Severstal Receives $1.2Bln for PBS

Severstal said Wednesday that it had signed a five-year syndicated loan to make immediately available $1.2 billion at an interest rate of 235 basis points over the London interbank offered rate.

The steelmaker has been in discussions with the arranging banks since the financial turmoil that hit the markets last week, and terms of the deal have changed, a banking source close to the deal said.

As previously reported, the pre-export financing was originally for $1.5 billion with a margin of 185 basis points over LIBOR, banking sources said.

Severstal appointed Bank of Tokyo-Mitsubishi-UFJ, Barclays, BNP Paribas, Citi, Commerzbank, Deutsche Bank, Royal Bank of Scotland and Societe Generale as mandated lead arrangers earlier in September.

The proceeds will be primarily used for the acquisition of PBS Coals Company and other corporate purchases. The credit agreement also provides for an option to increase the amount.