OAO Rosneft, Russia’s largest oil company, is seeking about $15 billion of loans from non-Russian banks to fund the acquisition of BP Plc’s half of TNK-BP, according to two people with direct knowledge of the deal.
The state-run firm has approached lenders to discuss the terms of the financing, said the people, who asked not to be identified because the information is private. The deal is expected to include a bridge loan and five-year term portions, the people said.
Russian banks may also provide more than $5 billion of additional funding to support the deal, one of the people said. The total amount of debt Rosneft takes will depend on how much its capital structure can support while maintaining an investment-grade credit rating, the person said. The company has a BBB- grade from Standard & Poor’s, a BBB score from Fitch Ratings, and a Baa1 rating from Moody’s Investors Service.
BP said in June it’s considering a sale of its half of TNK-BP, the company’s Russian venture with a consortium of billionaires that is the country’s third-biggest oil and gas producer. AAR, which represents the interests of BP’s partners in the venture, and Rosneft have said they’re interested in buying shares.
Rosneft’s Moscow press office declined to comment when reached by telephone. Debtwire reported earlier on the financing.
Bridge financings usually mature in one year and are often used as backstops to bond offerings or longer-dated bank debt.