CLN on Physical Commodity Trading

Note: GenTwo is a platform provider for structured products. This information is intended for professional investors only.

What is this product? 

A credit-linked note providing institutional investors with exposure to physical commodity trading — spanning metals, carbon rights, energy and bulk commodities — through a private loan to Dorlas Investment & Finance SA, which capitalises its subsidiary Blue Stallion Ventures Sarl, an active participant in global physical commodity markets alongside established trading houses.

How does it work? 

The note is linked to a private loan agreement with Dorlas Investment & Finance SA, with the loan proceeds used to finance physical commodity trading operations through the borrower’s subsidiary. Note holders receive an annual coupon paid on each coupon payment date, provided no credit event or termination event has occurred. The note matures in January 2031, at which point it settles in cash — returning the full denomination if no credit event has occurred, or a reduced residual amount if the borrower has been unable to meet its payment obligations under the loan. The issuer also retains the right to redeem the notes early, partially or in full, on designated early payment dates.

What is the underlying asset? 

The underlying assets are physical commodities — metals, carbon rights, energy and bulk commodities — traded by Blue Stallion Ventures Sarl, a wholly-owned subsidiary of the borrower Dorlas Investment & Finance SA. Blue Stallion Ventures partners on many of its trades with established global trading houses such as Cargill, Bunge and Glencore. The physical commodities themselves, along with the profits generated from trading them and any related investments such as mines and storage facilities, form the final underlying assets of the note.

Switzerland is one of the world’s principal hubs for physical commodity trading, with Swiss-based firms handling an estimated 35% of global oil trade, 60% of metals and 50% of cereals. The canton of Zug in particular is home to major metals and energy trading houses, including Glencore, one of Blue Stallion Ventures’ trading partners. Physical commodity trading — the buying, selling and transport of tangible goods as distinct from financial derivatives — remains a capital-intensive business, and private lending structures such as this one provide the working capital that trading firms need to finance inventories and settle transactions.

Who is behind it? 

Dorlas Investment & Finance SA, an investment holding and financing company based in Geneva, is the borrower under the private loan agreement and channels the proceeds to its wholly-owned subsidiary Blue Stallion Ventures Sarl for physical commodity trading operations. The note is issued by CG Securities SPC Ltd, a Cayman Islands segregated portfolio company acting through a dedicated segregated portfolio created specifically for this product, with InCore Bank AG (Switzerland) serving as paying agent and GenTwo AG providing the structured product platform infrastructure.

What kind of instrument is this? 

A Credit-Linked Note (CLN) is a debt instrument where returns are tied to the credit performance of a reference entity or portfolio. Investors receive payments based on whether specific credit events occur, without owning the underlying loans or bonds directly.