denotes premium content | Jan 6 2009 
Feature
posted 23 Feb 2005 in Volume 8 Issue 4
Varyoganneft, Russia: Exceptional in oil
MLA: BNP Paribas
Borrower: Varyoganneft, Russneft group
Deal size: $200m
Type: crude-oil pre-export financing
Tenor: four-year linear repayment
Signing: 7 July 2004
General syndication closing: November 2004
Although tapping second-tier Russian corporates is nothing new, on this deal, BNP Paribas has arranged one of the first and certainly the largest international financings for a mid-sized second-tier Russian oil producer. It is the first major financing raised by the RussNeft group and was fully underwritten and funded by BNPP at a particularly tense time for the loan market in Russia.
Despite the pre-financing structure of the transaction, reserve-based-lending techniques were used to analyse the underlying oil and gas reserves and to quantify the debt amount. The financing brings a new approach to the evaluation of the client’s repayment profile beyond the classical pre-finance structure.
BNPP was sole MLA, underwriter and passport bank on the deal. Lead arrangers are Bayerische Hypo- und Vereinsbank, Commerzbank and Moscow Narodny Bank. Banque Commerciale pour l’Europe du Nord-Eurobank was arranger. Credit Suisse, KBC Bank, HSH Nordbank London branch and Caterpillar Financial (Zurich) were senior lead managers.
“We were familiar with the owner and the chairman of RussNeft group (formerly chairman of Slavneft, the seventh biggest Russian oil producer),” says a BNPP banker who worked on the deal. “Also, this transaction gave us an opportunity to accompany a new Russian oil producer in the beginning of its development phase with sponsorship from RussNeft and Glencore.”
