ABN Amro files claims against Singapore’s troubled oil trader

Bloomberg

ABN Amro Bank NV has become the latest lender to make a claim against a Singapore oil trading giant that filed for protection from creditors amid a plunge in oil prices.
The Dutch bank filed applications for charges related to irrevocable letters of credit tied to goods and documents of Hin Leong Trading (Pte) Ltd., according to filings with Singapore’s Accounting and Corporate Regulatory Authority.
The Amsterdam-based lender is the second bank to file charges linked to Hin Leong, which owes almost $4 billion to more than 20 Singaporean and international banks, including HSBC Holdings Plc, DBS Group Holdings Ltd. and Standard Chartered Plc. London-based HSBC has the most exposure to the oil trader, with about $600 million, people familiar with the situation said.
Hin Leong, founded in 1963 by Chinese tycoon Lim Oon Kuin, filed the application for a debt moratorium from Singapore’s High Court on Friday, according to people with knowledge of the matter.
ABN Amro didn’t specify the amount owed to the bank in the documents dated April 17. The charges covered include Hin Leong’s bills of landing, air waybills, cargo and warehouse receipts, as well as the goods shipped related to the bank’s credit.
An irrevocable letter of credit can’t be cancelled or amended by the issuing bank without the agreement of the parties in the credit transaction. Letters of credit are a critical financial lifeline for commodity traders, used as way of financing short-term trade. A bank issues the so-called L/C on behalf of the buyer as a guarantee of payment to the seller. Once the goods have exchanged hands, the buyer repays the lender.
Societe Generale SA last week registered several charges covering goods and receivables financed by the bank and the Hin Leong bank account with the Paris-based bank.