RLPC-Mechel's $1.5 bln loan set to wrap next week-banker

LONDON, May 7 (Reuters) - Russian Mechel's (MTL.N: Quote, Profile, Research) $1.5 billion, 12-month bridge loan that backs its acquisition of ferro-chrome producer Oriel Resources OLR.L is expected to complete next week via bookrunners ABN AMRO and Merrill Lynch, a banking source said on Wednesday.

Banks were invited to join as mandated lead arrangers with commitments of $150 million each. Those banks are expected to be signed in to the deal next week.

Syndication is oversubscribed and banks' commitments will be scaled back. As a result, there will not be a general syndication, the source added.

The deal pays a margin of 260 basis points (bps) over LIBOR for the first six months, rising to 290 bps thereafter. The intention is for the bridge to be taken out via the IPO of Mechel's mining division.

The all-cash acquisition will allow the Russian steel and coal firm to more than double capacity of ferro-alloys used to make steel and also gives the New York-listed company control of chromite and nickel mines in Kazakhstan which Oriel was preparing to bring on stream.

Mechel, controlled by billionaire Igor Zyuzin, has a market capitalisation of $16.3 billion.

(Reporting by Christopher Mangham)