Freshfields and Linklaters clinch roles as Rosneft issues debut €3bn eurobond

Freshfields Bruckhaus Deringer and Linklaters have won advisory roles on a eurobond issued by Rosneft raising €3bn (£1.87bn), as the Russian oil group seeks to finance its $55bn buyout of TNK-BP.

Cecil Quillen
Cecil Quillen

The deal, which Rosneft said was its first eurobond issue, is structured in two tranches. Rosneft will issue around $1bn (£620m) in a five-year paper on 6 March 2017 and a further estimated $2bn (£1.24bn) in a ten-year paper on 6 March 2022.

The first tranche has a yield of 3.149 per cent, while the second tranche has a yield of 4.199 per cent.

Freshfields advised Rosneft in its role as issuer, with London corporate partner Donald Guiney, Moscow capital markets and finance head Mikhail Loktionov and London capital markets partner Peter Allen all acting on the deal. US associate Tayler Souter and Yuri Shumilov, a Moscow associate currently on secondment in London, also supported the team from London.

Linklaters, which acted on a $7bn (£4.4bn) Russian eurobond deal earlier this year (5 April 2012), also advised the underwriters on this deal, with an identical line-up featuring London capital markets partner Cecil Quillen and capital markets partners Dmitry Dobatkin and Andrew Burge in Moscow.

The banks consisted of Barclays, Citigroup, JPMorgan and VTB Capital as lead coordinators, and Deutsche Bank, Merrill Lynch, Morgan Stanley and GPB Financial Services as joint bookrunners. The Russian Regional Development Bank also managed the issue.

The order book, valued at around $25bn (£15.5bn), was heavily oversubscribed, with an estimated 1,000 orders placed for the two tranches.

Background to this deal:

Freshfields regularly acts as counsel to Rosneft, having advised the Russian state-owned oil giant on its proposed share swap agreement with BP (17 January 2011) and its subsequent $3.2bn agreement with ExxonMobil (31 August 2011) last year.

Freshfields and Linklaters also acted as co-counsel to Rosneft earlier this year as it signed four new joint ventures to explore oil and gas fields in the Arctic and Pacific Oceans with Norwegian rival Statoil (3 September 2012).

In April this year Linklaters acted for the lead arrangers on a $7bn eurobond by from the Russian Federation, which is thought to be one of the largest eurobond deals to hit the emerging markets since 2000 (5 April 2012).

Linklaters is acting for BP on the $27bn sale of its stake in TNK-BP to Rosneft (22 October 2012).