OREANDA-NEWS. OJSC "Magnitogorsk Iron and Steel Works", the largest one-site steel producer in Russia, and a consortium of international banks consisting of ABN AMRO, Deutsche Bank AG, and ING Wholesale Banking, on September 14 signed a loan agreement amounting to EUR365 million. This loan agreement enjoys insurance cover provided by EULER HERMES Kreditversicherungs-AG, Hamburg, acting on behalf and for the account of the Federal Republic of Germany.

This 10-year financing will be utilised to finance supplies and services from SMS Demag AG, Germany, for the construction of a 5,000 mm plate mill and a continuous slab caster. EULER HERMES will provide cover for 85% of these supplies and services.Within the consortium, ABN AMRO acts as a Documentation Agent, Deutsche Bank AG as  EULER HERMES Agent,  ING Wholesale Banking as a Facility Agent. Furthermore, Deutsche Bank Ltd., Moscow assumes the role of the Account Bank.This financing is the largest  covered by EULER HERMES corporate risk for a Russian company since 1998.

Commenting on the signing of the Loan Agreement, Mr Rashnikov, Chairman of OJSC MMK's Board of Directors, said, "This is the largest loan in the history of our Company, extended by international banks. The Magnitogorsk Iron and Steel Works has an extensive and positive history of borrowings. The signing of this Agreement reconfirms MMK's reputation as a reliable borrower and is testimony of the growing trust in our Company on the part of the international financial community.

"Furthermore, this Agreement represents an important milestone in the implementation of OJSC MMK's largest investment project, namely, the construction of the 5,000 mm Plate Mill Complex. This loan will be used to finance supplies and services of SMS Demag as part of the project's implementation, bringing us closer to the moment when the mill will start turning out products so unique for Russia," Mr Rashnikov added.