Russia to borrow $4 bln for debt refinancing
MOSCOW. April 18 (Interfax) - UC Rusal will raise a syndicated loan of $4 billion by the end of the year, the aluminum giant's capital markets director, Oleg Mukhamedshin, told Interfax.
Mukhamedshin said the company's plans included refinancing restructured debt to international creditors and then obtaining a credit rating and issuing Eurobonds, possibly using the proceeds to pay off part of the syndicated loan. Rusal might return to the idea of issuing yuan bonds if the market situation is favorable.
Mukhamedshin said the credit would be raised this year and the Eurobonds might be placed in 2011 or 2012. That, he said, would be the best configuration for issuing the bonds. "For this we need a credit rating, and we think it would be better if a rating agency were to assess our leverage after we have restructured debt and removed the covenants imposed by the restructuring agreement [signed at the end of 2009]," Mukhamedshin said.
He said the company was in talks with around ten banks. "They are foreign banks, but it can't be ruled out that Russian banks will be involved, too," he said.
Rusal will be able to start paying dividends again in 2012 if the covenants are lifted. "We don't see any restrictions on this," Mukhamedshin said, adding that the dividend policy used to call for up to 50% of net profits being paid. "But we can't go by this any longer, and we'll be discussing a new dividend policy with shareholders," he said.
Reports have said Rusal plans to refinance around $5 billion debt - $3 billion of it as a syndicated loan, $1 billion in ruble-denominated bonds, $150 million in yuan bonds and the rest in Eurobonds. Rusal later put the yuan-bond plans on hold due to a downturn in the markets.
