RLPC-UPDATE 1-BHP jumbo loan margins tighter than for ABInBev

Fri Aug 20, 2010 9:58am EDT

* Loan pays LIB+70-110 bps

* Pricing lower than for 2008 ABInBev loan

(Adds pricing details)

By Alasdair Reilly and Tessa Walsh

LONDON, Aug 20 (Reuters) - BHP Billiton's (BLT.L)(BHP.AX) $45 billion loan backing its hostile bid for Canada's Potash Corp (POT.TO) pays margins of 70-130 basis points (bps) over EURIBOR, according to a U.S. regulatory document filed on Friday.

As expected, the deal is priced inside the margins paid on the last jumbo European acquisition financing for Belgian brewing giant ABInBev (ABI.BR) in 2008 that paid 100-175 bps.

The loan comprises a $25 billion, 364-day bridge loan to bond issue that pays 70 bps; a $10 billion, three-year term loan that pays 110 bps; a $5 billion three-year revolving credit facility that pays 110 bps; and a $5 billion, four-year revolving credit facility that pays 130 bps.

The one-year term loan facility can be extended for a further year.

Commitment fees of 30 percent of the applicable margins are payable on undrawn amounts of the term loans, while commitment fees of 35 percent of the margins on undrawn amounts under the revolving credit facilities are also payable.

Margins on the one-year facility step up by 25 bps every three months from utilisation, and once it is repaid the margins on the other facilities step down by 15 bps.

Additionally, one the term loans and the three-year revolving credit facility is repaid the margin on the four-year revolving credit facility will be reduced by a further 25 bps.

Duration fees of 10-100 bps are also payable depending on how long and how much of the one-year facility is outstanding.

Potash Corp is seeking a buyer willing to top BHP Billiton's $39 billion offer for the world's largest fertiliser firm after shareholders balked at a bid they considered too cheap. [ID:nSGE67J03V]

JUMBO FINANCING

BHP's jumbo financing is the European loan market's biggest deal since ABInBev took a $45 billion loan to finance its acquisition of Anheuser Busch.

The six arranging banks on BHP's deal have approached relationship banks for up to $2.5 billion each in a wider syndication, bankers said on Thursday. [ID:nLDE67I1AJ]

Mandated lead arrangers and bookrunners Banco Santander (SAN.MC), Barclays Capital (BARC.L), BNP Paribas (BNPP.PA), JP Morgan (JPM.N) and Royal Bank of Scotland (RBS.L) equally underwrote $8.4 billion each, while TD Securities (TD.TO) is also acting as mandated lead arranger and bookrunner with a take and hold commitment of $3 billion, bankers said. (Editing by Michael Shields)

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