URALCHEM Group USD 220,000,000 Club Term Loan Facility
UralChem Group has secured a debut 5-year USD 220,000,000 Term Loan Facility via a club of relationship banks. The financing was arranged by ING Bank N.V. (“ING”), ZAO Raiffeisenbank (“RBRU”), Sberbank of Russia (acting through its Sberbank CIB and Sberbank Switzerland A.G., “Sberbank“) and VTB Capital plc (lending via VTB Bank (France) SA, “VTB”) (jointly “Mandated Lead Arrangers") whereas HSBC Bank plc (“HSBC”) and "Rosbank" (OJSC JSCB) (“Rosbank”) joined as Lead Arrangers. ING acted as Facility and Security Agent for the facility and as Mandate Documents Agent, RBRU acted as transaction Documentation Agent, Sberbank and RBRU acted as Passport Banks.
The loan was structured as a classic pre-export finance facility backed by deliveries of export-grade fertilizers and other export-grade commodities. Inked on 14th December 2012 the facility was one of the first financings for Russian corporate borrowers based on a newly launched LMA form for preexport finance arrangements.
Orrick (through its Moscow and London offices) acted as legal advisors on behalf of the lenders and Baker & McKenzie - CIS, Limited acted as legal advisors on behalf of the company.
Exercising a multi-currency option embedded into the loan documentation, the facility was funded in Euros on 21st December 2012 and will be used to refinance existing indebtedness of the Group. The proceeds of the loan will allow for an extension the Group’s debt profile as well as the release of existing security.
The club loan was well perceived by the market and raised commitments exceeding the targeted amount twice, while UralChem decided to retain initially targeted amount intact.
URALCHEM Group is the second largest ammonium nitrate producer in the world and number one in Russia and the second largest nitrogen fertilizer producer in Russia.
UralChem’s main competitive advantage is the development and production of innovative fertilizers tailored to particular countries, markets and segments along with ammonium nitrate and urea – in accordance with the chosen strategy of “market tailored products” focused on ensuring production flexibility.