Ukrainian steelmaker Metinvest has increased its three year pre-export financing to $700 million from $300 million after an oversubscription, banking sources close to the deal said.
It is the first syndicated facility for a Ukrainian borrower in 2010 and the country’s second-biggest ever loan, according to Thomson Reuters Loan Pricing Corp. (LPC) data. The largest was also for Metinvest — a $1.5 billion deal signed in 2007.
The new secured deal, arranged by Deutsche Bank, carries a margin of around 550 basis points (bps) over LIBOR.
In the Commonwealth of Independent States (CIS) region as a whole, there have been pre-export loans worth a total of $6.9 billion in 2010, according to TRLPC data.
Oil firm Gazprom Neft, coal producer SUEK and steel firm Mechel are in the market for secured loans, while Tatneft concluded a $2 billion deal at the end of June. [ID:nLDE65L1AP].
CIS pre-export financing is particularly attractive to investors as a safe haven as the security it offers means that a wider group of banks can access the deal, bankers say.
Metinvest, Ukraine’s largest group of iron ore concentrate and raw steel producers that is majority owned by System Capital Management (SCM), is also regarded as a strong credit by international lenders.
Metinvest’s previous loan was the $1.5 billion facility from 2007. The deal, which was split between a $1 billion, five-year structured steel pre-export term loan and a $500 million, one-year revolver paid a margin of 170 bps over LIBOR.
