Russian fertiliser producer UralChem has secured a debut US$220mn pre-export finance (PXF) loan.

The syndicated package is priced at Euribor plus 4.25% and has a tenor of five years, with a six-month grace period. UralChem, who borrowed the money through its Kirovo-Chepetsk Chemical Works (KCCW) subsidiary, was given an option to draw the facility in euro or dollars, and chose to do so in euro.

The loan is secured by commercial contracts for the export of fertiliser produced by Uralchem’s principal operating companies.

The mandated lead arrangers were ING, Raiffeisen Bank Russia (RBRU), Sberbank and VTB. HSBC and Rosbank joined as lead arrangers. ING acted as facility, security and mandated document agent, RBRU as transaction documentation agent, and Sberbank as passport bank.

This is one of the first Russian transactions to be conducted in line with the Loan Market Association (LMA)’s new standard PXF documentation.

Orrick acted as legal advisors to the lenders, while Baker & McKenzie advised KCCW.

John de Lange, ING’s managing director for structured metals and energy finance (SMEF), says banks responded well to a new name on the PXF market, in a year in which it wasn’t awash with deals. He also highlights the turnaround in KCCW’s fortunes – the company experienced a tough time in 2009 and 2010 due to the impact of the financial crisis, but has since recovered, with 70% of its production now exported to a “pretty stable group” of offtakers.

De Lange says the multi-faceted nature of the transaction makes it stand out, as does the combined contributions of Russian and international banks. He tells GTR: “It [the combination] is becoming more common, but it’s not on every deal. I think Russian banks are slowly but surely changing their approach.

“They used to finance their clients exclusively in a traditional banking manner – in other words, loans secured on company assets and sometimes shares. Now they’re becoming more open to PXF and security structures that were already more common to international banks.”

Natalia Shukolovich, director of SMEF at ING, tells GTR that the deal is notable in that the participating Russian banks were on a par with the international banks, in terms of tenor. “Quite often, Russian banks are more comfortable going longer tenors than international banks,” she adds. “They might push it to seven or 10 years and get a higher return. It wasn’t the case with this deal – they’re completely on par.”