Glencore International Plc (GLEN) and Vitol SA, the world’s two biggest oil traders, raised $8.3 billion in loans to fund their crude-purchase deal with OAO Rosneft (ROSN), according to three people with knowledge of the matter.
The five-year deal increased from $7.5 billion after 10 to 15 lenders joined the facility, said the people, who asked not to be identified because the terms are private. Further banks have the option to commit to the deal, which can be increased to as much as $10 billion.
Specially-created companies are raising the prepayment loan, which will be backed by a portion of future oil production of Moscow-based Rosneft, according to data compiled by Bloomberg. Russia’s largest oil company signed contracts and will receive a prepayment of as much as $10 billion for 67 million tonnes of crude, according to a March 6 statement.
A spokesman for Glencore in Baar, Switzerland, who asked not to be named citing company policy, declined to comment on the financing. Elizabeth Adams, a London-based spokeswoman for Vitol, also declined to comment.
About 15 banks committed to the deal earlier this year after an initial stage of syndication, people familiar with the matter said at the time. Bank of America Corp., BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co. and Societe Generale SA marketed the debt as bookrunners, the data show.
The loan pays interest at 210 basis points, or 2.1 percentage points, more than the London interbank offered rate, Bloomberg data show.
To contact the reporter on this story: Stephen Morris in London at email@example.com
To contact the editor responsible for this story: Faris Khan at firstname.lastname@example.org