Russian aluminium producer Rusal said Thursday it had successfully closed its syndicated credit facility. The loan was heavily oversubscribed, with a total order book over $2.6 billion, exceeding the initial mandate of $1.5 billion, following strong demand from international banks, the company said in a press statement.

Rusal is discussing with the initial mandated lead arrangers on the possibility of increasing the facility amount from the original $1.5 billion. The loan will be provided in two amortizing tranches, for five and seven years respectively. The demand for the seven year tranche was substantially higher.

The interest rates are 1.1% and 1.4% over LIBOR for the two tranches, which sets new pricing benchmark for Rusal. The funds will be used to refinance existing debt, support the company's capital investment program, and other general corporate purposes, said Rusal.

"This is a landmark fund raising for Rusal. We are pleased that both the size of the credit facility and terms of the deal have established new records for private Russian companies borrowing funds from the international market," said CFO Vladislav Soloviov.

The initial mandated lead arrangers are ABN AMRO, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Calyon, Citigroup, Natexis Banque Populaires, and the latter acted as a transaction and syndication agent with ABN AMRO, while BNP Paribas, Calyon and Citigroup were bookrunners.

"We closed the syndication with almost 3 times oversubscription. The interest among international lenders was very high, proving there is strong demand for well structured and high quality transactions from Russia," said Rizwan Shaikh, director at Citigroup CEEMEA Debt Markets.

Rusal now accounts for 75% of aluminium production in Russia and 10% internationally. It was established in March 2000 through a merger of several largest aluminium smelters and alumina refineries in the CIS.