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BP Pledges Angola, Azerbaijan Oil Sales in $5 Billion of Spill-Fund Loans

BP Plc is pledging oil sales from Angola and Azerbaijan to raise $5 billion of loans as it builds a cleanup fund for the worst U.S. environmental disaster.

The larger of the two loans, for as much as $3 billion, is backed by oil sales from BP’s interest in fields off Angola, lenders said. A second, $2 billion-loan is backed by revenue from crude drilled in BP’s Azeri-Chirag-Deepwater Gunashli field, off the coast of Azerbaijan.

BP, Europe’s second-biggest oil company, has lost 38 percent of its value since its Gulf of Mexico oil well blew up on April 20, spilling about 4.9 million barrels of crude. To pay for the catastrophe, the company already got $12 billion of bank credit lines in the second quarter and is seeking $30 billion from asset sales around the world.

Royal Bank of Scotland Group Plc and Societe Generale SA are arranging the Azerbaijan loan, while BNP Paribas SA and Standard Chartered Plc are coordinating the Angola facility.

Both loans will pay an interest margin of more than 1 percentage point above the benchmark lending rate, according to two people familiar with the matter who declined to be identified. The loans are amortizing and have maturities of five years, the banks said in separate statements.

BP’s London-based spokeswoman Sheila Williams wasn’t immediately able to comment on the loans.

Commitments on both loans are due Sept. 13 and signing is scheduled to take place by the end of next month, the lenders said.

Source: Bloomberg
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