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Metalloinvest Saves Money on Credit
The Metalloinvest mining and metals holding has attracted a $1.3-billion syndicated loan from 13 foreign banks led by Deutsche Bank. The holding had planned to eliminate its debts through a Eurobond issue, but it changed course after the interest rate on the bonds was found to be unsatisfactory. Under the agreement signed with the banks on July 16, the credit line can be expanded to $2 billion. A Metalloinvest spokesman said that the money would be used to refinance the holding’s $1-billion credit portfolio. The remaining funds will be used for the holding’s current goals other than mergers and acquisitions.
Deutsche Bank and Merrill Lynch, underwriters of the planned Metalloinvest Eurobond issue, suggested an interest rate of 9.5 percent annually and those plans were cancelled. It can be noted that Evraz is paying about 9 percent on $1.3 billion in five-year bonds, and Severstal is paying 8.5 percent on six-year bonds. Those companies have international ratings and accounting using international standards, however. Evraz is said to have planned to take out a syndicated loan initially, but instead placed its bonds last autumn, at the same time as Gazprom, VimpelCom and Rosselkhozbank did so. The interest of Western investors in Russian bonds has decreased since then.
According to Metalloinvest, the syndicated loan has a term of five years and interest rate of LIBOR + 2% (5.15% per annum). The commission paid to the investment banks may be up to 2 percent.
www.kommersant.com
All the Article in Russian as of July 18, 2008
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Photo: Денис Куриленко
