The facility bears an interest rate of LIBOR plus 2.35% with a 1.5-year grace period followed by quarterly repayments. The facility will be used to buy the business of U.S. PBS Coals Corporation (PBS), Severstal said in a statement.
"I am pleased to announce the successful signing of the credit agreement. In the current volatile environment on financial markets it demonstrates the strength of our company, and investor confidence in our business model. We will use the facility to continue to expand our company and create value for our shareholders," Severstal CEO Sergei Kuznetsov said.
The credit agreement provides for an option to further increase the loan facility, the statement said.
Severstal was earlier reported to obtain a $1.5 billion at LIBOR plus 1.85% per annum. However, global financial turmoil prompted international lenders to reduce the loan size and raise the interest rate.
The list of mandated lead arrangers includes ABN AMRO Bank N.V., the Bank of Tokyo-Mitsubishi UFJ, Ltd, Barclays Capital, the Investment Banking Division of Barclays Bank Plc, BNP Paribas SA, Citibank N.A. London Branch, Commerzbank Aktiengesellschaft, Deutsche Bank AG, Amsterdam Branch and Societe Generale, the statement said.
Severstal accounts for over 16% of Russian steel output, and has production facilities in Russia, the United States, Italy, France, Britain, and Ukraine.
The company is listed on the Russian and the London stock exchanges. In 2007, it produced 17.5 mln tons of steel and reported a $15.2 bln revenue.
