Russian steel maker Evraz has successfully issued a Eurobond placement to support its acquisition of pipe company Ipsco's North American assets. Having opted to issue the bond, Evraz has dropped any potential plans to raise a US$2.1bn bridge financing to support the acquisition.
Calyon and ABN Amro were both mandated by Evraz to arrange and underwrite a US$2.1bn bridge facility, but with the understanding that Evraz would issue a bond within a predefined period of time.
Evraz's acquisition plans are being carried out in conjunction with the Russian steel pipe producer TMK. In March, Evraz announced it would pay US$2.3bn to buy Ipsco’s Canadian assets, and that it would also acquire the company’s pipe operations in the US before selling them on to TMK.
Evraz, in a similar vein to other Russian steel producers, has been in acquisition-mode over the last year, fuelled by rising demand for steel products around the globe. Not only has the company bought assets in North America, in February it also acquired a stake in steel company Delong Holdings, a firm listed in Singapore with Chinese operations.
At the end of last year Evraz raised a US$3.214bn structured multi-tranche credit facility raised to finance its acquisition of Oregon Steel Mills in the US. The deal was signed, funded and fully underwritten by the mandated lead arrangers at the end of 2007, with general syndication closing earlier this year.
This facility was seen as evidence of the company’s strength, given that it was not only its largest syndicated loan raised to date, but also launched just as the crunch on liquidity hit the banking market last November.
A US$1.3bn bridge facility for TMK in support of the Ipsco acquisition has also recently been closed and fully funded via eight mandated lead arrangers: ABN Amro, Calyon, BNP Paribas, ING, Bank of Tokyo-Mitsubishi UFJ, Barclays, Sumitomo and Natixis.
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