Russian metals company Evraz has scaled back a twice-oversubscribed US$950mn pre-export financing facility with a group of 14 international banks.
Deutsche Bank, ING and RBS coordinated the facility, which has been priced at 2.8% over Libor and is due to mature in 2015.
The loan is secured with the assignment of sales proceeds under certain export contracts.
A spokesperson for Evraz wouldn’t reveal to GTR the identity of the other 11 banks involved.
Law firm Clifford Chance acted as the banks’ legal counsel, while Evraz used Gibson Dunn as legal advisor and Rothschild as financial advisor.
The proceeds of the facility will be used to fully prepay the outstanding amount of the group’s existing syndicated dual-tranche loan that was signed for US$3.21bn in 2007.
Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, BNP Paribas, Calyon (now Crédit Agricole), Commerzbank, SMBC and UBS joined Deutsche and ING in the 2007 syndicate.
The new facility was originally set at US$850mn, but bank interest took the amount proposed to near US$1.7bn, which the metals firm decided not to take up after Evraz successfully completed a five-year R15bn (US$479mn) bond issue in early November.
The bond paid a coupon of 9.95% a year and saw Barclays Capital, Gazprombank and Troika Dialog act as joint arrangers and bookrunners.
“At the time the company approached the market with this deal, the rouble bond issue hadn’t been closed, so the company wanted to keep some flexibility in how they much they accepted in their facility,” Gokhan Tezcan, director, structured trade and commodity finance at RBS tells GTR.
As a result of these refinancing activities, Evraz claims to have lengthened the average maturity of its indebtedness and has no remaining significant debt repayments in 2011 or 2012.
“The company wanted to keep some flexibility in how they much they accepted in their facility.”
The signing comes amidst a flurry of Russian PXF deals, which appear to be marking the return of appetite in the Russian market following the global financial crisis.
“If you look at the Evraz deal as well as some other deals we have been working on, you can see that the appetite has returned, especially for some international banks which are quite active in the market,” Tezcan continues.
“In general, the outlook seems positive and it seems likely to continue into next year as well.”