UPDATE 3-Rosneft lines up financing for $55 bln TNK-BP takeover

Douglas Busvine and Vladimir Soldatkin
Reuters Middle East

* Raises $16.8 bln in loans to buy out BP stake in TNK-BP

* Agrees terms on supply deals with Glencore, Vitol

* Plans to sign 5-yr deals to supply 67 mln T of crude

* Rosneft's $55 bln takeover of TNK-BP is Russia's biggest

* The loans pay less than 3 pct in annual effective rate -


MOSCOW, Dec 24 (Reuters) - Rosneft, seeking to

finance Russia's largest-ever takeover deal, has raised $16.8

billion in bank loans and agreed on long-term trade finance

deals with the world's largest oil traders, Glencore

and Vitol.

The state-controlled company said on Monday the loans raised

from Western banks would be sufficient to cover its acquisition

of the 50 percent of Anglo-Russian oil firm TNK-BP

which it is buying from BP for $27 billion in cash and


The company also said it has agreed terms with Glencore and

Vitol to supply them with up to 67 million tonnes of crude oil

over five years under a trade finance deal, equivalent to around

270,000 barrels a day of oil.

Rosneft is due to buy the rest of TNK-BP from the AAR

consortium of Russian-born business tycoons for $28 billion,

completing the takeover of Russia's third-biggest oil producer

to make Rosneft the world's largest listed oil company, with

daily output equivalent to 4.6 million barrels per day.

It was not clear whether the oil supply deals would help pay

for the purchase of AAR's stake in TNK-BP but sources close to

Rosneft and potential lenders told Reuters recently that Rosneft

had been talks about using future oil exports as collateral to

help pay for the TNK-BP deal.

Industry sources said the deals will give Rosneft around $10

billion in advance payments from the traders, who will in turn

borrow the money from their banks, in return for securing

long-term access to oil from the world's largest-producing


"The price formula is in line with the prices Rosneft

receives for crude at medium-term tenders," Rosneft's chief

executive Igor Sechin said in a statement.

Assuming the full volumes are delivered, Rosneft would

supply the oil traders with around 270,000 barrels per day of

oil - or over a tenth of its current output. The pricing terms

were not diclosed, nor was the level of prepayment.

If the oil price averages $100 per barrel, the contracts

would on paper be worth around $50 billion.

Glencore's chief executive Ivan Glasenberg said on Monday

the announced agreement "further cements our relationship with

one of the world's leading oil and gas companies", while Vitol's

president and chief executive, Ian Taylor, hailed his deal as a

"long term, strategic partnership" with Rosneft.


Rosneft will buy out BP's half stake in TNK-BP for $17.1

billion in cash and 12.8 percent of its own shares, bringing

down the curtain on a profitable but fractious alliance between

BP and the oligarchs struck back in 2003.

In the second leg of the takeover, Rosneft has agreed to pay

$28 billion in cash to the AAR consortium, representing

billionaires Mikhail Fridman, German Khan, Viktor Vekselberg and

Len Blavatnik.

Subject to regulatory approvals, the takeover is expected to

close in the first half of 2013.

Commenting on the bank financing it had raised for the

purchase of BP's 50 percent in TNK-BP, Rosneft said it had

obtained a 5-year loan of $4.1 billion and a 2-year loan of

$12.7 billion from a group of international banks.

The banks include Bank of America Merrill Lynch, Barclays

Bank, BNP Paribas, BTMU, Citibank, Credit Agricole, ING Bank,

Intesa Sanpaolo Banking Group, J.P. Morgan, Mizuho Corporate

Bank, Natixis, Nordea Bank, SMBC, Societe Generale and Unicredit

Bank. All are acting as mandated lead arrangers and lenders.

"The loans pay less than 3 percent in the annual effective

rate. The deal is extremely beneficial for Rosneft. There is

huge appetite for Rosneft financing among the banks, the deal

was agreed in a very short period of time," a banking source


Sources familiar with the matter have said that Rosneft

could also refinance up to $10 billion of the cost of the TNK-BP

takeover deal on the bond market, ultimately raising more than

it needs to close the transaction.

"The company has lots of fundraising options. It has lots of

cash on hand, it secured the deal with traders and it

successfully issued a Eurobond," the source said.

Rosneft declined comments on financial details of the deal.

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