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. Last Updated: 07/27/2016

Rosneft Announces $3.6Bln More in Borrowing

Rosneft will borrow about $3.6 billion from Western and Russian banks, the firm said Friday, in a step that would further add to its heavy debt load.

The state-controlled oil firm, which has this year spent over $20 billion to buy assets of bankrupt oil firm Yukos at forced auctions, did not say whether it would use the proceeds to refinance its earlier debt or for other purposes.

The money will come from a syndicate of Western banks, which will lend $3.25 billion for five years, while the country's second largest bank VTB will provide another 8.4 billion rubles ($329.5 million), the company said.

Rosneft's debt has been fluctuating at around $30 billion this year as it had secured a record $22 billion in bridge financing from Western banks to buy Yukos' top assets.

Its most recent debt deals include a $2 billion syndicated loan and a $2 billion eurobond, which is less than the $5 billion it planned to issue, Interfax reported, citing an unidentified person close to the transaction.

The bonds will have maturities of five years and 10 years, Interfax said. Banks will stop taking orders for the debt Tuesday, Interfax said.

Rosneft is also working on a convertible bond to refinance the $22 billion loan and has said it may float some additional stock.

The company plans to slash its debt to $15 billion by 2010 by using its own profits and proceeds from the planned sale of noncore assets acquired during the Yukos auctions.

Rosneft is rated investment grade by Moody's Investors Service and Fitch Ratings at 'Baa2' and 'BBB-', respectively. Standard & Poor's holds it one notch below investment grade at 'BB+'.

Reuters, Bloomberg