Rosneft Hires 10 Banks for $2B Debt Refinancing

Russian oil company Rosneft (ROSN.RS) has hired 10 banks to arrange a $2 billion pre-export loan facility to refinance existing debt, people familiar with the situation said Monday.

The new facility is to refinance part of the funding put in place to back Rosneft's acquisition of assets from bankrupt oil company Yukos (YUKO.RS), with around $11 billion in facilities still outstanding, a person said.

The financing comprises a five-year, pre-export loan priced at 95 basis points over Libor, two people said.

The joint bookrunners on the deal are Barclays, BayernLB, BNP Paribas, Deutsche Bank, ING, Mizuho, SG, SMBCE, Bank of Tokyo-Mitsubish, and WestLB, the people said.

Nevertheless, two or three other banks are still likely to join this list of bookrunners, one person said. A decision is expected imminently, he added.

"With so many banks providing the finance, the deal may not go to syndication. Twelve banks lending $2 billion doesn't seem such a challenge," one person said.

The company is currently considering other refinancing options to reduce its outstanding $11 billion of debt, another person said.

In addition to potential divestments, Rosneft is considering the sale of treasury stock comprising 9.44% of Rosneft's shares acquired from Yukos.

Rosneft attempted to issue its debut $2 billion Eurobond in July 2007, but the deal was pulled with the company citing unfavorable market conditions.

Only a handful of corporate borrowers from emerging economies have been able to access capital markets since July, with many turning to the syndicated loan markets for funding.

Copyright (c) 2008 Dow Jones & Company, Inc.


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