Rosneft's Loan to Incur Higher Costs

Rosneft faces higher borrowing costs as it raises $1.35 billion in Russia's first international corporate loan this year.

The company will pay annual interest of 1.8 percentage points more than the London interbank-offered rate for the 15-month loan, said a banker involved in the deal. Rosneft paid 1.25 percentage points to borrow $3.2 billion for five years in July.

"Raising longer-term financing is still a challenge even for top names like Rosneft," said Mikhail Galkin, a fixed-income analyst at MDM-Bank. "It's a very good transaction, but one shouldn't overestimate its significance as it's still a relatively short-term facility."

The total cost of Rosneft's new loan, including all commissions, is at least 5 percentage points, said Marina Vlasenko, an analyst at Commerzbank. The debt is backed by export contracts and it will likely be paid back ahead of time, the banker said.