Three more institutions have won mandated lead arranger (MLA) roles for Ivanhoe Mines’ Oyu Tolgoi project in Mongolia.
BNP Paribas, Standard Chartered and Canada’s export credit agency Export Development Canada (EDC) have all been appointed as MLAs for the US$2bn project finance debt package for the copper and gold mining project, which is expected to close in Q1, 2011.
EDC is considering providing up to US$500mn in direct financing, subject to necessary approvals such as ensuring that the project meets the agency’s environmental requirements.
The organisations join the European Bank for Reconstruction and Development and the IFC who announced interest in the deal in May.
Robert Friedland, executive chairman of Ivanhoe Mines, comments: “The completion of the assembly of the core lender group is a key step in the process of securing the Oyu Tolgoi financing package. The five financial institutions have indicated that they are prepared to consider providing limited recourse loans that would total more than US$2bn, demonstrating the high level of interest in international financial circles in participating in the project and awareness of its game-changing significance to copper and gold markets.”
The MLAs beat off competition from eight other institutions for the chance to be involved in the project.
Friedland explains the reasons for choosing the MLAs: “As leading global institutions, BNP Paribas and Standard Chartered have a very strong presence in Asia and, consistent with the commitments of the other core lenders, have indicated that they are considering retaining a significant exposure to the Oyu Tolgoi project debt through a mix of facilities.”
Ivanhoe Mines also expects significant support for the project from commercial lenders under both B loan structures and the guarantee schemes of other export credit agencies.
The company has stated that it is discussing additional financing options for the balance of its capital requirements.
Last Updated July 19, 2010
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