Rusal seeks PXF covenant waivers

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16 December 2011

Russian aluminium producer Rusal asks lenders for covenant waivers on its jumbo pre-export financing after fears of continuing price drops for aluminium.

Rusal confirmed yesterday that it has asked lenders to agree to covenant waivers on its $4.75 billion pre-export financing (PXF) signed in September.

However it denied a report issued in Russian business daily Vedomosti that claimed the producer was seeking a twelve-month, interest-free grace period on its PXF because it would be unable to service its debt due to the falling price of aluminium.

The Russian firm instead stated that it wanted a “more flexible approach” to the calculation of its covenants and wanted to “introduce a period during which the covenants are not tested”. It claims not to have approached lenders asking to “skip” interest payments on its loans.

By the start of December 2011 aluminium prices had dropped to a low of $1,990 a tonne on the London Metal Exchange. In line with general base metals prices which have dropped overall by 25% since July on the...

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