UC RUSAL Secures Up to $4.75 Billion Syndicated Finance Facility

Strategic Insights -

UC RUSAL, the world's largest aluminium producer, has announced the issuance of a mandate to arrange a syndicated finance facility worth up to $4.75 billion. The facility proceeds will primarily be used to take out the outstanding debt under the International Override Agreement, with the remaining balance used to repay the company's other debt. The deal is expected to close by the end of September 2011.

Key Takeaways:

  • The syndicated finance facility will be used to take out the outstanding debt under the International Override Agreement, with the remaining balance used to repay RUSAL's other debt.
  • The facility has drawn significant interest from the banking community, with a wide range of banks expressing interest to join the facility in the forthcoming syndication.
  • Entry into the facility with a top ticket level ensures a new participant the titles of a bookrunner and a coordinating mandated lead arranger.
  • The deal is expected to close by the end of September 2011, with an interest rate of 3-month LIBOR plus a margin of 2.35% per annum.
  • The margin will be reset quarterly in accordance with a margin adjustment mechanism calculated based on the ratio of Total Net Debt / covenant EBITDA.
  • The facility is expected to be finalized shortly, with BNP Paribas (Suisse) SA, ING Bank N.V., and other banks playing key roles in the agreement.
  • RUSAL's Head of Equity and Corporate Development, Oleg Mukhamedshin, expressed confidence in the company, stating, "Despite the complicated situation in the financial markets, RUSAL's new pre-export finance deal raises much interest and has gained support from the leading international banks."

Statistics:

  • Up to $4.75 billion in syndicated finance facility (Source: UC RUSAL)
  • Expected to close by the end of September 2011 (Source: UC RUSAL)
  • 3-month LIBOR plus margin of 2.35% per annum interest rate (Source: UC RUSAL)
  • Margin will be reset quarterly in accordance with a margin adjustment mechanism calculated based on the ratio of Total Net Debt / covenant EBITDA (Source: UC RUSAL)
  • International Override Agreement entered into by RUSAL and international lenders on 7 December 2009 (Source: UC RUSAL)

Sources:

  • "UC RUSAL Announces Issuance of Mandate to Arrange Up to USD 4.75 Billion Syndicated Finance Facility" by United Company RUSAL ( Exact date not specified)