Mercuria Raises More Than $2 Billion to Buy JPMorgan Commodities

Oct. 9 (Bloomberg) — Mercuria Energy Group Ltd. said it raised a loan of more than $2 billion to buy JPMorgan Chase & Co.’s physical commodities business and expand in North America.

The borrowing base facility is made up of one-year and three-year portions, Mercuria’s chief treasurer for the region, Chris Morran, said in e-mailed comments. The deal was oversubscribed after “very strong interest” from the North American banking market, Morran said.

Geneva-based Mercuria is among independent trading houses filling the void as banks from JPMorgan and Barclays Plc to Deutsche Bank AG and Morgan Stanley withdraw from or scale back physical commodity operations amid increased regulatory scrutiny.

“With such enthusiasm from so many banks in this borrowing facility, we have sufficient capacity to build upon the acquisition of the JPMorgan Chase physical commodities unit and further expand our portfolio on the North American continent in power, gas and crude oil,” Morran said.

Mercuria, which is registered in Cyprus and has its main trading operations in Geneva, agreed to buy the unit for $3.5 billion in March. The company revised the deal last week to cover only $800 million of assets, people familiar with the change said on Oct. 2.

The acquisition from the New York-based bank gives Mercuria gas and power trading operations on both sides of the Atlantic. It will also get more than a dozen physical assets in North America including about 6 million barrels of storage leases in the Canadian oil sands.

Founded in 2004 by former Goldman Sachs Group Inc. traders Marco Dunand and Daniel Jaeggi, Mercuria has grown to become the world’s fourth-largest independent oil trader with sales of $112 billion in 2013.

–With assistance from Andy Hoffman in Geneva.

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