RLPC-BP and Rosneft raising $5 bln prepayment loan

LONDON Thu Nov 21, 2013 10:10am EST

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LONDON Nov 21 (Reuters) - BP Plc and Russian oil giant Rosneft are raising a new $5 billion, five-year loan to finance BP's purchase of crude oil from Rosneft, banking sources said on Thursday.

Rosneft has already agreed a series of prepayment deals with commodity trading firms including Trafigura and Glencore Vitol .

"BP is working with Rosneft to sign a long-term supply contract where BP acts as an offtaker. The final terms of the contract are yet to be finalised between the parties," a Rosneft spokesperson said.

The prepayment deals have raised billions of dollars for Rosneft, which borrowed $30.1 billion to finance its purchase of TNK-BP in two separate loans in 2012 and 2013.

Rosneft has to repay around $5 billion of a $12.7 billion bridge loan by December 21.

While some of the prepayment facilities could be used to repay part of Rosneft's outstanding bridge loan, the use of proceeds will be at Rosneft's discretion, bankers said.

"Rosneft is getting cash in, they've raised cash from trade deals and substantial amounts of cash are flowing into their coffers. It's up to them to use it (the loan) however they want to," a senior banker said.

The new $5 billion deal will consist of a $1.5 billion tranche which is expected to close in December and a $3.5 billion tranche which will be raised in the New Year, bankers close to the deal said.

The banks arranging the loan, Deutsche Bank, HSBC, Bank of China and Lloyds will provide the first $1.5 billion tranche along with another bank, which will be available to BP and Rosneft by mid December, one banker said.

The full $5 billion loan will pay a margin of 200 basis points (bps) and the final bank group is expected to comprise around 15 banks.

BP declined to comment.

PREPAYMENT DEALS

Rosneft agreed an $8.32 billion loan with commodity traders Glencore Vitol in May and $1.5 billion prepayment loan with Swiss-based trading house Trafigura in October.

The Russian oil giant also signed a prepaid export contract with Chinese oil and gas company Sinopec in October, which could be worth up to $85 billion, based on the supply of 100 million tonnes of crude oil over a ten year period starting in 2014.

"There have been a number of deals like this in the market. BP is a natural buyer and Rosneft a natural seller so it is would be strange if BP didn't ask for a deal like this," a banker close to the deal said.

(Editing by Tessa Walsh)

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