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Update: Rusal secures PXF covenant waivers
20 January 2012
Lenders have signed a covenant waiver agreement with Russian aluminium producer Rusal on its multibillion pre-export financing. Trade Finance provides full details on the new agreement.
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Lenders have agreed to offer Russian aluminium producer Rusal the option of introducing a 12-month covenant holiday on its $4.75 billion pre-export financing (PXF) signed in September 2011.
Rusal will be able to begin the holiday from any quarter in 2012. Trade Finance understands that as part of the new waiver agreement Rusal has decided to accelerate the date of a $500 million bullet repayment on the loan to this month.
Market sources explain that the covenant holiday is a precautionary measure to safeguard against a possible breach of covenants by Rusal in its present PXF agreement. Under the existing deal Rusal is expected to reduce EBITDA throughout the life of the loan.
However, falling aluminium prices, since the initial pre-export financing was signed in September 2011 raised a real concern in December that the company could breach covenants prompting the waiver negotiations.
Market sources state that Rusal...
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