(Adds detail, background)
* Glencore, Vitol ask banks for $500m each
* Loan uses Rosneft's oil as collateral
* Raises exposure issues for Rosneft lenders
By Tessa Walsh
LONDON, Jan 28 Commodity traders Glencore
International and Vitol have asked banks
for a $10 billion syndicated loan to finance the purchase of up
to 67 million tons of crude oil from Russian group Rosneft
, bankers said on Monday.
Rosneft agreed long-term crude supply contracts with
Glencore and Vitol in December. The contracts could be worth
around $50 billion, one of the bankers said.
The loan, which will be one of the biggest pre-export trade
financings, will use Rosneft's future oil exports as collateral,
Glencore and Vitol are arranging the loan and asked banks to
commit $500 million each and to express willingness to lend
more. The two companies have pledged to commit $4 billion to the
loan, a second banker said.
Glencore, Vitol and Rosneft declined to comment.
Bank of America Merrill Lynch and Citigroup are helping
Glencore and Vitol co-ordinate the loan, the second banker said.
The use of Rosneft's future oil exports as collateral means
banks view the loan as direct Rosneft risk although the loan is
being raised by Glencore and Vitol.
While Glencore and Vitol were expected to be able to raise
most of the money, some banks may find it difficult to lend
because of existing exposure to Rosneft.
Rosneft's top banks already have more than $1 billion
exposure each to the Russian oil giant, which is in the process
of completing a $29.8 billion acquisition loan to buy rival
Rosneft was expected to sign a $13 billion loan on Jan. 31
to buy 50 percent of TNK-BP from the AAR consortium after inking
a $16.8 billion loan to buy BP's 50 percent stake at the
end of December.
Rosneft asked banks to prioritise lending to its acquisition
financing over lending to the new $10 billion pre-export
financing in a letter last week, bankers said.
The pre-export financing was expected to be completed after
Rosneft's current $13 billion loan is closed in mid-February.
(Reporting by Tessa Walsh; Additional reporting by Alasdair
Reilly; Editing by Dan Lalor)