Support The Moscow Times!

Rosneft Getting Bank Commitments

Rosneft is receiving banks' initial commitments to a $32.5 billion loan that it is arranging to back its $55 billion acquisition of TNK-BP, bankers said.

The state-owned oil giant is arranging the massive loan to avoid paying banks' underwriting fees. The deal is the largest-ever loan issued to a Russian company and Europe's ninth-largest loan.

The initial commitments from the banks mean they have agreed in principle to the loan ahead of a final signing of the deal later. Lenders will still earn large fees from the loan but will not be able to book them until next year at the earliest after the loan agreement is signed.

Signing of the loan agreement is expected in the first quarter of 2013 in January or February after Rosneft's acquisition receives approval from shareholders and the Russian government, several bankers said.

The size of the jumbo loan and the time that it will take to refinance the bridge loan in the bond market means that the loan will make a big contribution to banks' bottom lines.

The loan is structured as a $24.5 billion bridge loan that will be refinanced with bonds, and an $8 billion five-year term loan.

Contributions from Russian banks and cash from the company are still being finalized but Russia's top banks are expected to commit significantly more than $1 billion each, a banker close to the deal said.

"Rosneft's loan is a tough ask with no underwriting but there's still plenty of revenue around it," the banker said.

Related articles:

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more