Rusal Secures Terms for $4-$5 Billion Credit with Banks, Plans Ruble-Denominated Bond Issue

Strategic Insights -

UC Rusal has agreed on the main terms with foreign banks for a syndicated credit of up to $5 billion and is in talks with major Russian banks to refinance loans. The company is also preparing a bond program worth 30 billion rubles. Rusal expects to refinance around $11.3 billion of its debt by September, including a $4 billion-$5 billion syndicated loan from international lenders.

Key Takeaways:

  • Rusal has agreed on the main terms for a syndicated credit of up to $5 billion with foreign banks, with the board due to approve the terms on June 24.
  • The company plans to refinance around $11.3 billion of its debt by September, including a $4 billion-$5 billion syndicated loan from international lenders, $4.5 billion owed to Sberbank, and $2 billion to Russian banks Sberbank, Gazprombank, and VTB.
  • Rusal is in talks with Sberbank, VTB, and Gazprombank on refinancing loans, with around $2.1 billion prolonged at the end of 2009 by an initial four years with a possible three-year extension.
  • The company plans to register a bond program totaling approximately 30 billion rubles, with the board approving the plans on May 11.
  • Rusal plans to cover a part of the debt refinancing with the issuance of $1 billion worth of ruble-denominated bonds, $150 million worth of yuan bonds, and Eurobonds.
  • The company's debt refinancing includes a $3 billion syndicated loan, and it plans to pay dividends if it keeps to the debt schedule and reduces its net debt/EBITDA ratio to 3.
  • Rusal is not planning any acquisitions until the debt has been fully refinanced.

Statistics:

  • Up to $5 billion: the amount of the syndicated credit agreed with foreign banks
  • $11.3 billion: the total amount of debt to be refinanced by September
  • $4 billion-$5 billion: the amount of the syndicated loan from international lenders
  • $4.5 billion: the amount owed to Sberbank
  • $2 billion: the amount owed to Russian banks Sberbank, Gazprombank, and VTB
  • 30 billion rubles: the value of the bond program
  • $16.8 billion: the amount of debt renegotiated at the beginning of December 2009
  • 4.3%: the net debt/EBITDA ratio currently
  • 8%-9%: the interest rate on the local loans when prolonged in 2009
  • 4%: the current interest rate on the local loans

Sources:

  • Interfax, June 2
  • Bloomberg TV