Lukoil credit acclaimed as best deal of 2003
Posted: 19 December 2003
International Finance Review (IFR) acclaimed a $765 mln syndicated
financing facility, taken by OAO LUKOIL, as the Best Emerging Markets
Deal of 2003.
IFR is an authoritative British publication, covering international
financial markets. Awards by IFR mark successful deals, reflecting
opinions of main participants of financial markets. The awards are
made at the end of each year.
IFR judged that LUKOIL succeeded in making full use of improving
market conditions, and set a new benchmark in terms of deal size,
maturity, and price conditions, as well as innovative deal structure.
IFR notes that LUKOIL’s decision to aim for unprecedented
maturity length is in accordance with the Company’s well-considered
financial strategy.
Referring to improving conditions for borrowing by Russian companies,
the British publication also points out that it was very important
to avoid a situation where conditions, which appeared attractive
yesterday, will become prohibitively expensive tomorrow. IFR emphasizes
that LUKOIL was the first Russian borrower, which not only obtained
attractive price conditions at the time of signing the credit agreement,
but also negotiated possible further lowering of the margin in case
the Company secures an investment-grade rating or higher. This was
also the first deal, where the borrower has the right to fix the
interest rate at any time during the life of the credit agreement.
IFR quoted ABN AMRO director in syndicated debt, Michael Emery,
who said: «The quality of LUKOIL credit, together with the
innovative and robust nature of the transaction, resulted in an
extremely successful syndication. Importantly, this transaction
has seen several major syndicated investors return to the Russian
market for the first time since the Russian financial crisis of
1998».
As it was announced earlier, LUKOIL signed the Facility with a
group of foreign banks in October 2003. The Facility consists of
two tranches: a USD 465 million 5-year tranche (LIBOR+2%) and a
USD 300 million 7-year tranche (LIBOR+2,5%). The Facility is secured
on export receivables.
The Facility will be used to finance export-related operations,
to refinance short-term indebtedness, to fund the Company’s
investment program and for general corporate purposes.
International Finance Review (IFR) named LUKOIL’s USD 765
million syndicated loan the best EEMEA Emerging Market transaction
of the year.
For more information see www.lukoil.com.
Posted by Richard Price,
Editor Pipeline Magazine
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