Glencore International Plc and Vitol SA, the two biggest oil traders, raised $7.5 billion in loans to fund a $10 billion crude-purchase deal with OAO Rosneft, according to three people with knowledge of the deal.
The five-year debt will be marketed to a wider group of lenders next week and may be increased to $10 billion, said the people, who asked not to be identified because the matter is private. Specially-created companies will raise the loan, which will be backed by a portion of future oil production of Moscow-based Rosneft, the people said.
Bank of America Corp., HSBC Holdings Plc and Societe Generale SA are helping to market the debt as bookrunners, the people said. Deutsche Bank AG, Citigroup Inc., BNP Paribas SA and JPMorgan Chase & Co. are also participating at the same level, the people said.
A Moscow-based official at Rosneft, and a spokesman for Glencore in Baar, Switzerland, who both asked not to be named citing company policy, declined to comment on the deal. Patrick Handley, a London-based spokesman for Vitol, also declined to comment on the financing.
Rosneft, Russia’s largest oil company, signed oil supply contracts with the two commodity companies for 67 million tonnes of crude, according to a statement yesterday. The state-run company will receive a payment of as much as $10 billion before it starts supplying the oil, it said.
Banco Santander SA, Credit Suisse Group AG and Morgan Stanley joined the deal as mandated lead arrangers, one of the people said. ABN Amro Bank NV, Barclays Plc, Lloyds Banking Group Plc, Rabobank International and UBS AG are lead arrangers, the person said. Deutsche Bank is agent.
Rosneft raised a total of $31 billion from banks for the purchase of TNK-BP, the largest acquisition financing for a Russian company, according to data compiled by Bloomberg.
Glencore fell 0.6 percent to 385.1 pence by the close in London trading, valuing it at 27.3 billion pounds ($41.1 billion).