mashreq Bank have also both declared exposure to the Dubai subsidiary of Phoenix Commodities. Emirates NBD said that while the bank has no ‘direct’ exposure to Phoenix, it has $23.66 million of exposure to one of the subsidiary.

Mashreq Bank, for its part, said that it had exposure of $11.7 million to Phoenix Global DMCC.

Phoenix, which was founded in 2001 as a rice trading business, eventually grew to a global commodities firm that dealt in grains, coal, metals and other commodities.

The company has gone into liquidation after amassing $400 million in potential trading losses as a result of currency hedges amid volatile markets in February and March as the Covid-19 pandemic struck, according to Reuters.

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