Nord Stream Reached Financial Close on Second Phase

Source: Reuters 2/22/2011, Location: Asia

The Gazprom led Nord Stream project has reached financial close on its second phase financing with the 2.775 billion euro loan due to be officially signed in Berlin on March 4th.

Twenty two banks have signed into the deal, a similar group that funded the 3.9 billion euro debt package for the first phase this time last year. The contractual structure on the financing is very similar. The difference on the latest deal is the loan pricing is much cheaper, given the improvement in the credit markets over the last 12 months.

Pricing on the commercial bank tranche is 160bp over labor during construction compared with 275bp on the phase one deal. The phase 2 funding is split between the 10 year 825 million euro commercial bank tranche and three 16 year tranches backed by German and Italian government agencies. Hermes, UFK and Sace. These tranches total 830 million euro, 570 million euro and 550 million euro respectively and are priced at 110bp, 120bp and 115bp. This pricing compares to 160bp, 180bp and 165bp on the first deal.

The second phase financing provides debt for the second pipeline on the scheme. The project will ship gas from Russia direct to Germany via the Baltic. The shareholders are Gazprom, BASF BASF.F, E.ON, Gasunie and GDF Suez.

Gazprom yesterday denied reports construction of phase 2 was being delayed due to concerns over the European gas market.


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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