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Mechel Secures $1 Billion Loan

By Eric Volkman - Apr 10, 2013 at 6:25PM

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The mining and metals concern will use the borrowings to retire short-term debt and refinance existing obligations.

The coffers of Mechel (MTL -2.17%) are now much fuller. The company has signed an agreement for a 40 billion ruble ($1.3 billion) loan from VTB Bank, a lender based in Mechel's home base of Russia. Of the total, roughly 25 billion ($802 million) will go toward the servicing of short-term facilities coming due in 2013. It also aims to refinance other debt obligations with the monies.

The loan, which comes due in 2018, has a 15-month grace period before quarterly amortization starts to kick in. The interest rate is pegged to Mechel's net debt/EBITDA ratio, which will decrease along with the firm's de-leveraging.

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