Severstal to raise $900m bridge-loan for aquisition of Esmark Inc

Severstal has reached an agreement to raise a $900m bridge-loan for financing the acquisition of US steel producer Esmark Inc for $17 per stock.

ABN AMRO, BNP Paribas and Citibank have agreed to arrange this unsecured non-amortized facility. The loan will pay 100bp over Libor till July 14, then the margin will reach 250bp till August 1 and after that it will go up to 275bp till September 30 when the loan matures.

The company intends to refinance the loan via an LPN issue worth $1.8bn. One more way to refinance the deal is a syndicated loan arranged by ABN AMRO, BNP Paribas and Citibank. The company will resort to the syndicated loan if the bridge facility is not repaid by August 15.