Ukrainian steel producer Metinvest has launched a structured pre-export finance (PXF) facility into the syndication market.

The deal was launched at US$300mn, but is likely to hit US$500mn, if not higher, says a market source.

Deutsche Bank will act as coordinating mandated lead arranger and bookrunner on the facility, which will be used to fund the working capital and capital expenditure of the Metinvest group.

The facility will pay a margin of Libor plus 4.75%, and will carry a grace period of one year, to be followed by 24 monthly instalments of equal value. This has risen from Metinvest’s last syndication launched in November last year which was priced at 3% per year over Libor.

This five-year US$1bn PXF was lead by Deutsche Bank, ING Commercial Banking, Natixis, UniCredit and West LB as mandated lead arrangers and bookrunners. BNP Paribas joined the transaction as a mandated lead arranger.

Sergiy Novikov, chief financial officer of Metinvest, says: “We have been delighted by the positive response of the financial community to our fund raising efforts over the past year, and are confident that they will repose their confidence in us by responding favourably to our latest pre-export finance facility.”

“With our ambitious modernisation programme well on track to deliver progress, the proceeds of this facility will be used to fund the working capital of the group, and contribute towards our capital expenditure programme for 2012.”