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Bankers await Intesa’s €5.2billion loan for Rosneft buy 
March 31, 2017 / 3:51 PM / 8 months ago

Bankers await Intesa’s €5.2billion loan for Rosneft buy 

LONDON (Reuters) - Syndicated loan bankers are still waiting for details of a €5.2bn (4.43 billion pounds) loan that has been underwritten by Intesa Sanpaolo and finances the purchase of a 19.5% stake in Russian energy giant Rosneft (ROSN.MM), banking sources said.

FILE PHOTO: The company logo of Rosneft is seen outside a service station in Moscow, Russia, November 12, 2013. REUTERS/Maxim Shemetov/File Photo

To syndicate the loan, Intesa (ISP.MI) will have to give banks full details of the facility to allow lenders to get internal credit approvals as Russia is still subject to economic sanctions.

Sovereign wealth fund Qatar Investment Authority and oil trading company Glencore (GLEN.L) bought the stake for €10.5bn in December in one of the biggest transfers of Russian state assets into private hands since the 1990s.

QIA and Glencore provided €2.8bn and Intesa, Italy’s biggest retail bank, provided a loan for the bulk of the purchase price, Reuters reported on January 17. It remains unclear how the balance of €2.2bn was financed.

Antonio Fallico, chairman of Banca Intesa Russia, told Reuters in February that it was talking to 14 banks to syndicate the loan with the aim of choosing two to three banks to take up €2.5bn-€3bn.

Intesa initially held talks with lenders after the acquisition was announced, but further details have not been forthcoming and bankers are questioning whether the deal will now be syndicated.

“Intesa said they would launch the deal when the time is right – when is that?” one banker said.

Intesa Sanpaolo declined to comment.

The Italian government approved the €5.2bn loan on March 20. The deal was subject to regulatory scrutiny due to the size of the loan and its potential for entanglement in EU sanctions on Russia.

Rosneft, its boss Igor Sechin and Russia’s main state banks are all subject to sanctions imposed after Russia’s annexation of Crimea from Ukraine in 2014.

Europe’s top court on Tuesday upheld EU sanctions on Russia, including Rosneft.

Intesa could chose not to syndicate the loan and keep it on its balance sheet, bankers said, adding that a fully underwritten loan of this size would be challenging for any bank to hold, given the banking industry’s constraints on capital, bankers said.

“It’s a huge amount to take and hold – I haven’t seen any fully underwritten loans like this which haven’t then gone out to syndication – banks are encouraged to do this. I thought it would be done and dusted by now,” a third banker said.

Bankers contacted Intesa and parent bank IMI for more information after Fallico’s statement in February, but none has been forthcoming and lenders are wondering whether to release resources that have been reserved for the deal.

“The longer they leave it, the less appetite there will be - we need to see the nuts and bolts of the deal before the heat goes out of it,” the third banker said.

Time may not be pressing for Intesa, which received a 19.5% stake in Rosneft as collateral for the loan on January 3, according to Reuters, and in February Fallico told Reuters that there was ‘no rush’ in closing the syndication.

Additional reporting by Stephen Jewkes in Milan. Editing by Tessa Walsh

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