Bloomberg Businessweek
Rusal Agrees to Pay Additional Margin on $4.75 Billion Loan
Edited by : AL CIRCLE
2 min read
United Co. Rusal, the world’s largest aluminum producer, agreed to pay additional margins on a $4.75 billion loan after banks granted the company greater leeway on the terms of its debt.
“The company will have the option to introduce a 12-month covenant holiday, starting from any quarter in 2012, to allow it greater flexibility in the management of its financial ratios,” Moscow-based Rusal said today in a statement.
The producer completed an $11.4 billion debt refinancing in October that involved borrowing $4.75 billion from 13 lenders including BNP Paribas SA and ING Groep NV. The company said last month it sought a “more flexible approach” to covenants given the prospect of “continuing weakness” in commodity markets.
Rusal said today it agreed to pay a so-called supplemental margin during a covenant holiday and for the following 12 months. The rate will be 1.4 percent should the company’s ratio of net debt to earnings before interest, tax, depreciation and amortization exceed 5. It will be 0.95 percent at a ratio of 5 to 4.5, and 0.55 percent at a ratio of 4.5 to 4.
Rusal rose as much as 4.9 percent to HK$5.58 in Hong Kong trading, the highest intraday price in six weeks, and was at HK$5.37 as of 3:25 p.m. local time.
“The company will have the option to introduce a 12-month covenant holiday, starting from any quarter in 2012, to allow it greater flexibility in the management of its financial ratios,” Moscow-based Rusal said today in a statement.
The producer completed an $11.4 billion debt refinancing in October that involved borrowing $4.75 billion from 13 lenders including BNP Paribas SA and ING Groep NV. The company said last month it sought a “more flexible approach” to covenants given the prospect of “continuing weakness” in commodity markets.
Rusal said today it agreed to pay a so-called supplemental margin during a covenant holiday and for the following 12 months. The rate will be 1.4 percent should the company’s ratio of net debt to earnings before interest, tax, depreciation and amortization exceed 5. It will be 0.95 percent at a ratio of 5 to 4.5, and 0.55 percent at a ratio of 4.5 to 4.
Rusal rose as much as 4.9 percent to HK$5.58 in Hong Kong trading, the highest intraday price in six weeks, and was at HK$5.37 as of 3:25 p.m. local time.
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