Exclusive: Rosneft could raise $10 billion bonds for TNK-BP deal

Fri Dec 14, 2012 6:45am EST
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By Douglas Busvine and Alexander Smith

MOSCOW/LONDON (Reuters) - Russia's Rosneft (ROSN.MM: Quote) could raise as much as $10 billion on bond markets to finance its takeover of Anglo-Russian oil firm TNK-BP TNBP.MM, potentially matching loans backed by future oil exports.

Bankers familiar with Rosneft's plans to finance the $55 billion deal to buy Russia's No.3 oil firm say the state-controlled oil major was strongly encouraged by high investor demand for a recent $3 billion bond offering.

Demand for the two-tranche Eurobond deal last month topped $20 billion, but Rosneft decided to limit the size, leaving investors clamoring for more, three financial sources familiar with the matter told Reuters.

"They can do a very large transaction in public markets," said one source acquainted with Rosneft's financing plans, adding that a multi-tranche deal of up to $10 billion could be launched before the deal's expected closing in early 2013.

Rosneft declined to comment.

Rosneft is paying relatively low interest on its most recent Eurobonds - 3.1 percent on $1 billion in notes due in March 2017 and 4.2 percent for $2 billion in bonds maturing in March 2022.

It is also talking to oil majors and traders including Shell (RDSa.L: Quote), Total (TOTF.PA: Quote) and Glencore (GLEN.L: Quote) to raise up to $10 billion, secured against future oil exports, sources have told Reuters.

The takeover would create the world's top listed oil firm by output, pumping the equivalent of 4.6 million barrels per day, twinning TNK-BP's cash-generating prowess with Rosneft's deep reserves of oil, which are sufficient to last a quarter of a century.   Continued...

The company logo at a Rosneft petrol station in St.Petersburg October 23, 2012. REUTERS/Alexander Demianchuk