RLPC-Mechel's $1.5 bln loan pays LIBOR+260-290 bps -banker

LONDON, March 28 (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: Quote, Profile, Research) pays a margin of 260-290 basis points (bps) over LIBOR, a banking source said.

The Russian steel and coal firm controlled by billionaire Igor Zyuzin, had announced the $1.5 billion deal on Wednesday, adding that ABN AMRO and Merrill Lynch had agreed to arrange and underwrite the loan.

The banking source said on Friday the margin is 260 bps 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.

ABN AMRO and Merrill Lynch are co-ordinating mandated lead arrangers and bookrunners and they are currently inviting lenders to join as mandated lead arrangers with commitments of $150 million. The all-cash deal will allow Mechel 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 has a market capitalisation of $16.3 billion. (Reporting by Christopher Mangham; Editing by Mike Elliott)