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Deutsche Bank AG has sold a portion of a $600 million loan intended to finance the acquisition of an Australian coal mine to private credit funds, according to sources familiar with the transaction. In recent weeks, the German lender offloaded about $120 million, or half of its exposure, to Australian and Asian credit funds including Income Asset Management Group Ltd., Regal Funds Management, and Keyview Financial Group, said the sources, who requested anonymity due to the private nature of the matter.

The bank plans to retain the remaining portion of the loan, which supports a Golden Energy and Resources-led consortium’s acquisition of the Illawarra coking coal mine in Australia. Initially, Deutsche Bank held about 40% of the loan, the sources revealed.

This transaction highlights the increasing role of private credit funds as an alternative funding source for coal and other fossil fuel-related projects, as traditional banks are increasingly avoiding these sectors due to environmental, social, and governance (ESG) concerns.

Deutsche Bank, Income Asset, and Regal declined to comment when contacted by Bloomberg. Keyview did not respond to emails requesting comment.

The Golden Energy-led consortium signed the $600 million loan in July with Deutsche Bank and private credit funds including Davidson Kempner Capital Management LP, Farallon Capital Management LLC, King Street Capital Management LP, Washington H. Soul Pattinson & Co., and Broad Peak Investment Advisers Pte. The consortium also raised a separate $150 million working capital loan and a A$150 million ($100 million) guarantee facility.

GEAR M Illawarra Met Coal, the entity acquiring the mine from Australia-based South32 Ltd. for $1.65 billion, engaged Grant Samuel as an adviser in its fund-raising efforts, Bloomberg reported in March. Singapore-based Golden Energy, controlled by Indonesia’s Widjaja family, owns a 70% stake in GEAR M Illawarra Met Coal, with M Resources Pty. holding the rest.

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