29 Oct 2010 13:13

Lukoil could place less than $1 bln in Eurobonds - source

MOSCOW. Oct 29 (Interfax) - Lukoil could place less than $1 billion in ten-year Eurobonds, a financial market source told Interfax.

The source said the oil company hoped to place at not more than 6% pa, but higher yields in the secondary market prevented the guidance, originally 6.25%, from being lowered.

Sources had told Interfax that the bid book might close on October 28, however internal procedures for approving deals with yield of 6.25% did not allow this.

Demand for the bonds is currently $1.7 billion, but since yield does not meet the company's expectations, the offering could be $750 million or even $500 million.

It is now thought the bid book will close when trading opens in New York today, at around 5.30 p.m. Moscow time.

Lukoil held road show for a dollar-denominated Eurobond offering in the United States, United Kingdom and Asia on October 25-28.

Lukoil has mandated The Royal Bank of Scotland, Barclays Capital and ING to arrange the meetings with investors.

This will be a 144 a/Reg S placement.

Lukoil last placed Eurobonds this time last year, selling $1.5 billion in two tranches: a five-year tranche of $900 million at 6.5% pa and a 10-year tranche of $600 million at 7.375%. The organizers then were also Barclays, ING and RBS.