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. Last Updated: 07/27/2016

Alfa, Gazprom Ink Loan, Cooperation Deals

Alfa Bank and Gazprom on Thursday agreed on restructuring Gazprom subsidiary Sibur's $78 million debt to the bank that satisfies all concerned parties, Alfa Bank said in a statement.

Sibur is Russia's largest petrochemical company and has just emerged from bankruptcy.

Alfa Bank, the nation's largest private bank, and Gazprom also signed an agreement on strategic cooperation, the press release said.

Under the agreement, Alfa Bank will loan $150 million to Gazprom, extending its credit limit to the gas giant to $350 million.

The parties agreed on credits until 2004. Alfa Bank's loans to Gazprom are expected to restore the company's balance of payments. Gazprom also plans to place free cash flow on Alfa Bank's correspondent accounts.

The credit is the latest in a series of efforts by the gas monopoly to raise development funding.

Its share price has fallen nearly 30 percent this month over rising debt worries.

The company intends to embark on an international road show next week in preparation for a eurobond issue of between $400 million and $1 billion.

Meanwhile, bankers in London said Gazprom subsidiary Gazprombank's planned euro-denominated five-year bond might be sold to investors this week or next.

Gazprombank completed a roadshow of investor presentations at the beginning of July, but did not sell the bond that had been presented because of poor market conditions.

Earlier this year, investors expected up to 200 million euros of five-year bonds, via special purpose vehicle Gazinvest Finance BV.

The expected bond was rated Ba3 by Moody's Investors Services in July. That rating is within sub-investment grade, or "junk." Even so, the Moody's rating is higher than parent Gazprom's B+ assigned by Standard and Poor's.

(Prime-Tass, Reuters, MT)