The bonds for large commodity oil and metals trading firms that have sizable Russian business have fallen significantly given questions on whether firms can meet their margin requirements in a volatility environment coupled with high prices. Trafigura 5-year bonds down 20%; Gunvor bonds 4-year down 30% as of the end of last week.
Bunge, ADM, Wilmar international, Olam International as public agricultural firms are all showing positive equity returns for year, but they have not been subject to the same sanction issues and have in many cases more diversified businesses outside of metals and oil.
There have been whispers that some firms may need bailouts or at least capital infusions. The events of the last month focus on the problems of leverage, financing shortfalls, and the simple issue that centralized exchange trading and clearing are not a solution to large price shocks.
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