Hyundai Steel Co. has sent out a request to approximately 15 banks for proposals for a $1.5 billion-equivalent financing, according to market sources.
The funds will be used to expand existing facilities in Dangjin, a county in South Korea's South Chungcheong Province.
The financing has been divided into an export credit agency-backed portion and a commercial loan portion.
The commercial loan portion, at roughly 15%, or US$225 million, of the US$1.5 billion, is a five-year bullet term loan.
The borrower has indicated in the RFP that the ECA portion will have a tenor of 11.5 years.
The ECA portion comprises: a 500 million to 600 million euro tranche insured by Germany's Euler Hermes; a US$150 million to US$200 million tranche insured by China Export & Credit Insurance Corp, better known as Sinosure; a US$100 million to US$150 million tranche insured by Japan Bank for International Cooperation (JBIC) and/or Nippon Export & Investment Insurance (NEXI); and a 100 million to 200 million euro tranche insured by Italian SACE or other European ECAs.
Banks that received the RFP include: BNP Paribas, Calyon Corporate & Investment Bank, Citigroup, ING Bank, SG, Standard Chartered Bank and Sumitomo Mitsui Banking Corp.
The deadline for proposals is October 27, incidentally, the day when a groundbreaking ceremony will be held at the construction site of the project.
The expansion will boost present production of 3.8 million tons of hot rolled products and 1.2 million tons of bar steel products annually.
The total project cost is estimated to be roughly US$5 billion.
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