JSW Steel Saturday said it has inked a 5-year advance payment and supply agreement with Duferco International Trading Holding for $700 million.

For Duferco International Trading Holding (DITH) the transaction assures a captive supply of various steel products from JSW over the term of the advance payment and supply agreement.

"The transaction further cements the long-term relationship between the two groups which have partnered together in various commercial ventures during the past 15 years. The deal is the largest trade finance facility to have been arranged in the Indian steel sector," the statement said.

In the past, JSW and DITH have entered into similar trade financing arrangements on smaller scale but for a longer term, all of which were successfully executed and completed.

The deal has been arranged and financed by the global banks - BNP Paribas, Citibank, Credit Suisse, ING, Mashreqbank, Natixis, Societe Generale, Standard Chartered Bank acting as Mandated Lead Arrangers and Bookrunners, the statement said.

"The structured long-term trade finance transaction is an important deal in diversifying the sources of financing for JSW Steel. This not only enables JSW to raise funds at competitive rates but also assures incremental volume of sales in export markets leveraging the wide spread global network of the DITH Group Companies," Seshagiri Rao, JMD and Group CFO said.

JSW Steel is the flagship company of the diversified $13 billion JSW Group.