Posco Said to Sign $1.73 Billion of Loans for Krakatau Project
Posco (005490), the world’s third-biggest steelmaker, signed $1.73 billion of loans, including a $1.2 billion, 14-year facility with Export-Import Bank of Korea, according to an official with the credit agency.Proceeds will be used for a joint venture with Indonesia’s PT Krakatau Steel (KRAS), the person said, declining to be identified because details of the deal are private.The $1.73 billion in borrowings includes $529 million from Australia & New Zealand Banking Group Ltd., Bank of Tokyo- Mitsubishi UFJ Ltd., Credit Suisse Group AG, HSBC Holdings Plc, Mizuho Corporate Bank Ltd., Standard Chartered Plc and Sumitomo Mitsui Banking Corp., the person said. The loan also matures in 14 years, the person said. It is guaranteed by Korea Trade Insurance Corp., according to the person.Krakatau Steel is Indonesia’s largest maker of the metal. It formed the joint venture with Posco last year.The $1.2 billion facility from Export-Import Bank of Korea is split into a $700 million tranche and a $500 million portion, with the credit agency guaranteeing the $500 million part, the person said.That $500 million loan, along with the $529 million facility provided by the seven-bank syndicate, both pay a so- called all-in fee, which includes margins and fees, slightly exceeding 300 basis points more than the London interbank offered rate, the person said.