UPDATE 1-Russia's Lukoil delays Eurobond placement to autumn, may raise bridge loan

Thu Jun 26, 2014 8:52am EDT

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MOSCOW, June 26 (Reuters) - Russia's No.2 oil producer Lukoil may raise a bridge loan of up to $2 billion from the banks that had been arranging a Eurobond issue of that amount which has been postponed to the autumn, senior vice-president Alexander Matytsyn said.

"Our arrangers recommended that we don't place the Eurobond until demand comes back fully," he told reporters.

"The banks confirm their willingness to work with the company unless they get a written order not to."

Russian firms including Sberbank are testing the waters of global liquidity markets after a hiatus of several months caused by a crisis in relations with Ukraine, which has led to the worst standoff between Moscow and the West since the Cold War.

Some Western nations have imposed sanctions on several Russian companies and individuals, and this has led to a general increase in the premiums that domestic companies now have to pay to borrow abroad.

"We planned to raise up to $2 billion in Eurobonds but there is no market for it now," Matytsyn said, adding that the window could reopen in autumn.

"They (Citi and JP Morgan ) have a mandate (for the Eurobond issue) and we have a right to ask them for a bridge loan of up to $2 billion (for up to three years) before financing opportunities reopen."

Matytsyn added that Lukoil, which started up the West Qurna-2 oil field in Iraq earlier this year, had raised $1.5 billion from state-controlled Sberbank and another $300 million from the Russian private lender Promsvyazbank. (Reporting by Vladimir Soldatkin and Katya Golubkova; Editing by Kevin Liffey)

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