Russia’s Norilsk Nickel has closed general syndication of the US$3.5bn acquisition facility, following an oversubscription of more than 20%. The deal will fund the Russian company’s take-over of Lionore, a Canadian mining firm.
Mandated lead arrangers and bookrunners BNP Paribas and Société Générale arranged and fully underwrote the facility. SG is the facility agent for the syndicated facilities, while BNPP is the facility agent on the unsyndicated unsecured loan. SG also acted as rating advisor to Norilsk Nickel under the offer.
The funds were divided into two facilities, one US$2bn five-year pre-export loan and a US$1.5bn three-year syndicated dual-tranche unsecured term loan and revolving credit. There was also a further US$2.5bn one-year unsecured tranche that was not syndicated.
The MLAs signed the facilities on June 22, and general syndication was opened on July 9. The margins being paid are linked to Norilsk’s ratings, which based on the company’s current ratings means that the pre-export tranche pays a margin of 52.5 basis points per year during the first three years, rising to 62.5bp per year for the final years. The unsecured US$1.5bn pays a margin of 60bp per year.
Senior syndication on the two tranches closed in late June, with general syndication commencing on July 9.
Ahead of general syndication, six banks joined the facility as MLAs and sub underwriters: Bayerische Hypo-und Vereinsbank, Bank of Tokyo-Mitsubishi UFJ (Europe), Calyon, ING Bank, Natixis, and SMBC.
An additional 18 banks joined the facility, and such was the popularity of the deal, it was oversubscribed by 22%. However, the borrower opted not to increase.
Joining the facility as senior lead arrangers are: Bayerische LandesBank, Dresdner Bank, Cooperatieve Centrale Raiffeisen-Boerenleenbank, and Royal Bank of Scotland. Lead arrangers are BBVA Ireland, Mizuho Corporate Bank Nederland, and Scotiabank.
A total of four banks join as arrangers: DZ Bank, Barclays Bank, HSBC Bank, and Sanpaolo IMI Bank.
Managers are Woori Bank, Bank of Montreal, Landesbank Baden-Wurttemberg, Royal Bank of Canada Europe, WestLB, NM Rothschild and Sons, and Skandinaviska Enskilda Banden.
Earlier this year, Norilsk Nickel managed to out bid Swiss mining company Xstrata to acquire the Canadian mining group after offering Lionore C$27.50 (US$26) a share. The financing package is the largest international acquisition made by a Russian company to date. Following Norilsk’s announcement of its offer to purchase all outstanding common shares of Lionore, Standard & Poor’s , Fitch Ratings and Moody’s Investors Service confirmed the company’s investment grade credit ratings.
The Canadian mining sector is proving increasing attractive for potential acquisitions. Last year Brazil’s CVRD acquired Inco and Falconbridge took over Xstrata.