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Italian Bank To Syndicate $5.8B Loan For Rosneft Deal

Rosneft

Intesa Sanpaolo, Italy’s largest bank by market capitalization, has started the process to syndicate the US$5.8 billion (5.2 billion euro) loan it had extended to Glencore and the Qatar Investment Authority to help them fund the acquisition of a 19.5 percent interest in Russian oil giant Rosneft in December last year, Reuters reported on Thursday, citing banking sources.

Intesa Sanpaolo is now looking at ways to spread the risk, and has launched a loan syndication process with a “limited group of banks”, a banker told Reuters.

The deal for the privatization of 19.5 percent of Rosneft, announced in December and completed in January, valued the stake at around US$11.3 billion.

Upon announcing the deal, Rosneft said that the acquisition would be financed with own funds from the buyers as well as debt financing, the bulk of which would be provided by Intesa.

The Italian bank’s loan to Glencore and the Qatar Investment Authority came under regulatory scrutiny over whether it would violate EU sanctions against Russia.

In March this year, Italy’s Financial Security Committee approved the loan. The Italian committee—which includes representatives of Italy’s foreign, justice, and finance ministries, as well as the financial police, the central bank and the anti-mafia authorities—found no violations. Rosneft, as well as its chief executive Igor Sechin, are among the sanctions targets.

No Russian banks are involved in Intesa’s current syndication process, according to two of Reuters’ sources.

“It is a complicated deal and not everyone will have the appetite for it,” according to one banker.

In February, the head of Intesa’s operations in Russia, Antonio Fallico, told Reuters that the bank was talking to 14 banks to syndicate the loan, and would pick 2-3 banks to take up to US$3.364 billion (3 billion euro). Back then, Fallico said that Intesa was in no rush to complete the syndication deal.

By Tsvetana Paraskova for Oilprice.com

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  • Naomi on May 26 2017 said:
    Italian bank and Russian company are oxymorons.
  • Naomi on May 25 2017 said:
    Add some Venezuelan paper to improve the quality of this gem.

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