Rosneft in new export back loan to refinance debt
by admin on Jul.18, 2008, under Export Import, Industry
By Dmitry Zhdannikov
MOSCOW – (Reuters via Guardian) – Russia’s most indebted oil firm Rosneft is on course to repay and refinance $7 billion of debts ahead of an August-September deadline after putting cash aside and raising a $2.85 billion export-backed loan.
Industry sources close to the deal said on Thursday the loan had been raised with the help of Deutsche Bank with oil exports used as collateral – the favourite type of financing by Russia’s largest oil firm.
Rosneft, which has no public debt despite its repeated promises to tap the Eurobond market, declined to comment. Rosneft’s heavy debt is the result of aggressive acquisitions in the past years, mainly at state-forced auctions of assets of bankrupt rival YUKOS.
The debt deal is called R-Trade7 and is similar to six previous deals. Oil firms and traders Shell, BP, Vitol and Sempra will act as crude off-takers, lifting around 400,000 tonnes a month starting in July 2009.
But unlike previous trade finance deals, traders will provide $800 million of their own cash out of $2.85 billion.
“With this export loan, the previous share repo loan and good cash generation at the moment, Rosneft should have no problems meeting the repayment of $7 billion next month,” one source, who asked not to be named because he is not allowed to talk publicly about the issue, told Reuters.
In June, Rosneft borrowed $2.35 billion at 5.5 percent from Western banks putting 3.7 percent of its stock as collateral in a repo operation, Russian media have reported.
It means the company has already accumulated $5.2 billion in credit resources and will need to commit around $2 billion of own cash to meet the repayment schedule.
State-controlled Rosneft became Russia’s most indebted oil company when it raised a $24.5 billion loan from Western banks to buy assets of bankrupt oil firm YUKOS at state-forced auctions.
The last $6.5-$7 billion part of the loan matures in August-September and Rosneft has said it was considering a number of options to refinance it, including local and foreign capital debt markets and structured deals.
Vedomosti business daily reported on Thursday the latest credit-backed loan was raised at Libor plus 1.25 percent – much cheaper than Rosneft could have borrowed on the Eurobond market.
By comparison, last month Russia’s No.3 bank Gazprombank raised a $500 million Eurobond at a coupon of 7.933 percent.
Rosneft has pledged to reduce its debt to EBITDA (earnings before interest, taxes, depreciation and amortisation) ratio to one in 2008-2009. Its net debt fell $2.7 billion to $23.58 billion as of March 31. First quarter EBITDA was $4.698 billion. (Reporting by Dmitry Zhdannikov; Editing by Paul Bolding and Sue Thomas)