Consortium Ups Loan for Rosneft to $3Bln

Deutsche Bank and Calyon led banks providing $3 billion of loans for Rosneft, lured by near-record fuel prices and an expanding economy.

The group of 16 lenders increased the size of the financing from $2 billion proposed last month, said Mehmet Saydam, director of structured commodity and trade finance at Deutsche Bank in Amsterdam. They are charging 0.95 of a percentage point more than interbank borrowing rates for the five-year loan.

The same banks that are scaling back lending in the United States and Europe because of credit losses have agreed to provide at least $12 billion this year to help Russian companies expand, led by United Company RusAl, the world's largest primary aluminum producer. The government expects the oil-led economy to grow by 7 percent this year.

Lenders "want to go to safe places," Saydam said in an interview Friday.

Rosneft's new borrowing allows the company to replace a part of a $22 billion bridge loan used to buy most of the assets of bankrupt oil firm Yukos. The company has a March 19 deadline to refinance $5 billion of the loan. Interest on the remainder of the loan will rise to 50 basis points, or half a percentage point, over London Interbank Offered Rates after March, according to Bloomberg data.

The new loan will be secured by crude oil export contracts, Rosneft said in an e-mailed statement Friday.

Banks may increase Rosneft's new loans by a further $1 billion as they seek more lenders to participate in the financing, according to two bankers involved who declined to be identified before the deal is complete.

"In the current situation, the borrowing conditions offered to Rosneft can be considered very good," said Dmitry Sentchoukov, emerging markets strategist at Dresdner Kleinwort in London.

Rosneft's third-quarter profit rose 80 percent to $1.89 billion after the purchase of the Yukos assets, the company said last month. Moody's Investors Service assigns Rosneft an investment-grade rating of Baa1. Standard & Poor's rates the company's debt at BB+, one level below investment grade.

Merrill Lynch and ABN Amro led banks providing $4.5 billion in January for RusAl to buy a stake in miner Norilsk Nickel. They charged 100 basis points over interbank borrowing rates in the first three months, rising to 200 basis points after a year.

X5 Retail Group, Russia's largest retailer, borrowed $1.1 billion last month in three-year loans to refinance debt, paying 225 basis points over Libor, up from 75 basis points in June.

Banks provided $82 billion of loans to Russian companies last year, a 150 percent increase from the previous year, Bloomberg data show.

n Rosneft may build its first gas stations abroad with 100 facilities in Mongolia, Kommersant reported Friday.

Rosneft is prepared to freeze prices for oil-product shipments to Mongolia at January levels until July, in return for land on which to build the gas stations, the newspaper said, citing Mongolian media.

The crude producer may also form a venture to supply aviation fuel to Mongolian airports, the newspaper reported.