Mandated lead arrangers and bookrunners ABN Amro, Barclays Capital, BNP Paribas, Calyon, Credit Suisse, ING Bank, Merrill Lynch, Natixis and Unicredit (HVB) have signed a US$4.5bn bridge facility to finance aluminium producer UC Rusal's acquisition of a stake in Norilsk Nickel.
At the end of last year, UC Rusal announced it was to purchase a 25% plus one share interest in Norilsk Nickel from Onexim Group, a private investment fund and largest shareholder in Norilsk Nickel.
Under the terms of the agreement between UC Rusal and Onexim, Onexim will become an 11% shareholder of UC Rusal, with the difference to be paid by Rusal in cash.
Mandates to arrange and underwrite the facility were issued to initial mandated lead arrangers ABN Amro, BNP Paribas, Credit Suisse and Merrill Lynch in November 2007. Barclays Capital, Calyon, ING, Natixis and HVB then joined as additional MLAs. Goldman Sachs and Morgan Stanley also joined as senior lead arrangers.
The initial margin being paid on the deal is 100 basis points over Libor per year, rising to 125bp per year after three months, before increasing to 150bp in six months, finally increasing to 200bp per year thereafter.
General syndication is in progress, and it is expected that five to ten banks will be brought into the facility in the next three to four weeks.
Those close to the deal report that it is being well-received by the market, despite current uncertainty in the debt markets.
UC Rusal was last in the market in mid-2007 with a US$2.335bn seven-year pre-export facility. This financing was launched just before the credit crunch hit the debt markets, and carried a typically low margin of 80 basis points over Libor.
Given the problems afflicting the market at the time, the syndication period was relatively drawn out. However, the deal was still ultimately oversubscribed and signed at US$2.335bn, an increase from the original request of US$2bn.
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