April 6, 2011

BNP Paribas and Deutsche Bank close five year and seven year syndications for JSC Lebedinskiy GOK, JSC OEMK and JSC Holding Company Metalloinvest

BNP Paribas and Deutsche Bank have successfully closed the syndication of five year and seven year loans for JSC Lebedinskiy GOK, JSC OEMK and JSC Holding Company Metalloinvest (together "Metalloinvest" or the "Group"), one of the world's leading iron ore producers. The two banks acted as the Initial Mandated Lead Arrangers (IMLAs) and Bookrunners in what is the first true syndicated loan facility of its size since the financial crisis and the biggest pre-export finance syndication in Russia's metals and mining industry. The facility was almost three times oversubscribed compared to the original target of USD 1.2 billion. The Group decided to close the facility at USD3.1 billion.

In addition to the IMLAs and Bookrunners, the following banks joined the facility as Mandated Lead Arrangers and Bookrunners upon close (in order of commitment size): Societe Generale Corporate & Investment banking, ING Bank N.V., Credit Agricole CIB, Commerzbank Aktiengesellschaft, The Bank of Tokyo-Mitsubishi UFJ, Ltd, Credit Suisse AG, Natixis, OJSC Nordea Bank, The Royal Bank of Scotland NV, and UniCredit.

WestLB AG joined the facility as Mandated Lead Arranger, and Sumitomo Mitsui Banking Corporation, Bank of America Merrill Lynch, Sberbank of Russia and Intesa Sanpaolo Bank Ireland Plc as Senior Lead Arrangers. Lead-Arrangers are Standard Bank Plc and Morgan Stanley with J.P. Morgan plc as Arranger and JSCB Bank of China (Eluosi) joined as Lead Manager.

Pavel Mitrofanov, Deputy CEO and CFO of Metalloinvest says, "We are happy to announce the closing of one of the largest syndicated pre-export financings in metals and mining in the CIS which turned out to be the largest syndicated pxf loan facility since the crisis. The Group has not only succeeded in closing a landmark-sized syndication, but has also attained highly competitive margins that are linked to the leverage ratio and will be 225 above LIBOR based on the 2010 financial year audited financial results. Therefore, we are happy to state that our company's margins have returned to the pre-crisis levels which is a remarkable achievement, particularly considering the size of the syndication. The success of the transaction reflects the main strengths of the Group and the superior quality of its assets which both led to the Group's good financial results and cash flow during the economic crisis and allowed us to significantly decrease financial indebtedness of the Group in 2009-2010".

Helen Guillemot, Head of Loan Syndication & Trading, E&C Structured Finance, CIS, Eastern Europe & Turkey at BNP Paribas adds, "As a syndicator, this facility has been particularly important event in the loan market, being a true syndication run by the two IMLAs and Bookrunners who drove forward all distribution aspects. It has been a while since we have been able to get our heads out of club land and we are very satisfied with the final syndication results and to see a loan so warmly embraced by the syndications market".


Boris Jaquet, Director of Distribution and EM Loan Trading at Deutsche Bank says, "The size of the oversubscription and the diversity of the pool of committed banks are a testimony to Metalloinvest's superior relationship with its banks. The result of the syndication clearly shows that appropriate structure, pricing and client relationship pull are the right combination to achieve a landmark transaction in what is still a difficult bank market."

Metalloinvest is the largest iron ore and HBI producer in Europe and CIS and the owner of one of the largest iron ore reserves in the world. In 2010 the Group produced 35.1 million tonnes of concentrate, 21.9 million tonnes of pellets, 2.3 million tonnes of HBI and 6.1 million tonnes of steel. In the first half of 2010 Metalloinvest generated approximately USD1.2 billion of EBITDA with overall EBITDA margin of 37%. In 2010 Metalloinvest repayed USD1.4bn reducing its debt level to USD 4.1bn by the end of 2010.

 

For further information please contact:

Helen Guillemot

Boris Jaquet

Head of Loan syndications

Director

E&C Structured Finance CIS, Eastern Europe & Turkey

Distribution and EM Loan Trading

BNP Paribas

Deutsche Bank

+ 41 58 212 2198

+ 44 207 545 7937

helen.guillemot@bnpparibas.com

boris.jaquet@db.com

 



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