Russia’s Rusal, the world’s second largest aluminium company, has announced that syndication of a new US$200mn credit facility arranged by ING, Societe Generale and WestLB was closed successfully. The two-year facility is available on a revolving basis.

Proceeds under the facility will be used to finance the working capital requirements of Rusal’s smelters for production of primary aluminium.

ING was co-ordinating bookrunner, with SG and WestLB as joint bookrunners. WestLB acted as documentation, facility and security agent. SG was hedge provider and hedging agent, with all three mandated lead arrangers acting as hedge risk participants.

In addition, the following banks joined the facility: Commerzbank as senior lead arranger; UFJ as lead arranger; and BCP participating as manager.

Vladislav Soloviev, Rusal’s chief financial officer, says that the new syndication replaces

maturing structured trade finance facilities, but on better terms. The interest margin over Libor on the new facility is more than 150 basis points lower than that on some of the maturing loans.

According to Soloviev, the reduced interest rate reflects changes in banks” perception of both Russia’s and Rusal’s credit risk.

Rusal is the second largest primary aluminium producer in the world, formed in March 2000 from the merger of a number of the largest smelters and other aluminium producers located in the CIS. The company accounts for 75% of Russia’s primary aluminium output and 10% of the global primary aluminium output. Rusal is a fully vertically integrated company with a complete production cycle from bauxite mining and the production of raw materials, to the production of primary metal, semi-products and aluminium-based end products.

Rusal is headquartered in Moscow.