Donetsksteel on lookout for new PXF
Ukraine’s Donetsksteel Iron and Steel works has mandated Deutsche Bank to coordinate a new five-year pre-export financing facility.
It is likely that the Ukrainian company will be looking to raise between US$750mn to US$1bn in financing.
Deutsche is currently talking with other banks to form a lending group.
The new mandate follows the recent signing of a US$1bn pre-export finance loan for the Ukrainian steel producer Metinvest.
Metinvest was able to secure pricing of 3% on its five-year transaction, however it is unlikely that Donetsksteel will follow suit.
One banker close to the deal said it was too early to discuss pricing.
Yet given the rising cost of funds seen in the European banking sector, it is probable that Donetsksteel will have to agree to pricing higher than 3%.
Metinvest’s pricing was secured by August this year when there was more liquidity in the bank market.
Borrowers looking to raise PXF in the second half of 2011 will inevitably have to accept higher borrowing costs.
Donetsksteel previously raised a US$274.4mn PXF in July this year, with BNP Paribas acting as sole bookrunner and mandated lead arranger on the transaction.
Reader Comments