Qatar Telecommunications Co (Qtel) is signing a group of senior banks into a $2bn loan that will reduce its borrowing costs, banking sources said.
As previously reported, Qtel is refinancing a $2bn forward start loan agreed last September, a growing trend among borrowers keen to replace forward start deals signed last year following a dramatic reduction in pricing for highly rated companies in Europe and, to a lesser extent, the Gulf.
Forward start loans were popular in 2009 for companies facing maturing loans, as they enabled borrowers to extend the deals in return for a hefty increase in pricing on the existing credit. However, in light of falling margins, they are now looking expensive.
The new deal is split between a $1.25 billion, three-year tranche that pays a fully drawn margin of 125 basis points (bps) over LIBOR and a $750 million, five-year tranche that pays a fully drawn margin of 155 bps, the bankers said.
That compares with a margin of 250 bps over LIBOR on last year’s $2 billion forward start loan and 22.5 bps over LIBOR for the original three-year, $2bn revolving credit facility agreed in November 2006.
Initial mandated lead arrangers and bookrunners on the new loan are BNP Paribas, DBS, Qatar National Bank, Societe Generale and Royal Bank of Scotland, the banker added.
General syndication will launch shortly. (Reuters)
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