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Wednesday, March 18, 2009

Russians line up for western cash

03-18-2009 - Upstream OnLine - Gazprom Neft and Tatneft are the latest Russian oil companies to begin talks with western banks to secure syndicated loans, according to banking sources. Gazprom Neft, the oil arm of Russia's gas export monopoly Gazprom , is sounding out banks over a $1 billion loan, while mid-sized oil company Tatneft wants up to $600 million, the sources told Reuters. In addition, state-controlled oil company Rosneft is having preliminary talks with its lenders over refinancing a $1.35 billion, 15-month loan the company signed in January, the bankers said. At the time of signing, banking sources close to the Rosneft deal said that the loan was expected to be refinanced by a capital markets take-out or a pre-export financing in May or June. The companies join oil giant Lukoil, which has been in talks with banks for a loan worth $1 billion to $1.5 billion. In addition, Russia's third largest oil producer TNK-BP is already in the loan market via arrangers Calyon and Deutsche Bank in order to increase a $150 million facility. All the deals will be structured as secured pre-export financings to provide extra security for lenders. Syndicated loan bankers have told Reuters Loan Pricing that scarcity of capital means that loans cannot be underwritten and for the foreseeable future will have to be clubbed, which negates the syndication process. Borrowing costs have soared since last year - the banking sources said that margins on the new loans could be up to 400 basis points over LIBOR. Last year, these companies secured western loans with margins ranging from 85-95 bps over LIBOR for Lukoil, up to 150-175 bps for Gazprom Neft.

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