Russian Tatneft loan likely to raise $1.5 bln

Russian oil firm Tatneft's three-year syndicated loan, launched at $900 million, is expected to raise up to $1.5 billion in the market, Reuters informs citing sources close to the deal.

The loan is still in syndication and is expected to close by the end of October, the sources added. Tatneft announced in August it had launched the loan, which is secured on oil exports and is split between a three-year tranche that pays 585 basis points (bps) over LIBOR and a five-year tranche that pays 685 bps.

Co-ordinating mandated lead arrangers are UniCredit and WestLB, while Royal Bank of Scotland is initial mandated lead arranger. All three are bookrunners along with mandated lead arranger Gazprombank.

Orgresbank and Bank of Moscow are mandated lead arrangers and Vitol joined as an original lender prior to syndication.

Proceeds are for general corporate purposes, including the borrower's refinery and petrochemical complex currently being constructed in Nizhnekamsk, Tatarstan. In syndication, lenders are invited to commit $75 million or more as mandated lead arrangers, $50 million as lead arrangers, or $25 million as arrangers. The first phase of the refinery is expected to have an annual capacity of 7 million tonnes.

The entire refinery project includes an aromatics complex with a capacity of 151,000 tonnes a year in paraxylene, a naphtha hydrotreater with 1.1 million tonnes capacity, a kerosene hydrotreater of 500,000 tonnes capacity and a diesel-hydrodesulfurisation facility of 1.6 million tonnes capacity.