22 Nov 2010 12:44

Evraz raises bank-syndicate pre-export credit of $950 mln

MOSCOW. Nov 22 (Interfax) - Russian steel major Evraz Group has raised a pre-export credit of $950 million due in 2015 from a syndicate of fourteen banks coordinated by Deutsche Bank, ING Bank, and The Royal Bank of Scotland, the company said.

Reports of a syndicated credit of $840 million secured with export revenues for refinancing current Evraz debt surfaced in early October. It was unofficially reported several times more than twice that number of banks were interested in syndicating the credit.

The interest rate on the new syndicated credit is LIBOR plus a floating rate tied to Evraz debt margin level, which is currently at 2.8 percentage points, the group said on Monday.

All the monies will be used to pay-off syndicated credit debt due in 2012.

Thanks to this deal and the placement this fall of 15 billion rubles worth of five-year ruble-denominated bonds, Evraz has been able to extend its debt and now has no significant payment obligations in 2011-2012, the company said.

In November of 2007, Evraz Group signed an agreement for a $3.214 billion credit from a bank syndicate headed by Deutsche Bank. The rate on it was LIBOR+1.8% per annum. The loan was composed of two tranches - $2.714 billion for five years and $500 million for three years. In 2009, the company agreement with the banks to revisit the credit covenants in exchange for a rate hike to LIBOR+3.8% p.a.

Evraz's financial report for 2009 said that as of December 31 the company had yet to pay off $2.082 billion in credit principle and $4.8 million in interest.

The group's net debts stood at $7.198 billion on June 30 this year versus $7.226 billion on December 31 last year, including $1.74 billion in short-term debt. Extended short-term debt remains a company priority, a management representative said in September, noting the substantial decrease in rates observed over the past year.

The company's 2009 report also says that when last year ended the average rate on long-term borrowing in dollars was 7.3% p.a. and in rubles - 13.49%. For short-term borrowing, those figures are a respective 4.18% and 13.25%. As of end-2009, Evraz faced paying off $1.8 billion in debt principle in 2011 (around 22% of overall company debt on the reporting date), $3.3 billion in 2012-2014 (40%), and $1.1 billion thereafter (14%).

This past March, the company placed series 1 and 3 ruble-denominated bonds totaling 15 billion rubles at 9.25% p.a., and then series 2 and 4 (15 billion rubles) at 9.95% in November.

Evraz Group is a major vertically integrated mining and metals company with assets in Russia, the United States, Italy, and the Republic of South Africa. About 72% of the stock in the London-listed company is owned by Lanebrook, whose beneficiaries, on the one hand, are Millhouse, the holding company for the assets of billionaire Roman Abramovich and his business partners (50%); and Evraz executives Alexander Abramov and Alexander Frolov (50%), on the other.