Lukoil syndication expected to close this week

Syndication for the unsecured, dual-tranche US$1bn loan facility being raised for the Russian oil company Lukoil is expected to close this week. The transaction is currently oversubscribed and the possibility exists that the borrower may elect to increase the amount.

The deal is being led by ABN Amro, Bank of Tokyo-Mitsubishi UFJ, BBVA, BNP Paribas, ING, Mizuho and WestLB and is split into three and five-year tranches paying Libor +85 basis points and Libor +95bp.

Participating banks are being invited to commit pro-rata on the two tranches and being offered tickets of US$75mn at lead arranger, paying 70bp on the 3-year and 90bp on the 5-year; US$50mn at arranger, paying 55bp and 75bp and US$25mn paying 35bp and 55bp.

Lukoil managed to secure a US$250mn facility in April 2007, arranged by ABN Amro and Calyon and paying 40bp, the lowest margin achieved to date on a Russian syndication.