By Christopher Mangham
Qatar Telecoms approaches banks to refinance forward-start loan agreed last year.
Qatar Telecommunications Co (Qtel) has approached banks to refinance a $2 billion forward-start loan agreed last year in order to reduce its borrowing costs, banking sources close to the deal said. Forward start loans were popular in 2009 for companies facing maturing loans, as they enabled borrowers to extend the deals when liquidity was tight, but they involved a hefty increase in pricing on the existing credit. With margins falling, they are now looking expensive and borrowers are keen to replace them.
German automotive lighting maker Hella Hueck replaced a forward-start loan earlier this month, while banking sources told TRLPC this week that German industrial gases firm Linde has issued a request for proposals over the refinancing of the 1.6 billion euros ($2.2 billion) of forward-start facilities arranged last June.
Banking sources told TRLPC last year that Qtel's $2 billion forward-start loan, signed in September 2009, paid a margin of 250 basis points (bps) over LIBOR. That compared with a margin of 22.5 bps over LIBOR for the original three-year, $2 billion revolving credit facility agreed in November 2006.
Initial mandated lead arrangers and bookrunners on last year's loan were Bank of Tokyo-Misubishi UFJ, Barclays Capital, BNP Paribas, DBS and Royal Bank of Scotland, while Qatar National Bank was initial mandated lead arranger and financial adviser.
Qtel was not immediately reachable for comment. ($1=.7401 Euro) (Reuters)